With over 97 percent of Google’s $33.3 billion in revenue over the past year coming from online advertising, the search engine giant has been wildly successful in selling pay-per-click advertising on the Internet, making over $54 per click for top-ranked keywords.

© 2011 WordStream, Inc.
The question for domain name investors and entrepreneurs is: Are you focusing your investment and development efforts in the most lucrative areas?
As evidenced in the DomainSherpa interview with Christian Walter, domain names play a significant role in ranking well in searches for specific keyword phrases. Domain name investors and entrepreneurs should buy domain names focused on areas making $20, $30 or $54 per click.
High Lifetime Customer Value
Among the 20 most expensive keyword categories identified in the Wordstream study, the common factor is the lifetime value of a customer in each industry.
For example, the lifetime value of a legal client – who over the years may require legal advice in estate planning, intellectual property and litigation – can be quite high. As such, legal firms can afford to put significant resources into recruiting new customers, which translates into higher costs per click (CPCs) for related search terms. “Attorney,” “lawyer” and “claim” ranked at No. 4, No. 6 and No. 10, respectively.
Tie Customer Value to Your Passion
Starting a business doing something you enjoy and believe in – not just for the sake of earning money – will provide the greatest opportunity for satisfaction and probably some measure of financial success. When you enjoy doing something, it does not feel like “work,” and you will find yourself spending much more time on it.
To supercharge your financial results, try connecting your passion with an area of high lifetime customer value. This will allow you to do something you enjoy and earn more per customer acquisition.
For example, let’s say you love bobblehead toys and can make $0.50 per toy in profit. You may enjoy modest financial success but will have a hard time scaling your business into a multi-million dollar enterprise unless you create partnerships, have the capital to invest in marketing, or luck into media coverage.
Alternatively, let’s say you are a strong proponent in banking cord blood because your brother was saved by a stem cell-related medical procedure. Starting a website that reviews and compares cord blood banks could be a way to combine your passion with a revenue generating source.
Target Keyword Phrases in Domain Names
Once you have identified both an area that you are passionate about and a keyword category with a high lifetime customer value, the next step is to focus on your keyword and keyword phrases.
Domain name investors and entrepreneurs should target specific domain names composed of three to five words, making sure highly relevant phrases are used within the domain name. In our cord blood example, a good domain name might be “cordbloodbanksinseattle.com.” (Although single keywords or phrases composed of two keywords are desirable, it is unlikely that they are available to be hand registered.)
To help you find worthwhile domain names composed of three to five words, visit the Google AdWords Keyword Tool. Following the procedure at How To Determine Monthly Domain Name Search Volume will allow you to type in a keyword category from the infographic above and find real keyword phrases that people are searching.
Your best bet is to find keyword phrases that have over 1,000 local monthly exact-match searches with a CPC of greater than $1. If you can find 1,000 exact-match searches on a phrase that has a cost per click of $50, all the better. Once you have found a desirable phrase, determine if the domain name is registered in the .com TLD and, if available, purchase it at your preferred domain name registrar.
Optimize Website Landing Pages
If you are driving potential customers to your website, you must be sure to have created a landing page that “converts” – that is, it generates a lead by having a visitor fill out a form, causes a visitor to click on an advertisement, and so on. While the average AdWords conversion rate across all categories is approximately 2 percent, conversion rates from clicks on landing pages often range from 20 to 30 percent.
When targeting the most expensive keyword categories in Google AdWords, you will find that competition for your selected keywords is fierce. Optimization of your landing page therefore becomes critical to realize the highest return on investment. In order to convert visitors, you will need to offer a product or service well aligned with your domain name and keyword search phrase.
Turn Leads into Revenue
Perhaps running a business that provides a product or service directly to consumers is not your cup of tea. In that case, you may instead want to take your leads and sell them to someone else who can use them – a business that already has a product or service to offer the leads, or an intermediary lead-generation company that will buy your leads at wholesale value and resell them at retail.
In the DomainSherpa interview with founder and CEO of Legal Brand Marketing, Braden Pollock acknowledged that he not only generates leads through his own network of DUI-attorney websites, but also buys leads from other sources as a supplement for his attorney customers.
There are number of companies that will purchase leads from suppliers, including Leads.com, LeadPoint.com, Reply.com, ProLeadX.com and LeadPile.com. By reading the blogs and marketing newsletters of lead-generation marketplaces like those, you can often glean additional information about the value of leads, niches of high value and tips for improving conversion rates.
Updated for 2012: Most Expensive Google AdWords Keywords
The most expensive Google AdWords keywords have been updated for 2012 by Fetch123.com and can be seen in the infographic below.

© 2012 Fetch123.com
Conclusion
By using online tools and studying how advertising dollars are spent at Google, entrepreneurs and domain name investors can select and optimize their content, products, and services for maximum value.
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Great Article Aishwar,
However, graphs posted are out of dated. CPC drops over years due to content network growth. The keywords in the graphs woudn’t pay as much as they say, if you put them in the AdWords Targeting Tool.
But it does give you a good idea on what’s going on.
Check out these words:
“Drunk Driving” pays $96
“DUI Defense” $27.95
I wounder what the if the domain names that match these keyword phrases reflect the value of the revenue these keywords generate? My guess is they would be worth a lot of money either way!
Is it good idea to buy domain names containing “insurance” in them and then park them for revenue or build a web site is better?
Aishwar- liked the article and realized that in the highest paying industry that im missing the boat on a couple hundred sites all health insurance related and not getting monetized or optimized properly. If you have affinity and experience in this niche would like to chat and explore possibilities. [email protected]
Lance
Every single month I hear from people who are throwing cash at AdWords, and have no idea if it is actually making them any money. They only way to properly track conversion rates is by performing a good Google analytics setup, and monitoring it daily…or out source the work.
Adwords can be a total money pit if you do not know what you are doing.
As always, excellent article. I love the inclusion of the Wordstream doc! Keyword chasing is a hallmark of the industry but focusing the efforts through development and quality lead generation is the future of keyword rich domain investment.
Thank you for your comment Matt.
I am not positive whether development and advertising/lead generation is the future or not, but I can tell you that it will continue to grow to become more of an equal with buying/selling domain names (flipping).
Elliot Silver says that while he currently has a majority of his income coming from flipping, he prefers for his income to be more balanced with about 50% coming from flipping with the remainder coming from his developed websites. I believe that is a smart choice.
Thought Id update to this article having come across it again with a site to reference which is at HealthInsuranceDomainNames.com
…Pretty spot on whether health insurance or other insurance related, but with heath care reform coming in mandatory this year, could see a real burst in sales, or in this case joint ventures like RS.
Ive known for a good while now how to get the search volume for a particular key word using the google keywords external tool. However I’ve seen a recent trend of sites offering actual traffic stats of expired or expiring domains. Dynadot offers this, as do a few of the drop analytics companies out there.
I’m curious how do they obtain this information? Does this have anything to do with the privacy checkboxes on google analytics?
I don’t think that the data has anything to do with Google sharing the information. I believe they follow their privacy guidelines, and you should go and read those if you have questions.
Some companies scrape the Google AdWords Keyword Tool for statistics, average CPC, etc. As a result, their data is outdated. Since Google now owns about 60-70% of the search market around the world, they are a good proxy for all searches being completed. But this is not always the case, and on some specialized sites you could pay more or less.
I would ask Dynadot how they obtain their data and how often it is refreshed. They should be able to answer at least the second question honestly.
Be careful about outdated data. I’ve been a “gotcha” in the past, relying on outdated data…even from Google saying that the average CPC is, say $5, but then not finding any advertisers when I do a search for the keyword phrase. Be cautious of all data, and check your assumptions before investing.
Good article Aishwar! Most people can’t afford the big generic domain names but could potentially buy the geo version which I think is the way to go… Cheaper and far easier to monetize.
Peter in Miami
That is very true. If you look back to the interview that Michael Cyger did with Braden Pollock, you will see that:
1. Find a lucrative niche from the list above (Braden’s was DUI attorneys, a subset of “#4 Attorney”)
2. Go for the geo.
As Michael wrote up in his second take-away bullet:
Advertising for the search phrase “DUI attorney” has an average cost per click (CPC) of $43 on Google AdWords. While that seems high, even more rewarding search phrases — such as “Houston DUI attorney” (average CPC of $80) and “DUI attorney Phoenix” (average CPC of $99) — can often be found using the Google AdWords Keyword Tool. Whatever your niche, determine if there are keywords more lucrative than your main search phrase and optimize your website for those as well.
Good input. Thanks for your comment!
This is why state insurance domain names or geo insurance names are hitting well over 6 figures. Car insurance clicks go for 30 or so a click. Simple math tells everyone that insurance domain names well be worth more than any sector of domain names. That chart does not lie.:)
Exactly DF. I see some of my friends buying domain names on the drop lists that have no possibility of making good money with ads or in lead generation and I shudder. They need to instead not get caught up in the hype of drop lists and focus instead on the domain names that cover industries that pay very well for advertisements and leads.
Thank you for your comment.
Hi Aish,
Great article! I like the way you focused the content (which I’ve read at other sites) for the domainer community. Great writing and links.
Astrid
Thank you Astrid. It is much appreciated. :)