Two stories about different ad networks today:

1) http://blogs.zdnet.com/Google/?m=200702

Summary: Yahoo Panama; a 9% increase in click thrus for the week ending February 18th… In the week ending February 4th, paid search clicks made up 10.1% of the clicks on Yahoo search results pages. That percentage increased to 10.6% in the week ending February 11th and to 11.1% in the week ending February 18th.

2) http://www.ccnmatthews.com/news/releases/show.jsp?action=showRelease&searchText=false&showText=all&actionFor=637795

Summary:   "…said Adam Hadley, e-Marketing Manager, World Vision Canada. "Since we began using Microsoft adCenter two months ago, our conversion rates have been better with adCenter than any other major search engine, increasing to 6.9 per cent conversions with adCenter in comparison to 0.6 to 1.1 per cent conversions with Google."

This is a trend, and that ‘trend is our friend’…  Advertisers and keyword marketplaces trying to do more with the raw traffic that enters their network.  I asked a colleague who works at Yahoo what the biggest problem is with the domain channel and this person said:  "Lack of inventory.  There just isn’t enough traffic to satiate demand and that lack of ability to easily scale (create more type-in) inventory is a problem because it limits growth potential in the market".  That was an unusually frank, accurate answer. In paid search, more relevant inventory is a good thing.  The laws of supply and demand seem to suspend as high quality targeted traffic leads to more sales, which drives demand for bids from more bidders and so on…

The two independent examples above illustrate that the salad days may not be over yet. Most domainers today only convert 10% to 25% of their type-in visits into bidded PPC clicks .  That just shows that there is between 4 and 10 times the present inventory available to sell. The challenge is ‘better targeting’ to turn those type-in visits into bidded-clicks. Domainers are in the best position to pull it off because we control our inventory like a no search engine can and we have relatively high unique to impression counts (indicating alot more ‘reach’ than your average search engine).

Years ago I said: "Type-in visitors are effectively ‘searching’ in their browser’s address bar…"  That is still true today.  The challenge in 2007 is figuring out what satisfies those visitors and proving to advertisers that we are justified in charging them ‘something’ each time we display (promote) their relevant product or brand.