Minisites were the hottest thing for domainers for the past year or two. Everyone seemed to be jumping on the boat offering them for prices averaging low-mid $xxx. How come nobody was ever preaching about their success with them? If they were delivering value to domainers wouldn't you expect entire portfolios transformed into these silver bullets that would save domainers? That simply didn't happen, the only people making money were/are the ones offering the service.
Let me pause a moment and define what a minisite is and what it isn't. A minisite is a website created with a few pages of content in a one off event. The most common offer is website with 5 pages of content (and they add things like a custom design). If one is using this as a starting pad to add more articles and features then it isn't a minisite. If you are constantly link building and adding value externally this isn't a simple minisite. Working actively on a website isn't a minisite for this definition, if you are putting effort in constantly either internally or externally (perhaps both) then you are doing real development. Work=development.
There are a few problems with the minisite model:
- Earnings = Traffic * CTR * EPC
- Cost
- Real Development
Earnings = Traffic * CTR * EPC
The math behind minisites simply doesn't make sense. Let me explain the title: your earnings are a result of the amount of traffic you bring in, the click through rate of that traffic and the amount you earn for each click. Now, if we compare minisites to PPC (their competitor - nobody is going from real development backwards to minisites) we can understand the problem at the core.
I am going to use some numbers from my personal experience: portfolio average of around 25% CTR on PPC. Good names can see 100 or even higher CTR depending on how targeted they are. I believe in most cases domain parking (if you have a decent contract) receives a higher EPC, if someone wants to estimate percentages please feel free to comment.
For developed sites mini or otherwise the CTR may vary wildly. In my experience if I can get 5% I am a very happy man. In reality I often see around 2-3%. If anyone cares to share their own, again, comment.
In the model we will assume equal traffic at the start (type in) so traffic will simply be a variable T.
EPC we will use a base number of 1.00.
PPC - Even with AdSense
Earnings = T * .25 * 1.00 = .25T
PPC - 20% Higher than AdSense
Earnings = T * .25 * 1.20 = .30T
PPC - 40% Higher than AdSense
Earnings = T * .25 * 1.40 = .35T
PPC - 50% CTR, 20% Higher than AdSense
Earnings = T * .50 * 1.40 = .70T
Minisites - 2% CTR
Earnings = T * .02 * 1.00 = .02T
Minisites - 5% CTR
Earnings = T * .05 * 1.00 = .05T
Minisites - 10% CTR (for fun!)
Earnings = T * .02 * 1.00 = .10T
Ok. So now you've seen the math, what does it mean?
Well, for our base PPC assumption(25%+equal EPC) we get .25T and it goes up to .70T with a 50% CTR and 20% higher EPC. If we compare this to minisites we see the range from .02T to .10T. What does this mean? If we compare lowest assumptions we get .02T to .25T which means you would need 12.5 times as much traffic from a minisite clicking at 2% with even adsense earnings. If compare at the higher end we see .10T to .70T which is a 7X increase in traffic required to break even with PPC. (For fun if you compare an average to a good PPC earner .05 to .70 which is a 14x increase)
For minisites to compete with good PPC earners the amount of traffic it must make up is often a huge multiple (imagine if you're getting near 100% CTR!). When Rick Schwartz talked about his experience with minisites he wrote "In EVERY case, traffic did not grow. In EVERY case traffic remained the same at BEST and mostly declined. In EVERY case I made less money than PPC." Is it any wonder why when you see the math behind minisites? I cannot explain the decrease in traffic, but his final statement brings it home.
Cost
The next problem is cost. A few hundred dollars per minisite is simply far too high a price for too little value. If we run the math of setting it up yourself assuming you have at least the knowledge to use some freelancers: a logo/banner will run you 10-50$. A wordpress install with modules and a logo should run you 10-50$. Article writing can be done for 10$ per article for 500 word articles. So 50$ in content costs. If you really look for the cheap guys to setup the most basic stuff (logo/wordpress arent complicated) you're looking at $70 to get a minisite setup. Even that is too expensive in my mind, in my experience with PLR world much of it can be automated. Automate the wordpress install and re-write the content. Now we're looking at $20-30 to get a minisite setup. There is no real reason to do most things manually in this sort of development and it simply makes it too cost prohibitive. The PLR world has figured out how to get around many of these hurdles, bundling content/design and automation seems to be one effective way. However, these guys have to actually work and build value to their sites... pushing them over to the real development category.
Real Development
is blood sweat and tears. Nearly all websites (there are few exceptions) earnings are a reflection of hard work and time/money invested. I can't think of many cases where a 'write it and they will come' scenario plays out where the writing is a one-off event. If you are planning to do development it isn't a stick 1 foot in and try out the waters deal, it's a boolean proposition: are you going to develop or not? Minisites, as I have defined them, are a gray trying to fit in a black and white world. They simply fail.
It's not all bad news, minisites can be converted from minisites to into real developed sites. How? Effort. As I talked about before, start doing SEO work on them. Start adding more content on a regular basis. The question becomes - are you picking the right place to start though if you're planning on developing your valuable names?
Conclusion
The ONLY type of domains minisites make sense for is low traffic, low earners which can only make more and the barriers are low. I've made a lot more from hand registered keyword domains using minisites with some automation+seo(even this can be semi automated). If there is ever going to be a development offer for domainers that can replace parking it lies in smart automation (cheap human labor and complete automation) and scalability. Until then, these half measures like minisites will only result in failures and wasted money.
Think I am wrong? Something wrong with what I've said? Want to actually discuss the potential work-arounds/options/ideas? Feel free to comment or contact me.
***Disclaimer: I do encourage real development and strongly believe in the value of it for even your best domains, but it has to be done with specific purpose, time and money. That sort of investment isn't suitable for a parking replacement.***