Data-Driven Domain Investing: Mastering Advanced Metrics
Domain investing isn’t new. But many investors, especially newbies, rely on guesses and hunches to make decisions. As an experienced investor would tell you, that is not the right way. Instead, you should base your decisions on data and logic.
Data-driven decisions may sound like something reserved for those with deep pockets. But that’s not true. In fact, you can use freely available data and inexpensive tools to get the data you need. In this article, we will explain how to make data-driven domain investing decisions.
6 Metrics to Look at to Take Domain Investing Decisions
You don’t need to scour through spreadsheets and tools to make data-informed decisions. There are only 6 metrics to look at. These are:
Google Trends and Search Volume
The world is continually changing, with new things, terms, and concepts coming up every day. And some of them catch on and become the next big thing. You can predict this new big thing to some degree with Google Trends. This free tool reveals the keywords people are interested in in a given period. You can analyze by region, time, and language. Domain names that are the same or similar to the trendy keywords are likely to be a good investment.
Along with trends, you should look at the search volume. Search volume also indicates how many people are interested in a particular keyword. Like trendy keywords, these high-volume keywords as domain names are a good investment opportunity.
You can use tools like SEMRush, UberSuggest, or Keywords Everywhere to check the search volume.
CPC, or cost-per-click metric, gives you an idea of the commercial intent of a domain name. If there are ads targeting that domain, it’s a good indication that there’s commercial intent. And people will be willing to spend more on such domains.
You can uncover CPC metrics using paid tools like SEMRush or free tools like Google Ads Manager. Simply log in to Ads Manager using a Gmail account, type in the keyword, and it’ll show you the latest numbers. The higher the CPC price, the more valuable the domain name.
You should also look at historical CPC data. Are the advertisers targeting the domain name (or similar names) for long, like over a year? Or is it a one-time instance? Ads running for longer duration are always desirable.
Comparable Domain Sales
Comparable domain requires you to look at generic, low-value, and brandable, high-value domains. Consider domains that have expired and are placed for sale. Then, consider the domains that are bought from domain brokerages and are being sold at a higher price. Your job is to find a middle ground and buy domains along those lines. Aim to be closer to premium domain names.
If the domain was used previously, it may carry more value than a brand-new domain. So check the domain history of a domain. You can use tools like Ahrefs to dig the history. Look at domain age, SEO, web content, backlinks, social media profiles, etc. If you feel confident, you can purchase that domain and improve the metrics.
Bids and Proposals
After expiring, domains are placed on auction for sale. You can visit the domain marketplaces and see the number of bids or proposals the domain has received. There are also website marketplaces where websites are sold and bought. Some websites get disproportionate bids, indicating they are in high demand. You can capture similar domain names or domains in the same niche.
This is not necessarily a metric, but the universality of a domain does affect its value. Domains that have a global reach are bought for higher prices. So look if the domain name has universal reach potential and invest if you feel confident in it.
Aggregating all six (or five, six being an objective judgement) will help you make better data-driven decisions when it comes to domain investing.