On the Lowell.com Blog, I discuss how I am using affiliate websites to generate passive incremental revenue for Lowell.com. I am using affiliates for hotels, tickets, and jobs, although there were other verticals I chose not to use for various reasons. With the three affiliate companies, I am able to create customizable pages within my site, and then the traffic is forwarded to the affiliate sites to close the sale. I can basically set the sites up and almost forget about them (except for minor updates).
By using affiliates, I am able to create brand stickiness at Lowell.com, as visitors will presumably find what they are looking for, and they will return to find it again. The transition to the affiliate site for the purchase is fairly seamless, and since the site has the look and feel of Lowell.com, it will make visitors more confident tha they aren’t being taken to a shady website.
One of the most important things to remember is to choose trustworthy partners. By working with well known and respected brands, I am confident they will give visitors a good experience, helping to promote the Lowell.com brand. The affiliates need to have great customer services, be reliable and give exactly what they promise their customers.
On the Lowell.com blog, I discuss which affiliate companies I chose and why. Hope this helps you in your development projects.
Lowell.com Project: Affiliate Sites
Lowell Project: Finding Website Advertisers
Finding advertisers will probably be the most difficult task for me once Lowell.com is softly launched sometime next week. It is difficult to convince someone to spend money advertising with an unproven business, especially considering the current economic situation. As bad as it is around the country, Lowell, Massachusetts has a fairly high unemployment rate and business is suffering in the city. However, because of rejuvenation efforts taken on by the city, there are some positive signs, and I want to do what I can to improve the economy and drive tourism (as much as a website can).
Because I changed my revenue generation strategy for Lowell.com from the directory model to a guide model, there is going to be a greater emphasis on acquiring individual business clients to advertise. On the Lowell.com blog, I discuss my strategy for acquiring advertisers. I am planning to get in touch with businesses in several less invasive ways. Based on my experience working in my father’s retail store, I am going to avoid the most common (and easiest) way to communicate with a business.
If you have time today, check out the Lowell.com blog for more information about my strategy to acquire customers.
Lowell Project: SEO Analysis
The Lowell.com site is currently going through a thorough search engine optimization analysis. I wanted to catch all the low hanging fruit before I officially launch the site, and everything hould still be on target for a launch in a couple of weeks. I blogged about the SEO analysis on the Lowell.com blog, although I didn’t really get into too many details on the topic. I am far from an expert, and it would only be humorous for me to write or preach like I was one.
I do think that search engine optimization is almost as important as the unique content I had written. I used the example of my website being like a home in the forest that needs a road and electricity. It could be the most beautiful home in the world, but if you can’t get to it, the home won’t be enjoyed by others. Search engines need a way to find Lowell.com (and other websites), and optimizing it for the search engines is the best way to get noticed.
If you have some time and interest in developing, feel free to check out the Lowell.com development blog for more details. I also added a few resources I used in addition to my friend.
Lowell Project: Technical Setback
I ran into a technical problem with the Lowell.com website hat has caused a minor setback and will hopefully cause just a short delay. Throughout the development and review process, I have always viewed the site on my Macbook using Firefox, Safari, and the most updated Internet Explorer browser. The few people that have also reviewed the site have used similar browsers and computers as well. Unfortunately, after asking a friend to review the site, we determined it not only looked distorted using Internet Explorer 6, but it was unusable. Additionally, the site looked distorted at 800 pixels.
My developer is working on a fix for this as we speak, but it is causing a delay at the moment. While this is something that I will catch well in advance the next time, it wasn’t something I spent much time considering. We all make assumption when doing things, but you know what they say about people who assume things!
You can read more about this minor setback as well as the progress of the Lowell.com website on the Lowell.com blog. I am still hoping to launch it in a couple of weeks. Please keep in mind that the site is being built offline, so the current Lowell.com website looks nothing like how the new website will look.
Lowell Update: Change in Execution Strategy
I apologize for not updating the Lowell.com development blog in a while. For the last few weeks, I have been busily trying to finish, revise and edit the Lowell.com website, and I think we are getting very close to launch now. Basically all of the pages are done and set, but it’s just a matter of going through to make sure there aren’t typos, ensuring that all of the links work and take people to the proper places, and just cleaning everything up. There will be many tweaks made after launch, but I want a presentable website launched before I begin soliciting advertisers.
Since the last update, I made a major change in the execution strategy of Lowell.com. Previously, I intended to use phpMyDirectory to allow me to include a full directory site that would be easy for businesses to update and enhance their listings. After spending quite a bit of time thinking about this – and even starting the work on this, I decided to change course and not use a full directory. There were several reasons for this decision, and I expounded on them on the Lowell.com blog.
I plan to write a couple more updates in the next few days, and hopefully the Lowell.com beta site will be launched by the end of March or first week in April! We are only a couple of weeks behind, but I think that’s pretty good!
Domain Name Valuation Based on Revenue Multiples
Industry professionals occasionally debate about whether buying based on a pay per click revenue multiple is smart, and on what revenue multiple is appropriate to make a purchase. Naysayers (like myself) will argue that there is much more to a domain name than PPC, so simply using a revenue multiple is short sighted. Many who use revenue multiples argue that it’s one of the easiest and best ways to value a domain name, and it is especially important when buying a group of names or a portfolio.
While I don’t believe names should be bought or sold simply on a PPC revenue multiple, I do believe domain names should be bought based on some sort of revenue multiple. In any major business, marketing spend is typically allocated based on the return that is expected from the investment. Most of the time, the company will use a model to project a return based on expected response, lifetime value, depreciation, attrition…etc, etc. They will input the variables they know from past experience and make an educated guess on variables they don’t know. This gives an annual rate of return and can help place a value on an investment.
Using similar calculations based on my past experience, I come up with a value for a domain name before buying or selling it. I like to use 3-5 years as the amount of time to earn back the initial domain investment, but it varies depending on the domain name and my plans for it. With geographic domain names, I can determine approximately how much revenue I will be able to generate based on advertising sales, and I can justify a purchase price based on that. Had I used PPC multiples, I probably wouldn’t have been able to justify my purchase price.
When doing a calculation such as this, keep in mind the cost to develop and maintain the website, the cost of data and data entry, and the time it will take you to make the sales or the cost of paying someone to make the sales. Just because a domain name can make $100,000 per year as a website doesn’t mean the name is worth $300-500k based on my thinking. Since the cost of building and maintaining a website can be high, and the time considerations can be great, it is important to keep these figures in mind. While this isn’t perfect, it can help determine the value of a domain name to make an offer or a sale.