Roy Barrett & Gary Landry are Montes Guests Tonight
08/23/2006 - Monte Cahn
Monte talks to Roy Barrett, Business Development Manager for Stormwest Marketing Intelligence, and online marketer, Gary K. Landry. His company has been responsible for providing outstanding internet ever since 1997. His specialty is in the area of taking small budgets and producing extraordinary results. His regular customers particularly value his practical approach to difficult problems
[Commercials]
Monte: Hello, everybody; welcome to another week of Domain Masters. I’m Monte Cahn, your host. I have two guests on tonight that I think will be very valuable for everybody. My first guest is going to be Roy Barrett. He’s one of the founders and the business development manager for Stormwest Corporation. Stormwest is a leader in interactive advertising and one of the leading technologies service providers for the financial services industry. Why is that relevant for domains? Well, uh, Stormwest owns about 10,000 domain names and uses them both for their current and future initiatives and we’re going to talk about the business and Roy’s experience with domain names dating back from the early days when domain names were free. I met them at SES and they’re also launching very interesting parking panel type product which will merge a bunch of parking companies together in one control panel; similar to our Traffic Club system only Traffic Club will be actually part of that parking panel and again another way to help monetize domain names both geo-targeted geographically and by industry segment and so I thought that was pretty interesting to have them on.
My second guest tonight will be Gary Landry. Gary is the current CEO for SEO Extreme Holdings. He was the former CEO of Fredericks of Hollywood and one of the founders and vice president of the e-Commerce and strategic division of TechData Corporation. Quite an experienced fellow and someone who’s coming up with a new domain keyword strategy around SEO optimization and we’ll be talking to him on the second half of the show. With that, we’re going to break for a couple commercials, pay some bills and be back on with Roy Barrett and Gary Landry. Stay tuned.
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Monte: Hey, folks. Welcome back to Domain Masters. And a great show. As I mentioned before, my first guest, Roy Barrett, is the business development manager and one of the founders of Stormwest Corporation. Stormwest is, again, a leader in the interactive advertising space and is one of the leading technology service providers for the financial industry. They specialize in media buying and lead generation for the mortgage, debt and cash advance verticals; we spoke a little bit about that in the last couple shows about these particular niche segments that are really valuable to the online affiliate and online advertising industry. Their lead generation and their contextual search monetization products are something that a lot of people use and they own about 10,000 domain names. Roy, welcome to Domain Masters.
Roy: Thanks for having me; how are you?
Monte: I’m doing great. I guess you recovered and everything from SES . . .
Roy: Oh, yeah . . .
Monte: . . . and back in the saddle, huh?
Roy: Oh, yeah, definitely. Trying to get back into things.
Monte: Great.
Roy: I hope it was a good show for you guys.
Monte: It was a great show for us and as the only ICANN accredited registrar and domain monetization company there, we def . . . definitely the cream of the crop and make a lot of great introductions and relationships. I’m glad we met you guys. That’s for sure.
Roy: Oh, definitely.
Monte: So give me a little bit of background and give the users a background . . . give the listeners a background a little bit about your business, how you got started and what Stormwest really does.
Roy: Okay. Well, both [inaudible] Stormwest as myself, you know, I started registering domain names individually back in ’91, ’92 and Stormwest actually formed as an entity around ’95, ’96, not necessarily associated with the interactive marketing industry or the domain name industry. Stormwest was mainly a print design shop. And we did creative . . . which eventually evolved into doing more and more web creative and we just . . . where we’re at today. I started buying domain names back in the free days when you had to fill out that Internet registration template and send them in. And eventually they started costing $100, I guess, for two years. And as far as registering domain names, we started acquiring a few here and there but compared to the market today, it wasn’t really cost prohibitive. It was cost prohibitive for us to buy them in scale. Now, we just recently started monetizing our domain names with a keyword [inaudible] and parking ads, which was probably within the last 12 to 18 months. And it’s working out really well for us. And we’re launching our parking panel system at TRAFFIC East in Miami in October so hopefully . . . we’re hoping that . . . it’ll be a good thing for us.
Monte: Now, you guys own about 10,000 domain names. What kind of industry segments . . . are they all around the financial debt consolidation/cash advance industries? Or are you venturing into some other spaces now with this portfolio?
Roy: Well, when we first started our portfolio, it was probably a good 80% to 90% financial services – mortgage names, debt consolidation, debt help, cash advance – even going into the student loan consolidations, some of the hotter growth industries of today. We found now that instead of focusing on our strict legion ration verticals that we can really step outside of that circle and instead of selling our inventory ourselves, you know, we can count on our fee providers to sell that for us. So all we do is aggregate the information, aggregate the domain names and you know, let them do the selling for us.
Monte: Right. Now, did you . . . are you buying domain names? Or have you been buying domain names that have been available to register? Have you been playing the drop market and the expired name market? Buying in stealth in the aftermarket and you know, on sites that are like, you know, SEDO or AfterNick or a combination of all?
Roy: A combination of all. Primarily, we started a couple of years ago playing around with the drop market and this was before all the relationships with the registrars and it was a lot easier a couple of years ago when we were playing. We would be pretty successful in getting page rank, high page rank names, high [inaudible] score names, and getting them the day they dropped. Now it’s a little bit harder with all the competition in the space. A lot of good names that we have carried over when they expired 2 or 3 years ago and we’ve renewed them, but like I said it’s only been 12 to 18 months that we’ve really been monetizing a lot of the names to their fullest potential, so a lot of the data that we have isn’t as thorough. A lot of these we use for search and optimization so . . .
Monte: Give me an example . . . give me an example of a couple of the names that you guys use for SEO and how you use your domain names for SEO, because we talk . . . I have a lot of SEO experts on the show . . .
Roy: Okay.
Monte: . . . and domain names have now become such a key part to their strategy on SEO . . .
Roy: Mm-hmm.
Monte: . . . give us like a little bit of background on how you guys use it; how people should use it that are listening, use the domain names from an SEO standpoint to their advantage.
Roy: Well, from an SEO standpoint, see we’re moving away from that model now that we’re actually taking these and putting them on the domain monetization sites, so for example, one of our sites, which was once a big bank (they dropped the name), it’s a mortgage site and it gets significant traffic. We . . . for years we had a mortgage forum on that site and this site now we’re actually driving to a domain parking page and its generating significantly higher revenues from that parking page than when we originally drove it directly to a user forum, so . . .
Monte: Right, right. That was one of the things that we’ve been talking about through several of these shows that there’s the big debate that’s out there that does having a site with content or with, uh, that’s really focused on the linguistic meaning of the domain name with a bunch of stuff actually monetizes better than even a parking page that maybe has, you know, ten linguistic links on that particular page and really the verdict is still out on what monetizes best because you don’t know what the end user’s actually wanting to accomplish by actually typing that domain name into the URL line.
Roy: Yeah, well, I think it really depends on the name, it really depends on your fee provider; it really depends on the actual market. If you’re . . . if all of your inventory is selling on the Pay Per Click searches, on the Googles and the Overtures and all of the feeds that your provided . . . that your parking provider is using, then definitely, you’re going to be able to get a higher yield because they’re getting the price up so high. Whereas if you get into a niche market where you’re generating . . . it really just depends on where the margins lie You can generally generate more yields where you have more of the margins and more meat on the table so if you’re doing with the end users but you know it all goes back to uhm, do you want to have your own sales force where you’re taking all that inventory, monetizing it yourself and doing . . . closing it all the way to the end user or would you rather just hand off the click [inaudible] revenue and keep going.
Monte: Right, right. And so you’ve had experience with both and now your strategy for the 10,000 names or some segment is to build out some and to, you know, leave some on a parking page scenario?
Roy: We’ve built some out but instead of just doing a strict Pay per Click strategy on these, on a lot of them, we drive our own traffic too. Like for example, on the mortgage, we’re getting upwards of, on some of these, $150, $180 per lead so it benefits us most to drive the traffic to our forum whereas if you try to build it out yourself, you try to build out your own advertising network, you can’t . . . we have a network of 3,000 lenders, so we’re selling directly to the end users, whereas it’s taking years and years and years to build out that business. Whereas, Google, they bid all the way up to maximum amount they can pay, so it’s . . . we can’t even buy paid keywords on Google, on Overture, because they’re bid up so high; it’s so competitive. So, you’re better off just driving the traffic to that particular feed provider or . . . generally, it’s not worth getting into the logistics of the business itself.
Monte: Right, right. And so, so, that’s interesting because that’s more of a CPA model, obviously; and so CPA is coming back around in our industry even on from a domain strategy standpoint . . .
Roy: Mm-hmm.
Monte: . . . so CPA existed a long time ago, then kind of got pushed to the side and now coming back to life – talk to us about the strategy of, uhm, or why you see that resurgence – Google’s now launching in beta a CPA monetization system – explain to the users since you’ve had experience in the past with that and stuck to your guns on CPA models in terms of your current business model, and how one, you think, could use domain names to their advantage in that.
Roy: Oh definitely. CPA’s a great model. CPA’s a model that works when the products right, when the sales force is right and you can monetize correctly. What you have to do is you have to have a really intimate relationship with your metrics and your pricing models. A CPA has a CPC, and in effect a CPC price attached to it so just like an effective CPM price attached to it. You just have to know how to back your metrics in both ways, whether it’s your target CPA, when you’re buying on a CPC or CPM model or vice versa. If you have a good relationship on what you’re traffic’s worth and what industries you work best with, then it’s really not an issue of pricing model its set at. If you know that you’re getting a $1 a click on Google, but you can generate a lead for $40 and it takes you 40 clicks to generate that lead, then, you know you’re about equal. Now if it takes you two clicks to generate that lead, then you’re better off paying other CPA models than you are CPC.
Monte: Right, right. And so this obviously works well when you’re in niche markets, like you guys are, where you know the mortgage industry, you know the debt consolidation industry. I guess it’s much harder when you’re spread across tons of different verticals, because it’s hard to have relationships with all those different verticals, right?
Roy: Oh, definitely. And there are a lot of companies out there that try to do too many things. They’ve got big sales forces and they try to monetize these leads, they try to monetize the traffic; they try it from every angle and it’s really impossible, you know, unless you’re the size of a Google and your traffic source is your own. It’s too hard to go out there and manage all the traffic in one place. So, you know, on new verticals, unless its an under-monetized vertical, we wouldn’t go so far as saying it would be worth it to build your own vertical unless you know its something new and your on the edge of it. If everybody else is dong it, it’s probably already too late.
Monte: Now, knowing the space that you’re in, where do you think the next hottest vertical is that you can foresee, you know, both coming to fruition now and maybe into the future?
Roy: Well, I mean, it changes all the time. It really depends on factors that you can’t project. If you look at, like, student loan consolidation was a huge industry and everybody was doing it, uhm, until July 1st when the Stafford loan rate went up. Now it’s a little bit tougher but they changed the laws at the end of June saying that you can refinance with a new lender, so, you know, unless you work in the industry every day, day in and day out, its hard for you to know what the hot markets are and its hard for me to say that I know everything about every market out there, so what . . . the best way to price is . . . I mean, you can wait for the bids to go up on Google or Yahoo! but chances are if its hot enough, you’re bids are going to go up and your definitely . . . you’ll get more yields out of your traffic as soon as the real market price is up.
Monte: Right, right. Right. Right. And so, you guys are still registering many domain names, every single, you know, every single week, I guess, or every single day, right?
Roy: [inaudible]
Monte: And I understand you’re actually looking at other extensions besides .COM. You’re getting some success out of some of the second tier TLDs that people wouldn’t think monetize that well.
Roy: Oh, yeah, definitely. The .BIZ and .INFOs, you know, we’ tried it out as a small test on the monetization and some of them were doing, you know, pretty significant revenues on for domains that have only been out there a year or two years. So, yeah, an experiment and even if it’s not an easy slam-dunker, you don’t think the names going to be right, just test it and see. The only way you can do it is go out there and test the names and see how they work for you.
Monte: Right. Now from the metric standpoint your metrics are the core of your business and making sure that you’re measuring constantly on your performance and spending less and earning more all the time. What’s the best measuring tool that people can use who are listening to measure those types of metrics and that they’re getting good ROI.
Roy: Well, really, you have to watch your metric and see, your standard metric, when you’re monetizing domains, if I’m understanding your question, its directly in your domain monetization, if you’re monetizing your domains, you want to see, you know, per impression, how much your making, you want to watch the source of your traffic. If you know your traffic is mainly, uhm, German type in traffic then you may try to [inaudible] try to work better with German search results, with German feed providers. And that’s really the main thing is when you do it in scale with volume, a lot of people out there are registering tons of names and they’re really out there pushing all different types of names. You have to really pay attention to what you’re registering and make sure you’re not under-monetizing your domain traffic.
Monte: Now are you using any particular tools like brand name tools both for the measuring of the metric side and for the selection of the domain name side? Do you use any outside tools other than what you guys have in house?
Roy: Every that we’ve built is in-house. All of our . . . all of the conversion side with the cookie and [inaudible] tracking. There are a lot of great tools out there. Everything we do is custom so we have to back our numbers in real time so we optimize a lot of people that come back and re-optimize every hour, every week or every month or they go in by hand and say, okay, this is converting and [inaudible] use more of a real time approach and we scale everything by a lot of different [inaudible] not just . . . not just which one’s converting, if this ones converting better than this one. We slice by geo-targeting tools, we slice [inaudible] part; we do a lot of different things to ensure that we’re getting the most value out of each domain. And you know, it’s always a cost [inaudible] tweaking process so hopefully by the time we launch our platform we’ll be able to really bring some insight into . . . into the marketplace.
Monte: Right. Now, the, uhm . . . you’ve had a lot of time, I guess, because you’ve been in the business for so long, you know, you’ve been pretty open to all kinds of different partnerships to help advance your business, you know, partnering with others – so what’s you’re philosophy on partnerships with other organizations, other people in your space, even competitors?
Roy: You know, you just have to be open partnerships with competitors. You can’t be too cocky about it. Even if the idea sounds crazy. When I first started doing the direct response interactive, about 1999, there was a lot of resistance out there from these .COMs CPM networks; they didn’t want to try to run this on a CPA. You know, a CPA was just too risky for them; they didn’t want to take the risk and a lot of those companies are gone today. It was the ones that were out there testing the new models that were really making a dent in the industry and a lot of those that are out there are still around today. The ones that are too cocky about their traffic are . .. they end up with their traffic unsold. And its . . . you can’t do that. You can’t do that. You have to be open to at least test and re-test.
Monte: Right. And do you - so you currently have . . . does Stormwest have existing, you know, existing partnerships and stuff, even with your core competitors in order to help advance the industry?
Roy: Oh, yeah; definitely. I mean, we work with our biggest competitors. We have a [inaudible] relationship with many people. And its just one of those things where we can supplement other companies where their weaknesses are and vice versa. And, you know, we shouldn’t all be . . . we help uplift the industry by cross-selling and that’s the only way we can stand and succeed.
Monte: And what are some of the hard lessons that you’ve learned, you know, through your experience? What are some of the key mistakes that you’ve made that you’ve learned from that’s helped really turn around direction in your business?
Roy: You know, like, on the domain monetization side, it’s really more than a one-[inaudible] percentage of . . . for instance, feed providers. You can’t look at it, like, okay, this is 80% of a goal feed. It will pay out the highest. Or whatever the metrics are. You have to look at it from different angles and everybody step back and get perspective. On the domain monetization, it’s not its going to be business; you have to look at the numbers at the end of the day because they’ll tell the truth. It doesn’t matter have fancy or colorful the templates are on the landing pages. You have to look at the numbers. And really, I think, the biggest thing is tomorrow may not come. You may wait for tomorrow to come and tomorrow may not . . . may not ever come. You know, these rules are made up as we go; they change all the time. I can function one way today and it may function differently tomorrow. It’s always changing. It’s ever changing, so, really you just have to learn to monetize today and save for tomorrow. You know, this is . . . normal business rules, they still apply here. Even though it’s a hot growth industry and everybody’s in it, if you’re not smart about it, your business will fail, and you have to be smart about it otherwise there’s nothing you can do; there’s nothing you can say that can make it any better. You have to follow normal business rules.
Monte: Right. That’s a good point. And, can you share a little bit about, like, what are some tips and tricks that you’ve learned from domaining over all the years from the free days to now what’s going on that people, people that are listening, can use to get core brands, that they may not know about? Not the basic stuff but share a little bit about, you know, secret strategies that you used in the past to get the domain name that you wanted or help it monetize better or what have you?
Roy: I sat there years ago and just hit the WhoIS registry over and over and over and waited for domains to become available all the way to using our automated tools and custom scoring scripts that we use today to try to get the good names. Really, I think that the rule is it’s not a crazy genie bottle; it’s a business and you have to be able to look at it as a business. And, what I’m seeing out there in the domain industry is a lot of these people are smaller time and they’re not monetizing correctly. They’re not utilizing the best of breed feeds; they’re not utilizing the best providers for the names. And you know some of these names out there are great but they’re on these second tier parking services. They’re not doing what’s in the best interest for those domain names when you have these top tier domain names. So, you know, some of them you want to pick for yourself and develop it and grow the domain name but you see a lot of really elementary domain name owners not monetizing correctly. They’re not doing what’s in the best interest for those domain names.
Monte: Right. And you feel the best interest of the domain names is to . . . ? I mean, just go into it just a little bit. I mean, how are you peeling back the different domain names that you own and making sure they’re on the right channel so that you are getting the best bang for the buck on each one of those domain names?
Roy: Really, you just have to test and re-test and test different services, try them out and then do it constantly. Uhm, that’s the only way you can tell. You know, do some research, do some homework. Find out what feeds these providers are using. Make sure, you know, they’re being upfront and honest with you in disclosing how the traffic’s monetizing. Use some accountability tools to see how many impressions are coming to your site. You know, if you have to, host your own DNS for awhile. Uhm, . . .
Monte: So you can tell that your stats are matching up to their stats.
Roy: Exactly. If you’re getting 10,000 impressions to a domain name and they’re showing 7,000, something’s happening too slow. Or, you know never know, I mean, there are unscrupulous characters and these services, they pop up, they’re here today, gone tomorrow. So, you want to make sure that your numbers sync up, that you’re getting paid on time and that it all works out.
Monte: Right. Well, great. Now, before we end up, give us, you know, a two minute blurb on the launch of ParkingPanel.com. I know that we’re going to position Traffic Club to be a part of that program for you. But explain what’s being developed, why you think its important to launch and where you see it in the marketplace.
Roy: Okay. ParkingPanel is our domain management system. Basically, you sign up, you give us all your domain names and you pick your services. And what we do is we rotate all of your domain names through the services that you picked. Now you pick your own services in there, so if you’re on Traffic Club or DomainSponsor or Goldkey or whatever system you’re on and you rotate through all of those systems, you monetize traffic and you go back, you check your own numbers, you have the relationships directly with each parking service, so they cut the checks directly; we’re not a middleman. We’re just a redirection service. And, really what we want to do is form a layer of transparency between domain owners and parking services. Right now there are a lot of people out there that [inaudible] trust their name service to a random domain service that may be here today and gone tomorrow. We provide you with the stats, we achieve geo-target, we achieve geo-slice, so its . . . you’re performing really well for a certain domain name but you [inaudible] traffic. It’s a monetizing . . . you can send all the UK traffic to a second provider. If you’re providing really good during the U.S. hours at night in the U.S., you can send . . . you can day park your traffic. You send that to a different provider at night. There are a lot of different metrics you can judge and basically we don’t . . . we optimize and we rotate but you go back, you look at your RPMs, you see how much revenue you’re generating and you pick your own services and you place your own services and we’re transparently we’re just a tool for you to pick up the different parked services that they have to choose from.
Monte: Right. And how many are signed up to you already?
Roy: Currently, right now, we have 7 or 8;hopefully, we’ll have them all by TRAFFIC East in Hollywood – I understand you guys are doing the auction there?
Monte: Yeah, yeah. We’re doing a huge domain auction there. I’m on a domain financing panel as well but we’re holding a live domain auction. We’re expecting to sell between $5 million and $10 million worth of domain names at that conference.
Roy: Wow. Oh, wow, yeah. So, hopefully, we’ll have everybody on board by TRAFFIC East and really, we’re out there to put the word out and to provide a layer in transparency so we’re basically just a tool to make sure everybody’s getting the most value for their monetization efforts and the domain names are being monetized as well as they can be.
Monte: Yeah, that’s a good point. And that’s one of the purposes of Traffic Club, is that it has multiple feeds in the system for that very reason and it does the self-optimization and self-monetization for you so you don’t have to figure out which does do well. Because like you said, different systems monetize better on a domain-by-domain basis. There’s no way for you to determine . . . there’s no way for you to know which domain names are best in a particular industry segment because the market and the advertising business changes on a minute-by-minute basis around the world, 24 hours a day, and there’s new deals struck at every minute on all the different networks, primarily Google and Yahoo!, but against each other, even. And so its always hard to find out if they’re in the best place and so that’s what your system’s going to do is help out with that, and that’s what Traffic Club does as well.
Roy: Oh, definitely. And, you know, one of the things that we do as far as the transparency goes is we give full access to the server logs, we let you see which spots are hitting the names, we let you see pretty much . . .we’re transparent, like I said, so you can see, okay, who’s going to the site, what pages are they looking for and where did we send this traffic so we let you slice and dice as much as you need to and hopefully we can find a good dynamic and we [inaudible] as well but just so you can pick your domain names and if you have any questions, discuss it in a community setting.
Monte: Great. Well, Roy, it was great having you on the show and we really appreciate the helpful hints and the years of experience that you had with domaining and also being successful with Stormwest. And where can people come to help . . . I mean, can people come to you with their domain names and you know, drive revenue and traffic through the CPA networks that you guys developed? Do you guys have that set up so you can help other people monetize?
Roy: Oh, definitely. Parking Panel, really, our angle with it is we have a bonus pop-up feature which we hope to integrate a little deeper into the system to where, if you want to redirect to a CPA network, eventually, we’ll have that path to go down, so . . .
Monte: Cool.
Roy: . . . if you have a mortgage name, we can send it to one of our mortgage sites and you can really test that out and know your metrics between that and your feed providers.
Monte: Cool. Alright, well, thank you very much for being on the show . . .
Roy: Thank you.
Monte: What’s the best place people can get a hold of you in case they have any additional questions or want to ask more questions about how they can work with your company?
Roy: If . . . you can go to Stormwest.com or email me direct at rbarrett (B-A-R-R-E-T-T) @stormwest.com.
Monte: Great. Well, thank you very much for being on the show; we look forward to working with you; also, your domain company. And we’ll see you at TRAFFIC East on October 24th.
Roy: Alright; thank you.
Monte: Okay, thanks a lot, Roy. Okay, folks, stay tuned. We’re going to do a short commercial break and be back on with Roy . . . I mean with Gary Landry. Stay tuned. Be back in a minute.
[Commercials]
Monte: Hello, folks, welcome back to the show. Again, a special thanks to Roy Barrett from Stormwest. In the podcast, you’re going to get some really points, so make sure you download the podcast of the show to listen to Roy’s interview again.
My next guest, who I also met at SES a couple weeks ago is Gary Landry. Gary is the current CEO of SEO Extreme Holdings. He was the former CEO of Fredericks of Hollywood – we should definitely get into how he made the Internet and the catalog section successful on the Web. He was the co-founder and chief operating officer of EC Works, which was an e-commerce consulting company and also he was one of the founders of the e-commerce and strategic planning department at TechData Corporation, so he’s had a lot of experience in the online vertical e-commerce and also the SEO industry. Gary, welcome to Domain Masters.
Gary: Thank you, Monte. Glad to be here.
Monte: Yeah, glad to have you on. So, give me a little bit of background about yourself, how you got into the Internet business and some of the key points that you’ve learned from your past experience that’s helped you start SEO Extreme Holdings today.
Gary: The . . . my start in the Internet goes way back to the days when the Internet was not able to be used to sell anything. It was just really a communication device between Universities and for the Military and that was part of how I got started at TechData Corporation. We studied the Internet and since we were a wholesale distributor, we were looking for an economical avenue to be able to transmit data and you know, get off on the cheap - be able to use a free communication mechanism to be able to transmit millions of pieces of data to all of the resellers that we sold to. So that was kind of the start of that. And for probably half my career it was really all about being on the wholesale side of things, selling almost to a captive audience. When you’re a corporation like TechData, about $20 billion in sales, the resellers really only have a choice of three or four outlets to get to, to get their products. So, you know, that was more a captive audience. It didn’t involve any search engine optimization. Search engines, back in the day when I was getting going, really weren’t used so much. There was, you know, the early foundings of . . . or fledgling founding of Yahoo! was just starting. But really my first introduction to the Internet was really with a captive audience, so it was a business transaction. People pretty much had to come and at least give us a try and it was up to us to make that experience as good as we could get it. The real first experience I had with search engine optimization was a consumer transaction, where it wasn’t so much a captive audience, it was Fredericks of Hollywood. And there, I had the opportunity to both use the Internet and catalog and kind of intermix them from a marketing standpoint in order to drive business; and we drove . . . I was very fortunate because Fredericks didn’t do it very well before I got there so the rate of growth there was pretty phenomenal and it was my first experience with a paper catalog and being able to utilize that to both drive sales and more importantly, to drive people to the Internet, where it was less expensive, again, for us to take orders.
Monte: Now, did you . . . when you first got there, what percentage of Internet sales would you say was occurring before you got there, and then what did it end up to be afterwards?
Gary: Before I got there, the Internet sales were probably less than 1/2 % of the business and when I left there (I was there for about 3 years – I took them into and out of Chapter 11, because there were other financial problems going on at the time) so by the time I left there, it was about 35% to 40% of the company revenue.
Monte: So, would you say that the introduction of turning around Internet sales really helped the company come back out of bankruptcy?
Gary: Huge. It was huge from a cash flow standpoint. It was . . . just from a brand and the demographic of customer being able to reach a much younger customer base, because not all customers, especially the female, 18 – 25 age bracket, they were much more savvy with shopping on the Internet then they were receiving a paper catalog through the mail, so it . . . or going to the Fredericks retail outlet . . . retail stores.
Monte: And just to get an idea of what that percentage means, what was annual sales for Fredericks of Hollywood?
Gary: Uh, even though they’ve been a company around for a long time, they’re a private company and I can’t really divulge the exact sales, but they were north of $300 million in sales.
Monte: Okay. Okay. So, significant, close to ninety – a hundred million dollars of the business was online, basically, when you got done.
Gary: Exactly.
Monte: Which is very significant. Okay, good. Now, take us into your current role on what you do and also, SEO Extreme Holdings.
Gary: What I do now, I’m actually the CEO of a start-up intimate apparel company, called GenEnre and we run two websites now. We’re going to be running four websites in a consumer transaction where we sell women’s intimate apparel mostly – some men but mostly women – to an Internet customer and there, because we’re a start-up, we used a combination of Pay Per Click campaigns that we still use pretty effectively today and a mixture of SEO at getting search engine . . . getting us ranked in the competitive world of intimate apparel. It’s pretty tough because that world is kind of blended . . .
Monte: Intimate apparel is really competitive, right?
Gary: It’s competitive because a lot of the adult industry and the porn industry, which has huge budgets and very, very competitive on the way they go after search engine optimization. We’re competing with some of them also, even though we don’t sell any of their products and don’t . . . you know, we’re not an adult site, its really . . . we’re selling intimate apparel, whether it be bras, panties, sleepwear, whatever, you do find yourself competing in that world with a very competitive industry.
Monte: Right. And they’re pros, because they’ve been monetizing their websites for a very long time and have really done a great job of monetization, SEO, key word buying, dominating domain names, all kinds of stuff, so it’s a hard space to compete with because they’re good at what they do.
Gary: Exactly. I actually studied the adult industry and the porn industry quite a bit from the marketing standpoint because they seem to be at the leading edge of anything that’s new or innovative coming out. So, you know, being able to watch and study what they do and then find a way to apply it to, you know, to the more mainstream industries is something that we constantly do.
Monte: Right. Well, ironically, many of their core businesses are now flowing back into the mainstream industry and they’re using, like you said, they’re using their core strength of what’s made them successful in the adult industry and bringing it over to mainstream and a lot of the domain buyers on the mainstream side are now the former adult guys and they’re very successful at what they do.
Gary: Exactly.
Monte: That’s very interesting. So tell us about SEO Extreme Holdings, which is another venture that you’re currently involved in and basically, the reason why I had you on the show is because you and I had a nice side discussion in one of aisle ways at SES and you talked to me about your domain experience and a new approach that you have that you’re going to be introducing on, you know, bringing up domain names in a different manner than they currently are today.
Gary: Exactly. What we’ve seen and what, I guess, the great preponderance of domainers are doing now is they skip parking pages and optimizing on either mistypes or you know, people curious about a particular word with a .COM following it. There’s good business to be had in that. That’s a good business to be in and a good way to go about it for a short term. What we kept on seeing, from our own domains, is that even though we had pretty good traffic, we could . . . we found that by doing just a little bit of work and in some cases a lot of work on our end, we could get the domains ranked in the search engines for organic search and get more than 10 times, 100 times, a thousand times the volume of just type in traffic. So we figured on taking a short term and long term approach, get the domains up, get them up and running with either a parked page or with Google ad words, YPM, you know, Yahoo! Network Ads, get some monetization occurring; and while that was going on, we started experimenting with a couple of different techniques – you know, its all the basics, key word, content links – so we went after, you know, key word analysis and looking at niches that we could get into that were competitive but not out of the realm of possibility. We wanted to achieve monetization pretty quickly, so we didn’t look at anything that was going to take a 4, 5, or 6 year time frame, something much shorter. Then on content, that’s recently been a little more competitive and a little harder to get at because the unique content filters that Google in particular are using is getting more effective. So trying to find unique content and an approach to get that content up more quickly has been a little bit of a challenge but its something that we’re working on fixing. And then finally, the linking piece – being able to link from both sites that you own, sites that we would call sacrificial sites, you know, our feeder sites, sites that we don’t expect to monetize but we expect to help boost the search engine rankings of our “money sites,” sites that we expect to make money on. So, doing all that, we spent quite a bit of time and a lot of testing, doing things pretty scientific about, you know, doing split tests and seeing what worked, what didn’t work; controlled test where we changed one thing on one website and not on the other and see what it did across the Google-Yahoo!-MSN space and what we really came to the conclusion is that in manual process, its just too hard. We would not be willing to do that much work to achieve the goals that we were trying to get to on monetization. So, that’s when we set out on this path and that’s one of the things that you and I spoke about, is the automation of all these things.
Monte: Right. Which adds a new kind of a new spectrum in to the domain monetization business, which is, you know, something we’re deep into. So I thought it was very interesting because, you know, parking is now prevalent, domain parking, people making a lot of money parking and everybody’s flirting with some site developments on their parking pages, mixing in ad words and other types of linking strategies along with some content, thinking that its going to monetize better. You know, we’re preaching an approach where, you know, sure we have tons of customers that just have a portfolio, they’re just parking all their domain names, they’re making lots of money and they don’t have to do much work. But there are some others that are serious about taking advantage – like I just had Roy on from Stormwest and there are certain niches that perform extremely well with content, on CPA networks, through affiliate networks, those types of things that you can double, triple, quadruple your parking revenue if you’re in the right niche with the right content and the right conversion.
Gary: Exactly. Exactly. That’s what we’ve seen personally from the areas that we’ve gone into is that we can get . . . because we don’t have a huge portfolio (we probably have between 700 and 900 domain names, URLs that we have) and we make a decent amount of income, but what we’ve really seen is right now about 5 domains are outperforming hundreds of domains just because we’re able to get them ranked and because, you know, it’s a competitive term; there are a lot of searches, we get a lot of traffic through by taking that approach. And I agree with your analysis and also with Roy’s. The days of parked pages making money is still going to be here for the foreseeable future but the order of magnitude of income you can get from getting ranked and not having to put out a huge amount of work for the income that you get off of it, I think there’s a more strategic view of where you can go with domaining.
Monte: Right, right. Definitely. And, the facts are the facts and that is I was on this panel at SES and both Google and Yahoo! verified the stats that are out there from a number of different sources – 10% to 15% of their current search income – of all their search income – comes from type in, direct navigation domain names. And if you can mix, you know, parking page solutions along with the approach that you’re taking and some of the affiliate networks that are taking, you can really take advantage of the goldmine that is out there at the next level. I mean, we’re at a certain level where, you know, no one would think they could make money by just sitting on . . . by just having a domain name going to a, you know, linguistically driven ad page, but now you can take it to the next level and make it a place where people come back and visit.
Gary: Exactly. And the thing that, like I said, where we ran into a little bit of difficulty, is that it was hard work. If you’re going to hand-crank out pages, that’s a hard thing. I mean, the people that do that and the major, say the major news sites, you know, the CNNs of the world and the Yahoo! News of the world, they have huge staffs and they, you know, they’re public companies, well-funded, they’re able to . . . with large IT staff, they’re able to take and put out a lot of information building up their brand. But what we’ve tried to do, you know, for ourselves personally and now this tool that we’re building, is really, how do you make a website look like it was coded by hand, developed by hand, put up by hand, so it has that human look and feel – that’s what we call the sniff test, the human test, in addition to the robot test. Its very easy to fool the robots to think that you’ve put up a page and everything is great. They’re not that linguistically sophisticated at this point to be able to take and look at real junk – they can look at repeating words that, if you have a fairly formulated sentence that makes sense kind of in a broad sense but if a human were to read it, they’d say, wow, this is really poor content because I don’t understand what they’re trying to get across, what the point is. If you take and go the converse of that, and say, every piece of content that you put out is going to be great content and every piece of content that you put out is going to be not only linked into but linked out of in a SEO optimized fashion, to do all that and do the other things that we consider how you make a site non-foot printable – like random registration, registering, you know, having your registration of different sites on different days; random IPs, where you’re not running all of your sites on the same IP; random links per page; random number of links; random templates; CSS files; articles and feeds being randomized; and then what type of content – do you put an article and a news feed? Do you put two news feeds and an article? Having that randomized and then, finally, the time of day that it appears on the Web and day of week is all randomized. Well, . . .
Monte: Or time of year.
Gary: Exactly. Exactly. You know, if it’s a seasonal business, it doesn’t make sense, you know, for you to be putting out lots and lots of information on it out of season; the reason being not because it wouldn’t help you from a ranking standpoint in the short term, but long term it just doesn’t pass the sniff test. You know, the season’s over in basketball; what’s all this 100,000 pages a day going up on this basketball site.
Monte: Right.
Gary: It just . . . its everything that we’re trying to automate is to keep you under the radar screen. There’s no reason . . .
Monte: Now, it sounds, like, you know, when you really think about all those things that you describe in detail, you know, that is the key . . . those are the key . . . I had Bruce Clay on back in July and he walked through a scenario where, you know, using the 80/20 rule, you could probably get indexed on the, you know, on the first, you know, within the first 3 pages of Google, but to really get on the first page in the first 3 spots, you‘ve got to really sweat the small stuff. You mentioned five or six major things that are sweating the small stuff but no one has the time, energy, knowledge, you know, the general person doesn’t, anyway, especially the domain parker or even the sophisticated domainer that’s not really into their own, really into their own semantics and development and all kinds of other stuff – those are things that really get you to the next level by getting that granular into your strategy. Correct?
Gary: That’s correct. And that’s even for us. And we have some pretty sophisticated programmers and detail techie guys. Even for us it just got tiring. I mean, its . . . if every piece that you put up you have to go through this, you know, 30 or 40 item checklist to make sure that you have covered all your tracks, making sure that there’s no possible way for engines to trace back and find that you’re doing this in an automated fashion, that’s tough to do, you know, when you’re doing it by hand. I mean, I fell victim to, in the early days, you know, the automated page generators. You know, we can take and read news feeds and just put up the same thing everyday and generate, you know, a hundred pages a day, a thousand pages a day, a hundred thousand pages a day and just spit them out there. You know, that used to work, you know, about 3 years ago, 2 years ago. That doesn’t work anymore, especially on Google where they’re getting more and more sophisticated. So just the taking search engine optimization from a technical level and make it more a forms based, you know, fill in the blank type of approach, is really what we thought we had to do for ourselves. And once we did it for ourselves, we started thinking, you know, a lot of people that would like to do that and there’s so many niches out there to make money on. We’re certainly not worried about anyone stepping over anyone else. There . . . you know, its . .. we really believe in our approach. We try to go after niches that no one else is in. You know, we’ll take a 100 niches that we can get ranked Number 1 and you know, on the first page of Google in say, 6 months or 4 months over one site that’s going to take, you know, 6 years. We have . . . we’ve done that with one instance. One of the sites that we have that were ranked #1 in Google for a very competitive term in the sports area, we’re competing with 49 million pages and we’re ranked #1. Just like Bruce Clay was saying, we didn’t get there by just randomly putting stuff up. We really had to sweat the small stuff and get all those details that we just discussed, you know, kind of ironed out.
Monte: Yeah, definitely. So it sounds like it’s a complicated process but you’re . . . do you basically have it, I mean, with a high degree of confidence that you’ve been able to get to the majority of these small things and basically automatically, you know, do this for a particular domain? Like . . . give me an example of how this process is going to work if we put you as a supplement on Traffic Club, for instance, and now somebody has, okay, they’ve been parking for awhile and now they want to get into the next level like we’re talking about – give me an idea or a map of what the process is going to be and what the cost would be on something like that. Is it a rev share? Do they have to pay in advance for the development? How is all going to work?
Gary: Typically, from a costing standpoint, it’s a pretty much a subscription service and subscription service takes care of everything. It takes care of the software, the content, the hosting, everything. And the background of all the people that are involved is, you know, I’m from Fortune 500 IT background and so are the other developers, so its not on a service sitting in someone’s living room. These are in data centers, full racks, total facilities, Halon fire equipment, diesel generator back up, the whole thing. Because when you get a certain level of income, you really can’t afford to be without that income. You don’t want to have any downtime. So that, on the financial side, that’s what’s going on with the subscription service. We’ve not only set the amount yet, but it will be very competitive with just raw basic hosting. If you just went and said, I want to host my site on some nickel and dime site for some very low dollar amount per month, it’ll be very competitive with that, but what you’re going to get is all of the things that we talked about randomizing through a forms-based input. So, for instance, you register through Moniker.com; what we would want to do is have that automatically set up with a DNS transfer pointing it to the right box, so that they don’t have to worry about that . . .
Monte: Right.
Gary: They put in a key word and we’re currently loading our database now has about 4 million key words. By the time we’re finished with the, ah, getting ready for the beta, we’ll probably have in the order of maybe 100 million to 200 million keywords, so they can do some key word research but of course they can certainly use WordTracker, KeywordDiscovery or any tools that they’re used to; load up a handful of keywords – that kind of sets the theme of the website so that particular website now has been themed appropriately and we now know from those key words what we’re going to link to and how we’re going to link into it.
Monte: Yeah, that’s, ah, that’s ah . . . is there an idea of what that cost is going to be? Do you have an idea of what that cost is going to be per . . . is it per domain? Per customer? What is it?
Gary: It’ll be . . . what we’re thinking is doing a bundled service where it’ll be per customer where you’ll get blocks of domains. So, you know, for a block of, say, 50 domains, you can take them and set these all up. The thing that it also does is from a . . . from the feeder sites and money sites, you put your feeder sites in, the sites you’re willing to sacrifice and it will deep-link from the feeder sites into any and all of your money sites, so it’s kind of . . . its one-way linking and not round-robin or mini-net. When we . . . when we’re doing a lot of testing – mini-nets seem to work for awhile, you know, A to B, B to C, C back to A . . .
Monte: Right.
Gary: . . . but recently, you know, I’d say about a year ago or a year-and-a-half-ago . . .
Monte: They’re on to that.
Gary: . . . they understood that. So from a strategic standpoint, we’ve taken the approach of you’ve got to have A link to B, B link to C, A link to C and C’s you’re money site, so all they look at from your money site is that its getting inbound links from sites that are all themed appropriately for your industry and each of those sites has external links, you know, whether its coming from blogs, social networks like Flicker or MySpace. But all of those things, instead of having to go out and do them by hand, really, its in a . . . we’re not working on our quick set up screen. The quick set up screen probably has six parameters that you set; hit go and your done. If that’s all you want to do, you will get, you know, a certain level of success. Those that are going to get their sites ranked higher if they’re in the same industry using the same tool are those that really focus in on the content. So, you know, we’ve got writing arrangements with freelance people that will be putting out a lot of articles very inexpensively, as well as, you know, news feeds, press releases; anything we can take and blend where we don’t get duplicate content. Because we’re very aware, especially, the hot topic at SES this year in the Google has in their sites duplicate content and they’re getting pretty sophisticated about finding it.
Monte: Yeah, yeah, definitely. Well, that sounds very interesting. And a proposed cost per block of 50. Have you guys decided on what that cost is going to be yet or is it too early to reveal that?
Gary: Too early to reveal in detail. We’re thinking its probably going to be around $10 per site per month, which is the kind of basic hosting that you’ll get on a shared box. These will be all dedicated boxes. And, you know, again, when you’re . . .
Monte: Well, that’s not bad at all. So, you’re going to be able to, you know, justify the ROI on that.
Gary: Yeah. If they’re hosting at all anywhere and having to do any manual work at all, this will be the dream for them, to be able to do this. And, what we . . . part of the challenge that we have with ourselves is we’re going to try to see, you know, what would it take if we had to realistically match content for content, page for page in just time. You know, a lot of people that are already making good on the domainer level, the type-in traffic, you know, even if they value their time very, very little, if they just want to spend some time and not invest in technology, we can come up with a pretty good estimate of how many hours is it going to take to do it by hand versus what does the automated system do and it really becomes a no-brainer. I mean . . . we couldn’t keep up with domains that we had loading them with new information everyday when we’re doing it by hand just because the hours in a day ran out.
Monte: Yeah, yeah.
Gary: It didn’t matter how much money we were making; we just ran out of hours in the day.
Monte: Right, right. That’s my problem. [laughs]
Gary: [laughs]
Monte: I’m running out of hours in the day. I’m on so many hours of the day. Well, Gary, that sounds very interesting. We look forward to working with that. Just before I let this interview go, we always try to get some really key tips and tricks. You’re a seasoned professional; you’ve been in the business a long time. Give us a couple, you know, really good pointers, things that maybe people don’t know about, some secrets that you’ve learned through out the years that will help the listening audience be more successful in what they do. You know, not the common layman thing but very strategic things that you know about that you’ve learned that nobody else really knows about that you can share with everybody.
Gary: Okay. You hit the nail on the head when you said strategic. The first thing, just kind of an overall of any of my advice, would be to take a strategic viewpoint. Do not, you know, read the forums and the, you know, so-called gurus and experts and take every word that they say as gospel. That would be my . . . if there’s any one great piece of knowledge to impart is keep strategically focused on key words, content and links. So, you know, that is an overall. From digging down into that, I’d say linking in tomorrow’s world, one of the things at SES that they tipped off a little bit, both Matt [inaudible] and some of the other Google as well as Yahoo! were tipping off is that you need to link other than the home page. Home page is great . . .
Monte: But deep link the site.
Gary: You need to be deep linking all over the place. Because they’re going to start patterning and modeling sites like CNN, sites like Yahoo! Do all the links for CNN go to the home page? I don’t think so. I think they’re . . . they have a spattering or smattering throughout the site. That’s going to be critical. And that’s . . . we’re already starting to see that a little bit in Google in some of the testing that we’re doing, is that if you have a site that’s more well-rounded with a link structure, a variety of link text and a variety of where the links go to, that, I’d say, is probably the biggest piece of information from a link standpoint. From a content standpoint, the only secret tip I could give you is that don’t just copy from a news feed, don’t just put a news feed in, like everyone else, with just a standard script, because those pages are going to be pretty much worthless. They’re at least sophisticated enough to know that you’ve got the same block of text as someone else, just rearranged. Not to say that you can’t randomly swizzle a Yahoo! news feed, an MSN news feed, a Google news feed to create your own unique page, which is something that you can certainly do; but just taking Yahoo! news and publishing it from a content standpoint, that’s just taking up storage space and its doing you no good.
Monte: Good. Anything else that’s worth mentioning?
Gary: Ah, from a key . . . . this last point from a key word standpoint, I’d mentioned a little bit about it in our earlier conversation, don’t go after the big terms with, you know, the big competition. If you think you’re going to be ranked #1 for sex in two months, in three months, in three years, you’re barking up the wrong tree.
Monte: Go after “tail.”
Gary: Exactly. [laughs]
Monte: [laughs] No pun intended. Yeah, so hit the tail and hit a niche in the tail, right?
Gary: Exactly. Take a thousand keywords in the tail and get five hits per day on those and you pick up 5,000 hits much easier than going after the #1, you know, the top of the . . . the #1 rated term, where its going to take you much longer. Not that you’re not going to get there and not from a strategic standpoint . . .
Monte: But you’re going to go broke getting there.
Gary: Exactly. Get some income upfront and then go for that strategic #1, you know, over the two or three year time frame.
Monte: Well, Gary, it was great to have you on the show. I really appreciate the insight and you’re wealth of knowledge in the industry and of course, you’ve had a lot of different experience with different corporations that you’ve led and been a part of. What’s the . . . is it too early to give out contact information about your new product and service or should they wait until the thing’s launched or you know, what’s the best way to get a hold of you?
Gary: Probably wait a little bit longer. We’re not ready quite yet for that. They can . . .
Monte: They can go through me and then I’ll be able to refer that when we get lined up with you.
Gary: Absolutely. That would be a great day for everyone.
Monte: Alright. Great, Gary. Well, thanks a lot for being on Domain Masters and I hope to have you back on when we’re ready to launch the new business.
Gary: Very good. Look forward to it.
Monte: Okay, take care.
Gary: Thank you.
Monte: Okay. Well, that was a great show. Sorry it went over a little bit. It’s 8:18, so we went over 18 minutes, but some really good content here tonight and hopefully you all got some great tips from the two different guests that we had on. As you know, we’re really trying on the shows to have at least one domainer and then one industry expert so that you get two sides of the industry all times, so somebody that’s on the domain industry side of some way with a new product, new service, new strategy, new content, things like that and then somebody that’s already in the domain business that’s being very successful with their domain strategy, you know, sharing their wealth of knowledge, their experience, their mistakes and their tricks and tips of being successful and I appreciate all of my guests who have been very open to their strategies and sharing their knowledge. As you know, Domain Masters and Moniker.com, our company, are very focused on sharing knowledge and working with our competitors and working with our partners to strengthen the core foundation of our industry so that everybody learns and is successful. It’s not time to cut people’s legs out and to cut people’s heads off in the competitive market that we’re in but to work together to strengthen the market together. So hopefully, get a lot out of that.
Next week, we’ll have another live show, obviously, on Domain Masters. Some great guests to come and I want everybody to Be the master of your domain and we’ll see you next Wednesday, live on Domain Masters. Take care.
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