In those days, learning resources were not nearly as plentiful then as they are now. There were info-products even back then but it was nothing like the smorgasbord available today. My education was largely of the trial-and-error type, with a heavy emphasis on the error part.

One of my first attempts at a profitable Website was a travel information resource called AllFourCorners.com (a currently undeveloped domain I still own).  I compiled hundreds of phone numbers and links for airlines, car rental agencies, cruise lines, hotel chains, and other travel-related companies. Basically, my goal was to create an exhaustive online travel Rolodex.

Yikes... the project that wasted a lot of my time in 2004. It looked like crap and made almost nothing.

I had affiliate accounts with every major booking site (Expedia, Orbitz, etc.) so I could display banner ads. If there was a company that was on my list that had an affiliate program, I was linking to them with an affiliate link. How could I lose?

Stupid Mistake #1 – Having a Flawed Monetization Plan

I was in such a rush to get my site up and running that I didn’t put too much thought into my monetization plan. I knew I was going to use affiliate banners and links, but I didn’t think about how effectively it would relate to the content I was providing. Since my content consisted primarily of hard data like phone numbers and Website links, most of my visitors were looking for specific information. They weren’t in the mood to browse around and click on banners so my bounce rate sucked.

I began using Google Adwords to drive traffic to the site (it was still relatively cheap back then), but I was far too optimistic about the commissions that would be generated. In short, my “Adwords arbitrage” plan was inherently flawed and I wasted hundreds of dollars on traffic that didn’t convert.

What I should have done is looked to the long term and tried to establish my site’s position in the organic search results to get free, highly-targeted traffic. I wasn’t making nearly enough per visitor to even consider paying for traffic, especially pay-per-click ads.

Stupid Mistake #2 – Not Testing the Waters First

I spent hours and hours compiling the data for my site before I went “live.” I should have implemented a single section of the site first to see if that was profitable. If the test was successful I could have added on more sections one by one; if the test failed I could have corrected my plan or, in the worst case, cut my losses early.

I had it in my head that there was no point in releasing a “skinny” site with only a few pages of content. I wasted my time trying to create a huge site before testing and perfecting my plan. Time spent testing is seldom wasted.  If I had tested the waters first it would have given me an early indication that changes needed to be made to my plan.

Stupid Mistake #3 – Buying Junk Traffic

The way I figured, the more traffic I could drive to my site the more I stood to make. Under normal circumstances that is fairly sound logic, but it depends entirely on the kind of visitors you’re getting. Are they people who were looking specifically for the information you provide or are they visiting your site because of some incentive?

I paid a traffic service good money to have thousands of visitors come to my site, but I might as well have just flushed my cash down the toilet. I wish I still knew exactly how much I paid and how much I made, but I can tell you that the former was at least ten times greater than the latter.

I also spent a fair amount of time working “traffic exchanges,” where you earn credits for viewing other people’s Websites. You can then use those credits to have people view your Website. What a waste of time!

It was all junk traffic. The people who were visiting my site could care less about what it had to offer — all they cared about what was in it for them. Of course, I now realize that most of the hits I was getting weren’t even from humans at all but more likely from automated bots.

Stupid Mistake #4 – Using Untargeted Ads

A few of the banner ads I was showing on my site had nothing to do with travel. At one point, my most prominent ad was for financial investments or something like that. Why did I choose something so outside of my niche? Greed and stupidity. I saw on Commission Junction that the EPC (Earnings Per Click) for this particular offer was significantly higher than the typical offers in the travel niche, so I went for the money.

Guess what? Most people looking for travel information couldn’t give one whit about financial investments. My featured ad got few clicks and zero conversions. If you aren’t targeting your ads to your site’s niche and demographic, you’ll probably suffer the same fate.

Stupid Mistake #5 – Giving Up Too Easily

While I don’t think the general concept behind my travel site was entirely bad, I obviously made a lot of mistakes in its implementation. But perhaps my biggest mistake was not to keep working on it and trying different things. Because the site was not an instant moneymaker, I quickly lost interest and abandoned the whole project. Who knows… if I had continued to grow that site seven years ago, it might be a top travel resource today.

No matter how ambitious your project may be, give it a fair chance to succeed. Plan to stay in it for the long haul because it often takes time for an idea to start gaining traction and achieving the level of success that you desire. Don’t give up as easily as I did.

The One Thing I Did Right

The information my site provided (company phone numbers and links) was static so it seldom had to be updated, but eventually I would have had to add more dynamic content (and a major redesign). That would have been okay with me because I have a passion for travel and wouldn’t easily lose interest of the topic. I believe that if you’re planning on building a site of any significance, you had better pick a niche that you are passionate about or you’ll eventually get bored with it.

So don’t make the same mistakes I did. My advice is to:

• Know ahead of time exactly how your site will make money.
• Test your concept on a small scale before committing too much time.
• Make sure your traffic is targeted and is looking specifically for the information you provide.
• Target your ads to your niche.
• Don’t abandon your ideas before they have time to take hold.

In April 2010, Google frontmen Amit Singhal and Matt Cutts posted an item on the Webmaster Central Blog stating that slow-loading sites may be penalized by Google’s ranking algorithm. This change supposedly affected less than 1% of all search queries, and only English queries at that. But pay attention to their final words in that post:

We encourage you to start looking at your site’s speed… not only to improve your ranking in search engines, but also to improve everyone’s experience on the Internet.

Okay, so we know for sure that site load speed is now a factor in ranking, though not as important as something like page relevance. Whether it’s going to become more of a factor over the course of time is unclear.

Now let’s flash forward more than a year to July 28, 2011, when Google announced a new product called “Page Speed Service”. Basically, the service acts as a middleman between your site and the user. You point your DNS to Google’s server (rather than to your own Web host) and it “fetches content from your servers, rewrites your pages by applying Web performance best practices, and serves them to end users via Google’s servers across the globe.” The result is a faster-loading site, sometimes 25-60% faster than normal.

Sounds great, but if you consider the fact that page load time is now being considered as a ranking factor you can see the potential problem. Unless you are using Google’s service, you’re going to be at a disadvantage over those sites that are using Page Speed, which are likely to rank better by Google’s algorithm.

Right now, the Page Speed Service is in beta testing and you can apply to join the program for free. But it won’t be free forever. According to spokesman Ram Ramani, ”Pricing will be competitive, and details will be made available later.”

If load time becomes a major ranking factor by the dominant search engine and you have to pay the same company for a service that speeds up load times, expect yet another Google antitrust suit.

RepairClinic.com, Inc., an online retailer of replacement parts for household appliances and holder of the trademarks for “RepairClinic” and “RepairClinic.com”, filed a complaint with the WIPO in January after their attempts to shut down the site RepairClinc.com failed. The WICO ruled that Spoofy acted in bad faith and ownership of the domain was given to the plaintiff. No damages were sought or awarded in the case.

In the end, it cost RepairClinic.com $7,000 in attorney and filing fees to win one of hundreds of possible typo domains based on their trademark. They won the battle but may ultimately lose the war, since sites like RepairClnic.com appear to still be going strong. Unless a company has very deep pockets, it’s virtually impossible for them to enforce typosquatting in its many forms.

That doesn’t mean you shouldn’t be wary of registering typo domains based on trademarked terms, especially when the trademark holder is known to aggressively pursue violators (like sue-happy eBay). They may come after you, and they may seek compensatory or punitive damages — especially if your site is actively diverting visitors to their competitors.

A recent study of 100 million anonymous users and 1 billion ad impressions has shown that only a small percentage of people actually click on ads and those that do are primarily low-income Internet newbies. It also found that 99% of stable cookies showed “no evidence of clicks,” indicating that only a small percentage of online users actually click on ads.

Other interesting findings from the study include:

• Users who have clicked ads in the past are twice as likely to click again in the future
• Online gamers click 43% more than non-gamers
• Users of mobile devices click 123% more often
• Users with annual incomes of less than $40K click 30% more often than those with incomes over $200K
• Users with “fair” credit scores click 20% more than those with “excellent” credit scores
• Late adopters of new technology (newbies)  clicked 50% more often than early adopters (tech weenies)
• Users who frequently buy online click 65% less than those who are “economizing”

Are these the people you’re targeting with your ad campaigns? Low-income newbies with crappy credit who like to click on ads but don’t buy much? I didn’t think so.

It’s plain that a lot of ad clicks are purely unintentional.  The same study found that 20% of the ads that did show any activity were clicked twice in one impression.  The higher percentage of mobile ad CTRs also indicates to me that the size of the screen may cause inadvertent clicks.  It’s likely the gamers are not clicking on purpose, either.

The last ad that I can remember clicking on was probably a banner ad at the top of the IMDb home page.  I was trying to get my cursor into the search box, but once the large image finally loaded it moved the search box down and my click registered on the ad instead.  My guess is that banner advertisers on IMDb get incredible CTRs but terrible conversions.

Jeremy Stanley, VP of Analytics for Collective (the group who conducted the study), suggests that marketers should not only disregard CTR as a performance metric, they should stop tracking it altogether.  He cautions that campaigns optimized to perform on CTR may actually be destroying brand value.

One of the biggest fallacies is that in order to succeed, you need a unique idea and be first to market. The reality is that ideas are cheap, and any great concept you may come up with has either already been done or is currently being developed by several competitors. If you think otherwise, either your idea isn’t so great after all or you haven’t done the proper research.

Long-term success rarely comes from being a pioneer and the “first mover advantage” is not all it’s cracked up to be. When the Internet started to become mainstream about 15 years ago, a lot of people used Netscape for their Web browsing, Eudora for their e-mail, and Altavista for their searching. Do you use any of those tools now?

The biggest factor for achieving success is to have what Adams calls execution intelligence. That means knowing what your customers really want, being able to effectively handle growth, knowing how to handle stiff competition, adapting to changes in the market, having the appropriate skills, and knowing how to lead employees.

So how does all of this translate into the world Internet marketers live in, where the entire business is typically a one-man (or one-woman) shop? The scale may be smaller, but the general lesson still applies. In order to succeed, you must have execution intelligence.

Know what your customers want. By doing research in the way of surveys and polls, find out where your potential customers are experiencing pain and design your solution to relieve that pain. You may think you already know your market, but you could be in for some surprises.

Be able to effectively handle growth. Growth is good, but too much growth too fast can be a serious problem. If you’re unable to properly support your customers and quickly respond to their issues, your reputation will suffer. Some IM “gurus” have learned this lesson the hard way by offering personal coaching services to more people than they could possibly handle.

Know how to handle competition. If your product is a success, you’re bound to have imitators. Stay one step ahead of them by constantly improving your product and making your offer even better.

Adapt to changes in the market. Follow and anticipate trends. Yesterday, e-books were the norm. Today, video is all the rage. Tomorrow, it will be something new. Be ready for it.

Have the appropriate skills. It’s hard being a jack of all trades. Know what your strengths are and outsource everything else.

Know how to lead employees. If you are outsourcing some tasks, you must know how to get the best results from your “team”. Choose your people carefully, be crystal clear about what you need them to do, and keep them happy and motivated by paying promptly and occasionally rewarding them for excellent work.

Don’t let competition stop you from enjoying success. If you wait until you find a completely untapped market, you’ll search your way right into the poorhouse. Always remember that you don’t have to be first, you just have to be better.

Commercial intent refers to the probability that a given keyword phrase would be used by someone looking to make a purchase. In other words, if a person was to do an online search for that keyword phrase, what would be the likelihood that they are ready to buy right now? How far along are they in the sales process?

Consider the following keyword phrase:  anti virus software. This phrase has a fairly high CI because there is a very good chance that anyone doing a search for “anti virus software” is intending to make a purchase. It’s also possible that they are still just researching their options and do not intend on buying right away.

Now let’s change the phrase slightly and add the word “free”:  free anti virus software. While the searcher may still be interested in spending money should the right offer be presented to him, the commercial intent is lower. There is still a decent chance of a sale being made, however, because that the person likely has an immediate problem that needs to be solved and may be willing to purchase software if a suitable free solution is not found. Or they may try a free trial and later upgrade to the full version.

Next, we’ll try another variation on the phrase:  mcafee anti virus software. Now the searcher is looking for a particular brand name. They are probably past the research stage and have selected the package they would like to buy. Therefore, the CI for this keyword phrase is extremely high.

You should always consider commercial intent when researching keywords to target or domain names to register. But how can you tell what this number is?

Luckily, Microsoft’s adCenter Labs has made available a very useful tool for detecting commercial intent of keywords. To use it, just enter in your keyword phrase, select the Query radio button, and click on Go.

Microsoft's free Commercial Intent tool

You’ll be given a decimal number from 0 to 1. The higher the number, the higher the commercial intent for the given keywords.

Like any automated tool, its accuracy rate is open for debate. But it can still give you a good general idea of what your keywords’ CI might be.

Let’s play a little game…

I’m going to list four domain names that have recently sold on Sedo. Try to put them in order by their sale price, from lowest to highest. For extra credit, try to guess how much each one was worth.

Note that none of them show any backlinks in Google, and they are all PR 0. I’ve provided the approximate domain age for each, since they vary.

Ready? Okay, here they are…

• DelrayBeachLawyers.com
  Age: 5 years
• OnlineCarpets.com
  Age: 10 years
• They.net
  Age: 10 years
• ChildrensBikes.com
  Age: 9 years

Before I give you the answers, let me talk a little about how domains are often valued.

People buy domains for two reasons:  to flip and to develop.

Flippers (and automated appraisal sites) tend to value a domain based primarily on factors such as TLD, character length, number of words, age, search volume, backlinks, PageRank, and so on. While these are all very important points to consider, they represent only one side of the coin.

Developers see the other side of the coin. They tend to value a domain based mostly on what I like to call its monetization potential. They envision a Website based on the domain and have some concept of the kinds of revenues that site will generate. They may be planning on keeping the site themselves as an income-producing asset or flipping it themselves.

Let’s take another look at those four domains from a developer’s perspective…

• DelrayBeachLawyers.com
  Here’s a fairly long three-word domain that is very narrow in its scope. Delray Beach (in Florida) is a small community of only about 60,000 people, with a median household income that is close to the national average. Since it’s targeting the lucrative legal help niche, it has decent monetization potential as a lead-generating directory of local attorneys or as a site for a single law firm.
• OnlineCarpets.com
  This two-word domain is quite obvious as to its likely use as a Website where people can buy carpet. Since carpets are typically a high-ticket item ($1,000+), the monetization potential is quite good. But how many people buy carpets online?
• They.net
  Domain names don’t get much shorter than this. It’s a dictionary word, but the TLD is a second-best .NET instead of the greatly preferred .COM. It’s difficult to envision the type of content that this Website might contain, so its monetization potential is low.
• ChildrensBikes.com
  The use is obvious: an online bicycle shop. Many kid’s bikes sell in the $100-300 range or more and there are lots of bikes sold every year, but this is the type of item that is usually purchased offline. Monetization potential is fairly good, but not great.

An experienced flipper looks at the total picture and evaluates a domain based on its technical aspects as well as its monetization potential. The fact is that if the monetization potential is there, little else matters to a developer. Things like PageRank and backlinks are nice perks that can further increase the value of the domain, but they are not the primary considerations for the typical buyer.

Are you ready for the answers to my little test? Here they are:

• They.net sold for $1,000.
• DelrayBeachLawyers.com sold for $2,500.
• ChildrensBikes.com sold for $2,550.
• OnlineCarpets.com sold for $7,150.

How did you do? And how close were your own estimates?

If your numbers were way off, don’t feel bad. The automated appraisal tool Estibot didn’t do very well either with estimated values of $5,200, $0, $1,700, and $610 for the above list of domains, respectively. But that’s a topic for another day.

In the end, a domain name is only worth whatever someone is willing to pay for it. By thinking like a developer and considering a domain’s monetization potential you’ll be able to more accurately estimate what it might be worth to the right buyer.