Online shopping growth

[DavidL]

Heard this on the new this am

http://www.abc.net.au/news/2011-07-...iple-channels-harker/2810010?section=business

In summary PwC forecasts online growth in AU to be 13% pa over the next few years (compared with 7% in US and 9% in UK)

Question is what impact does this growth have for domain names? It's obviously good news (sure most here would not be surprised) but I wonder how general online spending by Australians impacts domain values?

Eg does X% increase in spending equate to Y% increase in CPC (or general online competition/demand) which increases the value of domains by Z%

 

[neddy]

Eg does X% increase in spending equate to Y% increase in CPC (or general online competition/demand) which increases the value of domains by Z%

Good question - but I guess very hard to answer definitively.

Suffice to say, good eCommerce domains should really come into their own value wise.

Here is another link for an article on the same subject:

http://www.startupsmart.com.au/finance/2011-07-25/soaring-online-sales-tipped-to-hit-$13.6bn-in-2011.html?utm_source=StartupSmart&utm_campaign=b1f697f156-Tuesday_26_July_2011&utm_medium=email
.

 

[zhenjie]

All these positive reports certainly has impacted on ecommerce/online retail related domain names in the past few months. Certainly a nice stable area for growth over the next few years/decades

 

[snoopy]

Domain investors know online shopping is growing quite quickly and are probably considering that when bidding. Ditto for endusers, they know it is a growth area and will probably pay accordingly. ie I would think people are "pricing in" growth-paying more because of that.

Regarding the effect on CPC I don't think growth in online shopping will necessarily be positive for CPC. On one side you got more people searching creating a greater supply of ad inventory that can be sold (driving prices down), on the other side you've got more advertisers competing for that traffic (driving prices up). How many people have actually seen CPC growth in the last couple of years?

 

[Chris.C]

How many people have actually seen CPC growth in the last couple of years?

I definitely think there has been CPC growth over the last couple of years as a result of increased demand as more mainstream businesses move online.

From a Google AdWords perspective, I think ranking number #1 for keywords phases is more moderately expenseive than it used to be, but probably more importantly ranking 2 - 5 is SIGNIFICANTLY more expensive than it used to be.

I put this down to the assuption that Max CPC for #1 will alawys be detrimined by the margin and profitablily of a product/industry by the best practices operator, but ranking for position 2 - 5 is getting more competitive as more businesses that are close to best practices enter the market and it's these businesses that are filling up ad invesntories that are driving CPC growth.

How does this effect domains - I think modest changes in CPC rates don't have huge influences on domain prices.

 

[snoopy]

From a Google AdWords perspective, I think ranking number #1 for keywords phases is more moderately expenseive than it used to be, but probably more importantly ranking 2 - 5 is SIGNIFICANTLY more expensive than it used to be.

I put this down to the assuption that Max CPC for #1 will alawys be detrimined by the margin and profitablily of a product/industry by the best practices operator, but ranking for position 2 - 5 is getting more competitive as more businesses that are close to best practices enter the market and it's these businesses that are filling up ad invesntories that are driving CPC growth.

The logic in what you've said about best practices etc sounds right to me. I think though that is very different to CPC that people earn from adsense, ie content network bids.

 

[DavidL]

Domain investors know online shopping is growing quite quickly and are probably considering that when bidding. Ditto for endusers, they know it is a growth area and will probably pay accordingly. ie I would think people are "pricing in" growth-paying more because of that.

Regarding the effect on CPC I don't think growth in online shopping will necessarily be positive for CPC. On one side you got more people searching creating a greater supply of ad inventory that can be sold (driving prices down), on the other side you've got more advertisers competing for that traffic (driving prices up). How many people have actually seen CPC growth in the last couple of years?

If anyone could try and find a negative slant on this, it would be you snoopy. Cheer up mate.

Obviously there are lots of factors in play but in really simple terms

More money spent online is good for anyone with online interests be it website owners, domainers, hosting companies, registrars, software companies etc

 

[Chris.C]

I think though that is very different to CPC that people earn from adsense, ie content network bids.

Well it shouldn't be substantially different, because it's the same principles at work.

That said in my experience the traffic from content network doesn't convert as well for businesses as Google AdWords, and as a result some businesses that advertise on the Google search results don't find it worthwhile continuing that over to the content network, but I have noticed that ad inventories are much better filled these days than in previous years, except that CTRs have trended down of the years as users have become savvier to the fact that Google AdSense ads aren't website links...



I think it's still a case of publisher treading water to keep their head above rather than more advertising dollars flowing to them.

 

[DavidL]

talking of Adsense - just like Joe's letterbox my ads seem to be dominated by Google Adwords $75 vouchers.

This is one of the reasons why I'm converting many of my ad blocks to text only because the $75 voucher image ad seems to pop up everywhere. Of course this might be due to my browsing habits or maybe Google have decided they will put their ads top of everything (which is their right I guess)

 

[snoopy]

Well it shouldn't be substantially different, because it's the same principles at work.

I think Google has been adding in pretty serious quality adjustments which has resulted in the outcome being quite different.

That said in my experience the traffic from content network doesn't convert as well for businesses as Google AdWords, and as a result some businesses that advertise on the Google search results don't find it worthwhile continuing that over to the content network,

I think that is the issue, it is a completely different type of traffic, much lower quality, click fraud, accidental clicks, people who aren't really looking to buy etc

 

[Chris.C]

talking of Adsense - just like Joe's letterbox my ads seem to be dominated by Google Adwords $75 vouchers.

Time to turn image ads off?

I have never tried to filter out the Google Ads - I wonder how they'd feel about that...

I think Google has been adding in pretty serious quality adjustments which has resulted in the outcome being quite different.

Potentially - though I personally haven't seen anything on my sites that would suggest any sort of smartpricing unless it is done account wide (in that I don't normally see a CPC drop in short periods nor have I seen one over time).

I think that is the issue, it is a completely different type of traffic, much lower quality, click fraud, accidental clicks, people who aren't really looking to buy etc

Agreed the traffic is suspect, but businesses in turn just lower their bids for this sort of traffic. So there still should be increasing competition for the ad spots as more advertisers move onto the AdWords PPC platform so the trend should still generally be up for avg CPC even if it's not trending up for max CPC.

 

[snoopy]

Agreed the traffic is suspect, but businesses in turn just lower their bids for this sort of traffic. So there still should be increasing competition for the ad spots as more advertisers move onto the AdWords PPC platform so the trend should still generally be up for avg CPC even if it's not trending up for max CPC.

There should be increasing competition, but on the flip side, growth means far more ad inventory for sale.

 

[snoopy]

Potentially - though I personally haven't seen anything on my sites that would suggest any sort of smartpricing unless it is done account wide (in that I don't normally see a CPC drop in short periods nor have I seen one over time).

Google have had smartpricing for a long time, I don't think there is really any doubt about its application.