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10|10|2012 06:27 pm EDT

Keep Playing the Music . . . Really, The Ship’s Not Sinking, Part 2

by Adam Strong in Categories: Domain Auction

Over 4 years ago, I wrote a post about the results of the 2008 TRAFFIC auction. That auction did over $4.3 million in sales.  Can you imagine ?  Back then the entire industry was looking for a barometer of the state of the business during a tough time, and the results were considered dismal with a total sale volume of ONLY $4.3 million.  Times sure have changed!

If TRAFFIC auctions were a barometer of the market conditions, what are they today ?  I think they may have sold under $150,000 in names.  Rick just posted on his blog “The market is a snapshot of things and the picture it took was not very good. While many attendees are doing well, the average domainer is not.”

We don’t have the official results from TRAFFIC yet but a lot of domains didn’t sell and a those that sold didn’t fetch big prices. That’s the snapshot.  The results DNN posted live were terrible, but I think they can be expected based on the names. Rick promised this to be a list of domains that would put a buyer in the top of the pack of all domainers.  There were some good ones (I even bought one) but I’m not sure the list could completely deliver on that promise.  Rick just said “I can only choose domains that folks want to sell and look at it through the eyes of a domainer.”   I know that’s a hard task. I’ve done it before and everyone is a “keyboard critic”.  You do have to work with what’s been submitted and sometimes you go with what you have been handed.  I don’t think that price to quality ratio were at a level that domain/investors would bite right now (more on that later).

Andrew Alleman wrote in his piece that this TRAFFIC auction was the most exciting in years.  I wasn’t at the auction so I can’t comment on the buzz or on how exciting the room was, but I think even though Andrew is taking a beating about his post, the buzz and excitement is a good sign.  It shows what I believe to be true too, it’s a buyer’s market and there really are buyers wanting to put money in to domains still.  Rick even mentions the names of buyers who did buy at this auction. They’re domainer/investors.  Guys whose names you know from other blog posts : Mike Berkens, Sean Sullivan, Morgan Linton, Darren Cleveland, Gregg, McNair, Russ Goodwin, Bill Sweetman, Brain Benko (who bid/bought on my behalf).

Raymond over at Hybrid Domainer asked if the time for live auctions had passed.  I commented in length about my experience and thoughts on auctions over there,  but to summarize, I believe live auction events need to be aggressive and open.  They need to do aggressive marketing and be aggressive about getting great names at great prices.  This is nothing new really though, but the domainer/investor buyers are much more savvy and much more choosy today.  They’ve got a lot of inventory that they can choose from just buying a name over at DomainNameSales.com or finding on a drop list.

A live auction should be open and never turn away a bidder and provide a technology that allows bidding online.  The phone bidding at TRAFFIC required prior registration which I didn’t know about so I called a friend.  I know first-hand how tough the technology side is to pull off.  I helped put together an auction on a shoe-string budget from a Vegas hotel room (not a conference room) and we did $150,000 on our first attempt.  It wasn’t easy.  I’ve also been involved in several auctions that melted down because of technology limitations at the hotel.  It can be done though and it has been done.  Let’s not bother if we’re not doing it live and online though.  As DomainShane said “It baffles me that in 2012 we still have this limitation”.

Every day domainer/investors spend thousands of dollars at NameJet and SnapNames auctions bidding live online from the comfort of their homes, so there are buyers still out there.  They don’t even need audio/video on those systems . It’s something we’ve all come to expect at the live events but it’s not necessary.  Being in a room with a bunch of domainer/investors doesn’t do anything but allow you to show-off your bidding really.

As for the “end-user”, it’s my opinion that they generally don’t care about live auctions.  I’ve marketed domains from our auction to this sort of buyer.  Unless the deal is out of this world and they must have the name, they’ll buy your domain when they’re ready.  We’ve seen end-user buyers bidding at live auction events and they’ve bought some big dogs. We have to hand it to the remarkable marketing of these live auction companies that pull in these bidders.  That’s not an easy task. I’d venture to guess they put a lot of effort in to getting those names and those buyers all lined up months ahead of the event.

The “Titanic” of live domain auctions may have sunk (again?), and as Rick said, there’ll be people dancing on the grave.  I don’t think the grave is the domain aftermarket though.   The good news for domain investors is that there are still buyers out there.  I can attest to this, I had one of the best quarters ever this year selling, and I’m still buying as well.  I made more on sales this year than ever and I’m not really a seller.  Buyers are picky though, especially domainer/investor buyers.  They’re looking for good domains, cheap.  They know everyone is selling and the buyer pool has become smarter and savvier.  If you want to continue to sell names at live auctions targeted at domainer/investors, give ’em  what they want.

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11 Comments

Leonard Britt

October 10, 2012 @ 7:10 pm EDT

History has shown time and time again that if you want to sell your domain for a good price, you don’t offer it for sale to a group of domainers.

Doug

October 10, 2012 @ 7:37 pm EDT

“The market is a snapshot of things and the picture it took was not very good. While many attendees are doing well, the average domainer is not.”

Camera is broken.

adamstrong

October 10, 2012 @ 9:21 pm EDT

I don’t think I have or anyone has ever argued otherwise. Auctions targeted at domainers/investors have their place in an aftermarket as do the market-makers (domainers). There are entire businesses built on the money that changes hands between domainers (namejet,snapnames to name two). Don’t discount that a live auction targeted to domainer/investors can’t work because it does every day. Sure you won’t get top dollar, that’s a given since these buyers are the wholesale side, but it’s perfect for moving names and keeping names sold and flowing. Just ask namejet.

JS

October 10, 2012 @ 9:32 pm EDT

Guys, do you think that themed auctions could be a way out of the funk. Say you do a show in SF, with an auction showcasing ads, mobile, social, tech, etc.. related domains, but also short brandable domains and anything really that could appeal the Silicon Valley guys. That could give time to the organizers to spread the word and get end users to show up.

Troy

October 11, 2012 @ 12:18 am EDT

If I were to make a guess I would say that the “dancing on the grave” is MUCH more a result of Rick’s method of marketing and just being Rick than it is a result of TRAFFIC overall. If Howard ran the promotion side of Traffic from his blog, instead of Rick from his, then I think the overall feeling about the conference would be much more mellow. More like the way people perceive the other domain conferences.

Rick has a way of looking at the people of the domain industry as being “with him or against him” and as a result people tend to actually take sides. Look at the comments on his blog for crying out loud, it’s either people praising Rick or people condemning Rick. Look at the comments section of Berkin’s blog however and you see people discussing the post and for the most part ignoring the poster. This is true with most domain bloggers. The exceptions tend to be the more emotionally boisterous bloggers such as Rick and Frager.

From what I have read on his blog Rick is a “no-nonsense” sort of person. He knows what is right, he knows what is wrong and anyone that sees otherwise can go to hell. As a result of this outlook on life Rick also promotes TRAFFIC the same way, it will change your life, it will be the absolute best domain conference EVER, all the beautiful people will be there, the price is an investment and if you cant go or don’t want to go then you are part of the 80% of the domain industry that shits on the success of others.

I think this sort of mentality, that if you don’t appreciate TRAFFIC like Rick does then you are not part of the “good ol boys club”, has really hurt it’s reputation. I don’t see TRAFFIC as a conference anymore as much as a yearly opportunity for Rick to tell people either they are smart or they are dumb.

Rick drew the line in the sand. People are simply choosing sides now. You can either stand on the side that says TRAFFIC is unmissable for all the smart people or you can stand on the side that says TRAFFIC is completely over hyped by a handful of old men.

Only Rick can erase that line in the sand. As long as you promote a $2000 TRAFFIC entrance ticket as a way of becoming a member of a club then people that aren’t in the club are going to make fun of him. Once traffic is seen as a conference again, instead of Rick’s viewpoint on the world in the form of a conference then things can start getting better… as far as domainers getting along with each other goes.

When will domain values go back up? That’s a whole new question.

adamstrong

October 11, 2012 @ 12:47 am EDT

Everything old is new again. :) There’ve been a few “thematic” shows tied to auctions. Geo domains and affiliate summit to name a few. Here’s a take from an affiliate manager at one of those shows : http://www.domainnamenews.com/editorial/like-pulling-teeth-first-affiliate-summit-live-domain-auction/206 Those “end user” types of buyers typically are only buying when the time is right. It would take a lot of effort to appeal to the SV type imho. They’ve had the opportunity to buy the same names we’ve all had the opportunity to buy. I’m not sure why a live auction would be appealing unless there was some fire to that sale :)

Auction Aficionado

October 11, 2012 @ 9:21 am EDT

@ Adam – Good & thorough analysis of this auction along with the whole domain auction landscape tying in both the current & historical …..
——
Not having Online Bidding “again” was a big drawback, disadvantage as well as quite a disappointment here … especially for assets that are clearly internet/online centric … Both lots sold and total sales volume would highly likely have been greater if online bidding was implemented… yes it can be a bit challenging with certain hotel connections & it takes some effort to get the system tweaked right to be effective but again as Adam points out– it can be done and has been done…. If infact that the hotel has insufficient connections, then perhaps ensure that a hotel has proper cabability to enable such “before” it is chosen as a venue for such event… or improvise & muster up some other tech solutions
If you are a leading show or conference venue in this “domain industry” or “online asset arena” …online bidding is essentially a “Must” from just about every perpective… and yes Quality of domains and more proactive, widespread marketing obviously enhances things … I feel that it is good to convey and or reiterate this stuff Not to bash the show,, but try & help affirm & cement the basics of what can and needs to be done to make such “events” more effective, successful and further reaching,, which can largely benift the whole “domain industry” as well as the particular show/conference

DTM

October 12, 2012 @ 2:45 pm EDT

I have a strong list of buyers around me that have lost interest in these live auctions mainly because the quality of domain names are horrible. If I am building a bunch of projects in a certain industry odds are unless a particular name catches my eye I won’t have an interest in paying premium plus dollars for it. The more quality names they have the more likely I will notice one of them that will drag me to the show. If I decide to go to the show I will drag some of my other builder friends to come with me.

DTM

October 12, 2012 @ 2:47 pm EDT

What would people say are the top 20 names listed at this show? I’ll give you my comments on what names on that list would even catch a builders eye.

areyoukidding

October 25, 2012 @ 3:00 pm EDT

” the buyer pool has become smarter and savvier.” ?? Offering $75 for a $5000 domain name is not smarter or more savvy, its arrogant.

areyoukidding

October 25, 2012 @ 3:02 pm EDT

Is this the same Rick that cant spell for his life? The one with horrendous grammar? Makes sense if it is……

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