$116 Heard Round The World
If your company gets big enough and makes enough money, you can count on a lawsuit. Some suits make sense. If you make money by violating the law, then you could argue that a suit makes sense to insure others do not suffer. Not many people will have sympathy for a company that convinces people that they must buy something that they don’t need, especially when that audience is less than savvy and vulnerable, like senior citizens. Similarly, people have a high degree of tolerance for those injured by a company’s negligence or greed, especially if it means a large group of people will have diminished lifespans. Some suits make debatable sense. The McDonalds coffee lawsuit comes to mind, where a woman received a seven-figure settlement for being burned after spilling her coffee in her lap. Wonder why coffee containers warn you that contents are hot? That’s why. Turns out the coffee was super hot and did some serious damage to an area where people would rather not suffer hospital level burns. Other lawsuits do absolutely nothing, and they make a strong case for adopting the British model where the loser pays the legal costs. These suits suck up time and are too often a knee-jerk reaction to someone not getting what they want and/or expressing a frustration about an unrelated issue, and in the end only the outside lawyers for either side win because they get paid either way. Three examples of this last kind happened in the past two months, each tagging on to the other, and targeting one of the oldest and yet still least understood means of Internet traffic- parked domain names.
The domain space is so vast, so rich with intrigue, that an entire book has already been written. The story of the domain space – the early risk takers, the mysterious kings of domain registration, and the tales of wealth – read more like an action adventure movie than an evolution of an industry and make the stories behind some of the early dot com success seem mundane, even if they often involved much grander sums. The domain space captures the imagination because it truly contains the stuff of legend, the first pajama millionaires, savvy every-day people who make money while sleeping, while eating, whether they turn on the computer or not. The way they make money has evolved and continues to evolve, but the growth of the domain space was intricately tied to the growth of Internet advertising. It is the monetization component of the domain space, and ads don’t just make the owners money while they decide whether to develop or sell; they also act as a key proxy for determining the value of a name. How do you know what DVDRentals.com should go for? You could guess, or you could treat it like any business and pay a multiple of value, in this case revenue off of parked domains. The problem with the domain space is that it’s the domain space; it grew from the shadows with no fanfare, incredible secrecy, and no outward explanation of the skill involved with those early pioneers. Instead, what it has is envy; people jealous of those who got in early and who as a result look at the overall business in a skewed and negative light.
It should come as no surprise then when a lawsuit regarding the space, and you would think the lawsuit probably involves someone owning a domain that infringes on the mark of another. What you probably wouldn’t expect is for an advertiser to sue, with the suit having nothing to do with the domain space other than his ad appeared on domain traffic and didn’t get the performance he wanted. Hal K. Levitte, an attorney no less, claims that his Levitte International displayed 202,508 impressions on parked domain traffic, received 668 clicks, but no conversions. He spent $136.11. I went to LevitteInternational.com. I wouldn’t expect a conversion with a thousand dollars. Perhaps that’s not fair, but to sue Google and indirectly the entire domain channel because he didn’t get results is simply moronic. Levitte spent a little north of $800 total; yet, in trying to find how well the campaign did elsewhere I couldn’t. It’s a classic blame the other person tactic. I didn’t understand it; I didn’t get what I want; therefore, it’s them not me. And, as a result, I’ll generalize by saying in a claim, "Given the low quality of these parked domain and error pages, advertisers would not want to spend their advertising budgets on these distribution networks. However, Google designed its network in such a way that it was virtually impossible to opt out of the AdSense for Domains and/or AdSense for Errors programs." Whether good or bad, it’s the nature of syndication. Advertisers can’t opt-out of AOL. Or, perhaps sue Google because you bid on the word myspace, ended up on some wallpaper site, spent $1000 in three hours with no conversions. The amount of loss from trial and error in this audience alone ranks in the seven figures easily. Yet, no one here is suing. They change and adapt.
If those in our space have lost money, and we rank among the most savvy; how many others do you think have lost many? Google wouldn’t make what they make if it didn’t involve a learning curve for advertisers. No surprise then that two others also sued, the latest being JIT Packaging, a container company. All saying the same thing – quality wasn’t there. Again, what they don’t say is that the quality wasn’t there for me. Had I the money and stomach, I’d counter sue, claiming the lawsuits frivolous and that they would damage my business, because I did well on domain traffic. I don’t advertise on Google, but when I did, the domain traffic converted very well. Naturally, it’s not going to work well for every advertiser. It can’t. There is a statistical sampling issue. Thinking of Levitte, at $116, you can’t possibly determine the quality of an entire industry. And, there are enough other factors at play, that will result in a loss for Levitte, but the real loser is the domain channel. Instead of his suit making Google change, his suit will solve no problems, only create them, and that’s the real shame. Truth is, for a wide variety of performance-based ads, the domain channel absolutely crushes it, but even if it earned Google one billion annually, at 5% of their revenue, it generates more than 5% of a headache. So, the Google state will do what they do to any uprising. They will crush it. The domain space is far from perfect. Every industry is far from perfect. Their biggest failure as an industry though is something from which we can all learn – come together early, and market the hell of yourselves so others understand what you want them to instead of forming incorrect opinions. Do you want to see $116 destroy affiliate marketing?
