Perceived Value & Deo Name Analysis - Competitor Perspective
There is certainly nothing illegal about the non-use of a particular domain name. Companies are well within their rights to use or not use domain names they register.
It may be of interest, however, for those who like to look at search trends, type-in ratios, and etc. to note that searches for the phrase, “peanut butter recall” for the period February 2007 and following show a significant activity spike. This Google trend map highlights the spike corresponding to the approximate publication date of the voluntary peanut butter recall press releases.
From its research at the time, Penguin SES learned that during the period between February 7, 2007 and April 8, 2007, the average number of daily exact match search results in Google was 498,228 for the phrase peanut butter recall. The average number of exact match search results for news stories in Google News was 495. Search results are one way domain investors measure domain value.
Today, a general Google search shows 26,200 exact match search results, while Google News exact match search results yield only a single page. While not all investors measure news results, our thinking is that the higher the correlation between the news results and the general Google search results (especially for an exact phrase match), the higher the value of the domain name.
Penguin SES also tracked the number of exact match keyword searches for the phrase, “peanut butter recall” from the time the recall was announced until the news bubble settled down. Using a well-respected keyword research tool for this analysis, we learned that the predicted number of searches for the major search engines was estimated at between 3,500 and 5,000 per day, for the period immediately following the announcement of the recall. For purposes of very broad illustration, let’s try to assign value from a competitor’s perspective (i.e., a law firm).
It has been estimated that of all Internet traffic, between 10 and 20% comes to Web sites from type-in traffic, or direct navigation methods. Some industry insiders peg the percentage at a lower, conservative rate, near 6%. Using the 6% figure, we can assume conservatively that, on average, the peanutbutterrecall.com Web site could have generated approximately 200 visits per day via direct navigation: 3,500 daily searches times a 6% direct traffic modifier. Using that daily average (200 visits/day), we see that the number of direct navigation visitors in a 30-day period of time would equal approximately 6,000.
According to one Texas-based law firm involved in prosecuting salmonella-related cases, at least 1% to 2% of all claimants who apply to their firm are accepted for representation. Regarding monetary compensation, the firm stated that a single claimant could be awarded a settlement of between “4- and 7-figures” in cases like these. Therefore, if we assume that approximately one-tenth of the direct navigation visitors apply (n=600), that would yield between six and 12 cases taken on by the firm for representation (1% - 2% of the 600 who applied).
The following is a very broad, basic, conservative model, and makes some major assumptions which may or may not hold true for this case. However, we present it as a starting point for discussion. If we assume that a law firm had obtained the peanutbutterrecall.com domain name, then, based on conservative estimates above, we begin calculations for legal compensation with a pool of 6-12 clients. Assuming all claimants were awarded settlements, minimum payouts could range from between $6,000 and $12,000 (4-figures compensation at $1K/ client, at the low end), to between $6,000,000 and $12,000,000 (7-figure compensation at $1m/client) in aggregate payouts.
It is generally acknowledged that firms retain approximately 1/3 of awards to cover their fees. Calculating at the high ends of the ranges, then, a firm could have potentially earned between $1,800,000 and $3,600,000 depending on circumstances. These figures don’t take into considerations any applicants who may have been directed to the Web site via any online, or other advertising, using this URL, nor do they address visitors to the site who may have found it had search engine optimization techniques been applied when developing a Web site for the domain name. Nor do they take into consideration any type-in traffic that may have occurred beyond the 30-day window. Remember, that the domain was not in the aftermarket and was obtained for the registration fee.
In addition to realizing direct financial gain through compensation, a competitor would also have had advantage and control over content on the URL. While difficult to measure on the competitor side, this control begs more questions regarding intangible values related to branding, consumer loyalty, etc. for the product. Even with ConAgra maintaining control of the domain name, the company still executed a major campaign to regain lost market share. One could only speculate about any additional spending that may have been needed if ConAgra had not successfully registered the name.
Given the above data, therefore, many people could say that ConAgra made a very wise investment in their acquisition of this domain name. Now we will examine just how competitive the conditions were for this domain name at the time of its registration.
Competition to Register the Domain Name
To contextualize the competitive nature of this deo domain name registration, Penguin SES learned that shortly after the press releases of the voluntary peanut butter recall were published, lots of registration activity seems to have occurred. Our research revealed interest and activity by several other players for domain names with words from the phrase. A recent search of MSN for the key phrase “peanut butter recall” shows several organizations still using some or all of the keywords in either a primary URL or a folder name for this keyword combination.
A check of registration attempts for domain names that utilized the keywords in various combinations, reveals a good deal of activity, though some of these names have since expired. Of note: a few of the registrations are in clear violation of trademarks.
Drilling down a bit further, it was also not surprising that legal entities were among those who registered variations of this domain name. Some firms even seemed to be aware of the brandability of such a generic phrase and its viability of being used in promotion.
One such case is that of the domain name registered using dashes. Not only was this name registered, it was also promoted via a press release for the law firm which executed the registration. At present, the URL no longer resolves to a Web page. However, referencing an archived copy of the page from Feb 23, 2007, we learned that the site promoted information about the recall and offered visitors an opportunity to submit information via a web form to see if they had a valid claim. This URL shows another law firm reversing the word order and applying a single dash in the domain name
Some law firms with existing Web sites who did not register separate domain names took advantage of setting up a subdomain or using the keywords in naming a folder.
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