You may have heard the term “premium domain” before but what really is a premium domain name?
Domain names are all one-of-a-kind and unique but really, only about 0.1% of all registered domain names are actually premium domain names. An even smaller percentage are elite, with the majority being considered good or valued at registration cost at best. Since there are many factors to “rate” a domain name, each one can be subjective from person to person or based on other things associated with a specific domain. Let’s take a look at some things that I think should qualify a domain name as premium.
There are over 342 million registered domain names as of Q3 2018 according to domain registry Verisign Inc. Source .com domain names account for 137 million of those domain names, followed by country code (ccTLD) domain names .cn with 22 million, .tk 21 million, .de 16 million and the .net TLD rounding out the top five with 14 million.
The TLD of the domain name plays a factor, with .com domain names mainly being the most coveted TLD (top level domain) on a global scale. In general, .com domain names will hold the highest value and help to qualify a domain as premium.
Keyword popularity is a very important factor in the valuation of a domain name. The more consistent the popularity of the term, the higher the value and likely hood of gaining premium domain status. The popularity is measured by search engine metrics, domain names registered that contain the term and keyword density on all websites. They keyword popularity can be split up by category defining, exact match and long tail. Many category defining, popular keyword domain names actually hold the elite status, over premium. Insurance.com would be an elite domain name for an example, while Insure.com would be more likely defined as premium.
Category/Industry. The category or industry the domain name relates to actually play’s a factor in its valuation. For an example, the insurance, investment, travel and health care industries are often ones that out rank others due to the amount of advertising and brand positioning taking place within it. This doesn’t always directly relate to “premium” status of a specific domain but can result in a premium price. Owning a premium domain name in these categories can raise a “premium” domain name to “elite” status.
Length of the domain name. In general, length is always going to be a key factor but using statics based on the highest domain name sales, shorter is better. How short? Using Uniregistry Brokerage sales data from 2016-2018, 5.8 characters was the average length of domains that sold for $100,000 or higher. The average character length of domains that sold for $10,000-$99,999 was 8 and for $1,000-$9,999 the average character length was about 9.
Use/purpose of the domain. Domain names positioned as a company’s main brand name are always going to be the highest of any reported domain name sales. These are often premium domains. They are the most important to a company and often require the highest investment. Brand consistency, trust and making an impression are all key to online survival and this often relates to the use of a premium domain name.
Type/quantity. Domain names are often categorized. These are broken down by “type” of domain and will include: Acronyms, one word, two word, three word and other. 1-3 character/numeric domain names are popular. 2 and 3 letter domain names are vastly popular due to the high demand and use of acronyms by companies around the world. Rare is another factor. There are only 676, 2 letter domain names in each TLD, 17,676 three letter combinations. All 2 letter .com domain names hold the premium status due to rarity, are easy to remember, visually appealing and the quantity of corporations that use 2 letter acronyms for an example. 2 letter .com domain names raise to elite status by being an English word, category defining and repeating. Short, generic, English dictionary word .com domain names often gain the premium domain name badge and are highly sought after.
Demand. High demand and limited inventory, creates a premium product. Since domain names are one of a kind, demand is a big factor for premium status of a domain name. The more companies that are branded as a specific term, the higher the demand will be to own “the best” domain name. Premium exact match domain names will consistently have high demand.
History. If a domain name is established and may already have good search engine indexing, quality inbound links and more, this can certainly add value to a domain name but doesn’t always increase the domain names specific status as premium. If you remove the extras, does the domain itself hold the demand, popularity, length and type that matter?
In general, domain names are very unique and many things play a factor if a domain name is good, premium or even elite by itself. Many “good” domains are likely called “premium” by some and not by others. “Want” can be a huge driving force of a purchase price that may reflect premium pricing but still keep the domain from the premium status by most. Without demand, the reality of achieving premium pricing on a good domain is low. Premium domain names naturally will have demand and are liquid assets.
Paying a premium price for a domain name should be justified if the domain name meets at least several of the above mentioned factors. TLD (likely .com), demand, keyword popularity and length are the most important factors of a truly worthy domain name to hold the premium badge name.
The term “premium domain” is very loosely used but the reality is, very few truly hold the premium domain badge. We hope this guide helps you in your decision process and cuts down some noise on the “premium” domain name status often given to domain names that rarely fit the category.
Need some examples? Seeing is believing and premium domain names should stand out instantly from the rest. AA.com is an elite domain name, AmericanAirlinesInc.com is not premium nor even “good”. Tesla.com is a premium domain name, TeslaMotors.com is not. Amazon.com is a premium domain name, AmazonWebStore.net is not. Rate.com is a premium domain name, GuaranteedRate.com is not. Super.com is a premium domain name, SuperInvestments.com is not. BJS.com is a premium domain name, BJSWholesaleClub.org is not. Marcus.com is a premium domain name, MarcusTheatres.com is not. Loan.com is an elite domain, LoanStore.info is not.