DomainMart Introduces B/T Ratio to Determine Domain Names’ Best Use

The model uses the fact that the value of a commercial site’s domain name is driven by two, not necessarily mutually exclusive, functionality forces: branding and traffic values. Stechniques are used to combine information on observable proxies.

Berkeley, CA (PRWEB) March 17, 2006 -- DomainMart, a leading provider of quantitative and analytical domain-name services, introduced today the brand-to-traffic (B/T) ratio, a valuable analytical tool to determine the best use of a domain name, judge its traffic quality, and select portfolios.

The model uses the fact that the value of a commercial site’s domain name is driven by two, not necessarily mutually exclusive, functionality forces: branding and traffic values. As these drivers are unobservable, to impute their respective values DomainMart uses statistical techniques to combine information on observable proxies. They also distinguish between traffic suitable for parking verses forwarding/leasing.

The measure is a response to customer reaction. “They are bewildered as to what a domain name appraisal means,” says Tajirian, DomainMart CEO. He notes that an appraisal report based on valuation of comparable domain names sold does not provide any intuitive feel of the value. “This is primarily driven by the fact that there are no theoretical models to describe the value drivers for such appraisals. Thus, the companies providing appraisal services have each adopted their own list of descriptors such as ‘branding and advertising,’ ‘linguistic,’ and ‘length,’” add Tajirian.

Tajirian points out that “what was missing is an approach that is based on a meaningful, measurable, and parsimonious way to capture these effects and a measure of each driver’s contribution to appraised value.”

“Without a statistical model, appraisers can only provide ad hoc measures for each driver and then aggregate them into the appraised value in some mysterious proprietary, procedure,” notes Tajirian.

As for using the ratio in determining traffic quality, “a domain name with high traffic, a low B/T, and a low PPC rate suggests that it is best suitable for forwarding/leasing,” says Tajirian.

“Two equally valued domain names can have two different uses. Thus, for example, if you have a budget of $2000 and you are interested in parking revenue, you should seek a domain names with low B/T ratios and high PPC rates. “Thus, high PPC rates is a necessary, but not a sufficient condition,” notes Tajirian.

About DomainMart

DomainMart is an industry leader in providing domain-name secondary-market products and consulting services, including appraisal, leasing, escrow, parking, private investment management accounts, protection, valuation, and traffic monetization management since 1996.

For more information, please visit http://www.domainmart.com/news/Making_Sense_of_Domain_Name_Appraisals.pdf or contact:

Tom Saitori, Marketing Specialist

DomainMart

Tel: +1 415 905 4234

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