Brands Beat Generics

When markets are new they are unproven, thus they often have limited investment targeting them.

That in turn means it can be easy to win in new markets just by virtue of existing.

It wouldn't be hard to rank well creating a blog today about the evolution of the 3D printing industry, or a how to site focused on Arduino or Raspberry Pi devices.

Couple a bit of passion with significant effort & limited competition and winning is quite easy.

Likewise in a small niche geographic market one can easily win with a generic, because the location acts as a market filter which limits competition.

But as markets age and become more proven, capital rushes in, which pushes out most of the generic unbranded players.

Back in 2011 I wrote about how Google had effectively killed the concept of category killer domains through the combination of ad displacement, vertical search & the algorithmic ranking shift moving away from relevancy toward awareness. 2 months before I wrote that post Walgreen Co. acquired Drugstore.com for about $429 million. At the time Drugstore.com was one of the top 10 biggest ecommerce pure plays.

Thursday Walgreens Boots announced it would shut down Drugstore.com & Beauty.com:

The company is still trying to fine tune its e-commerce strategy but clearly wants to focus more of its resources on one main site. “They want to make sure they can invest more of the equity in Walgreens.com,” said Brian Owens, a director at the consultancy Kantar Retail. “Drugstore.com and Beauty.com are distractions.”

Big brands can sometimes get coverage of "meh" content by virtue of being associated with a big brand, but when they buy out pure-play secondary e-commerce sites those often fail to gain traction and get shuttered:

Other retailers have picked up pure-play e-commerce sites, only to shut them down shortly thereafter. Target Corp. last year shuttered ChefsCatalog.com and Cooking.com, less than three years after buying them.

The lack of publishing savvy among most large retailers mean there will be a water cycle of opportunity which keeps re-appearing, however as the web gets more saturated many of these opportunities are going to become increasingly niche options riding new market trends.

If you invest in zero-sum markets there needs to be some point of differentiation to drive switching. There might be opportunity for a cooking.com or a drugstore.com targeting emerging and frontier markets where brands are under-represented online (much like launching Drugstore.com in the US back in 1999), but it is unlikely pure-play ecommerce sites will be able to win in established markets if they use generically descriptive domains which make building brand awareness and perceived differentiation next to impossible.

Target not only shut down cooking.com, but they didn't even bother redirecting the domain name to an associated part of their website.

It is now listed for sale.

Many short & generic domain names are guaranteed to remain in a purgatory status.

  • The price point is typically far too high for a passionate hobbyist to buy them & attempt to turn them into something differentiated.
  • The names are too generic for a bigger company to do much with them as a secondary option
    • the search relevancy & social discovery algorithms are moving away from generic toward brand
    • retailers have to save their best ideas for their main branded site
    • the rise of cross-device tracking + ad retargeting further incentivize them to focus exclusively on a single bigger site
Published: July 31, 2016 by Aaron Wall in domain names

Comments

john andrews
July 31, 2016 - 11:07pm

The category-killer domains that have audience building potential remain quite valuable, although as you note, Big Brands are not in the audience building business.

I hope they sell off the domains, so they can be recycled. However, once Big Brands find themselves re-purchasing the same domains again, they might stop letting them be recycled. That would be a bad move, because obviously the rebuilt business is worth buying...but Big Brands make bad moves all the time.

Definitely not easy to restart on a domain already aftermarket priced in the millions, though. So why not partner?

Why not donate domain to be rebuilt for acquisition, when ripe? Because public companies are not smart enough to compete with themselves.

iwebsitez.com
August 1, 2016 - 1:22pm

I agree, SEO is more a part of brand building and an essential strategy going forward to get your website found than ever before. The problem is, particularly in the UK, getting the smaller clients to realise how essential SEO actually is. Even e-commerce SEO for small-medium sized businesses is getting nichy, which I guess is a good thing in a way as it makes some keywords easier to rank. But we will have to wait and see what happens to Wallgreens sites to form an opinion on what their strategy going forward is with these domains.

Add new comment

(If you're a human, don't change the following field)
Your first name.
(If you're a human, don't change the following field)
Your first name.
(If you're a human, don't change the following field)
Your first name.

Gain a Competitive Advantage Today

Your top competitors have been investing into their marketing strategy for years.

Now you can know exactly where they rank, pick off their best keywords, and track new opportunities as they emerge.

Explore the ranking profile of your competitors in Google and Bing today using SEMrush.

Enter a competing URL below to quickly gain access to their organic & paid search performance history - for free.

See where they rank & beat them!

  • Comprehensive competitive data: research performance across organic search, AdWords, Bing ads, video, display ads, and more.
  • Compare Across Channels: use someone's AdWords strategy to drive your SEO growth, or use their SEO strategy to invest in paid search.
  • Global footprint: Tracks Google results for 120+ million keywords in many languages across 28 markets
  • Historical data: since 2009, before Panda and Penguin existed, so you can look for historical penalties and other potential ranking issues.
  • Risk-free: Free trial & low price.
Your competitors, are researching your site

Find New Opportunities Today