Direct Navigation FAQs

What is Direct Navigation?
Internet users often perform organic searches using their web browsers’ address bar to navigate to a particular search directly, bypassing conventional online search engines. These users typically fall into two categories that we call generic type-ins, and bookmarkers. A type-in is a user who types in a generic, descriptive domain name that often corresponds to the type of product or service she is looking for (e.g. lowfares.com when searching for airline fares) directly into the browser’s navigation field – the address bar. A bookmarker represents a form of return traffic – users who employ bookmarks and favorites to go directly to specific web destination. Direct navigation is the process by which these users find and interact with landing pages.

What is Domain Monetization?
Domain monetization is an advertising practice used primarily by domain name registrants to monetize type-in traffic visiting their under-developed domain names. The revenue is generated through a process called domain parking, in which major domain monetization companies like DomainSponsor ™ create unique landing pages for each domain name, The landing pages are populated with targeted keywords, ads, and relevant content for the direct navigation user.

In the DomainSponsor program, as with most domain monetization models, the publisher earns revenue on traffic and searches from their domain and shares a percentage of the revenue with DomainSponsor.

The domain industry – currently a $2 billion market – is full of opportunities for advertiser and publisher alike – to buy, sell, monetize, and advertise through domain names. Monetization of domain names occurs in many ways, the most popular of which are pay-per-click (PPC) advertising, leasing, and sales. According to VeriSign, at least 128 million domain names were registered worldwide at the end of the first quarter of 2007, an impressive 31% increase over the previous year. With such fastpaced growth, experts believe the market value of the domain industry could reach $4 billion by 2010, as we continue to see approximately 90,000 names registered every day.

Why Park Domains?
Combine motivated users with targeted ads, and you have a highly successful advertising medium.

Direct navigation traffic is considered to be the purest form of internet traffic because it is 100% user intent-driven and has numerous benefits for both the advertisers and registrants. It is also the highest-converting web traffic for the same reason, growing at a 35%+ compounded annual growth rate (CAGR) between 2002-2006, according to the Internet Commerce Association (ICA).

Studies by WebSideStory (now Visual Sciences) and others show that more than two-thirds of the world’s 1+ billion Internet users arrive at web sites via direct navigation, compared with just 14% from search engines. It is also estimated that users who bypass conventional search engines convert up to 70% better than users who click on banner ads, and up to 50% better than users who click the PPC¹ ads on search engine results pages.

A 2007 case study by Efficient Frontier revealed that their conversion rates with ads on parked domains were double their conversion rates on search. Their parked sites converted at a rate of over 5%, while their search and content conversions rates were around half that.

VeriSign estimates that 12%-14% of new .com and .net registrations in the past 2 ½ years were PPC-intent domains (those registered with the intent of parking)

¹ PPC, or pay per click advertising, is an advertising structure that bases payment solely on qualifying click-throughs to the destination site based on a pre-arranged per-click rate.

Direct Navigation in Practice

A direct navigation user is looking for a new career. She types into the navigation address bar a domain name that is semantically and behaviorally relevant to her search query, e.g. careerseeker.com

The user lands on a parked domain populated by job-related information. She then selects the “job listings” category and sees sponsored advertising links from Monster, CareerBuilder, HotJobs, and other employment services providers.

The user clicks on one of the ads and navigates directly to the advertiser’s website. According to VeriSign, users locate a site for the first time using direct navigation between 51-59% of the time.

A Valuable Advertising Medium
As the last scaled source of “primary traffic” where Internet users initiate and control their online experience, direct navigation benefits both the consumer and the advertiser. The user is able to find relevant products or services quickly, while the advertiser gains access to a highly-targeted audience that continues to visit the site even after the initial search is complete. As more and more viewers, listeners and readers migrate online every day, growing streams of advertising dollars are flowing away from traditional channels to the Internet. Advertisers are learning new ways to build brands, increase sales, generate revenue, and attract a consistent, repetitive flow of traffic to their websites.

Leading marketing research firms unilaterally predict that the internet’s influence will remain dominant in users’ lives and will drive online ad spending budgets to record highs over the next few years. eMarketer estimates that US online ad spending will continue to grow at double-digit rates, reaching $19.5 billion in 2007, and $36.5 billion in 2011. According to Forrester’s marketing forecast, marketers will spend over $26 billion annually in 2010 on online display ads, email, search, and classified ads.

This trend is at least partially driven by the increasing number of broadband connections in the US (78% of all U.S. homes in 2006, Nielsen/NetRatings) and the overall increase in time spent online (69.2% of the population, or over 208 million web users in the U.S.).

As a result, U.S. marketers are moving to direct navigation as a means of advertising that generates higher than typical conversion rates by matching user’s intent better than any other ad medium.