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07|09|2007 11:33 pm EDT

Affiliate Summit Auction Fails to Convert

by Affiliate Guy in Categories: Affiliate Programs, Editorial, Events

* Affiliate Guy has a wealth of experience in the online space as an affiliate manager, marketing guru, paid search guru, domain owner, internet enterepreneur, etc. He chooses to remain anonymous.

emptyMoniker’s Affiliate Summit domain auction didn’t set any new sales records. Not by a long shot. In fact, Moniker may have set the record for the sleepiest live domain auction ever. I just finished listening to the live auction broadcast on Webmaster Radio and it quickly became apparent that the auction was doomed from the start.

So what happened? Why didn’t the multi-million dollar trend of the previous live domain auctions continue at the Affiliate Summit? After all, Monte does a good job with his auctions in my opinion. I’ve personally sold a couple of domains at previous auctions for 5 figures. The list of domains seemed decent enough at this auction. The auctioneer is even corny enough to induce a chuckle or two from the audience once in a while during the auction and having a relaxed crowd certainly doesn’t hurt at an auction. I wasn’t there, but as far as I know the temperature in the room wasn’t too hot or cold. So exactly what happened?

1 word: Demographics
Having been an affiliate manager, as well as a domainer for a number of years, I predicted that sales at the Affiliate Summit live domain auction would be flat well before the auction called the first domain because of the people in attendance. At Moniker’s previous domain conference auctions, the rooms were filled with domainers for the most part. These are people that buy and sell domain names for a living and they have the financial resources, insight and foresight to put their money on the table to add a good domain name to their portfolios. Domainers put domains first. They use the domains themselves to generate revenue. Often times they don’t have anything else but the domain name to generate revenue, no real content, no customer support, no inventory to warehouse, just a domain that generates traffic.

Unfortunately for Monte and the domain sellers (some were sellers, most had their domains passed on) the Affiliate Summit doesn’t attract domainers, it attracts affiliates and affiliate managers. Unlike domainers, affiliate’s don’t put domains first. In fact, as an affiliate manager, I can tell you that some affiliates have the worst domain names on the planet in comparison to domainers. Why? Well, there are a lot of different reasons I’m sure:

  1. Lack of financial resources to buy a good, memorable, high quality generic domain.
  2. They just don’t care what domain name they use (also see #1).
  3. Lack of understanding of the value a good domain name can deliver.
  4. They refuse to pay a large sum of money for a category killer domain based on principal (also see #1).
  5. They have a desire to build affiliate sites from scratch or organically (also see #1).

I’m sure that most affiliates would justify their lack of concern for domain names with at least one of the reasons listed above.

So that explains why affiliate’s weren’t falling over each other to bid on Moniker’s domains. What about the affiliate managers that I mentioned that make up the other half of the Affiliate Summit? Why didn’t they buy everything up?

We’ll first and foremost, most affiliate managers work for somebody. They’re at the Affiliate Summit representing the company that they work for. They’re there to meet affiliates in hopes that they’ll join their company’s affiliate program or to hook up with existing affiliates to strengthen the relationship they’ve already established. They’re there because the events are held in cool places like Vegas and Miami baby! Ok, so it’s a working vacation. ;o) Whatever the reason the affiliate manager is at the Affiliate Summit for, they’re not domainers, they’re not necessarily entrepreneurs and they’re not there to buy domain names.

So, you hold an auction in a room full of people who either don’t know, don’t care, don’t have the money or are there to party (cough – meet affiliates) and you very quickly find out that live domain auctions don’t work everywhere – not in grocery stores – not in empty parking lots – not at hospitals and not at the Affiliate Summit. Much like domain names, you really do get what you pay for.

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8 Comments

CJ

July 10, 2007 @ 2:36 am EDT

I was debating putting some of my domains from my portfolio through this auction and I’m glad I didn’t. I think I’ll work on creating some real content instead and focus on selling later.

Boris Yeltsin's Zombie

July 10, 2007 @ 7:33 am EDT

You’re overgeneralizing. I know plenty of affiliates that highly prize keyword-laden domains.

I just think a lot of affiliates are cheap. And/or don’t have enough spare cash to lay down for some of these high price domains. A lot of affiliates are working out of their garage etc.

Once some bigger affiliate groups and companies start to make serious benjamins, then expect them to start picking up these domains.

I already know of affiliates spending huge $$$ on domains and making the payback very quickly.

Leonard Holmes

July 10, 2007 @ 8:51 am EDT

Great article. I was one of the few domainers at the auction and picked up a bargain in the process. I think you hit the nail on the head – this was not the venue or the audience to draw the deep pocket domain investors or CEOs needed for an auction like this.

I doubt we’ll see Monte and his crew at another Affiliate Summit in the near future.

[…] a good analysis of the reasons for the low bidding over at Domain Name News. “Affiliate Guy” concludes […]

Steve Morsa

July 10, 2007 @ 11:30 am EDT

Thanks for the article and insight, Affiliate Guy.

Another thought/question for anyone: While AG’s explanation/s make sense in explaining the poor physical attendence by active, involved, “fully-funded” domain buyers, what explains the lack of such buyers via phone/proxy?

Carillo Francois

July 10, 2007 @ 12:04 pm EDT

I did not se the list but it’s srrongly possible that most of the generic domains for sale were:
– overpriced
– of low search popularity
Affiliates/merchants are not investors, they work in a monthly basis at worst yearly basis but no more.
They want fast return of investment.
When a domain is priced +10 years his search type in revenue like that’s the case today for almost all the auction sales then it’s not an apealing deal for a marketer.
Also, was the domains for sale of interest for this audience?
I am not sure as all the commercial generic names having a high search popularity (the ones of interest) has already been purchased for +90% by domain investors and are not for sale.

AffiliateGuy

July 10, 2007 @ 6:55 pm EDT

Leonard Holmes – Thanks.

Boris Yeltsin’s Zombie – I don’t think I over generalized affiliates at all. In fact, you say in the second line of your comment that you “just think a lot of affiliates are cheap”. That my friend is over generalizing. I gave 5 reasons why I thought affiliates weren’t buying.

Steve Morsa – Not being able to bid on the fly without being preregistered didn’t help. I was tempted to bid on a couple of names last minute, but I wasn’t registered to bid. :(

[…] Affiliate Summit Auction Fails to Convert […]

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