image image image image image image

What is Domain Parking & Why Does It Matter?

pushing a button on a conceptual dashboard with domain extensions

What is Domain Parking & Why Does It Matter?

Whether you plan to sell or use a domain, you can save and make cash by investing in domain parking. Many people have generated millions from purchasing in-demand domains.

However, it’s a bit challenging to acquire potentially valuable domains at the moment, as you can only gain high returns by accumulating a collection of domains.

This guide will give you an insight into what domain parking entails.

What’s Domain Parking?

Domain parking refers to how domain holders generate revenue from unused domains. The home page is amended to mark the “parking lot” after the registrar purchases the domain.

Ads are placed instead of Specific content or services—through this, the domain owner makes money based on visitor numbers and the clicks from the ads.

You can create an automated profit system if you invest in an outstanding domain and add appealing ads. There are some parked sites where owners don’t place any for-profit ads; instead, notes like “coming soon” or “under construction” show that the domain owner actively plans to use the domain in the future.

The two main types of domain parking are:

  • Monetized: This system generates revenue by displaying ads to visitors.
  • Non-monetized: Domain owners use this technique to reserve domain names when planning a future launch. The parked domain usually displays an “under construction” sign.

Advantages Of Domain Parking

  • You can use it as a proxy for an actual website—the domain name registrant or domain holder may decide to redirect traffic coming in from one domain to a different domain—you can therefore use the parked domain for this using URL redirection or domain cloaking.
  • The domain owner can sell parked domains to prospective trademark holders; if they know that a particular brand intends to create a website, they can park the domain and sell it to the brand owner at a higher price.
  • Domain parking can assist in maintaining backlinks from a terminated webpage.
  • Domain parking requires little to no maintenance — you can set up a domain and forget about it till you are ready to develop it.
  • You can generate income from multiple parking domains if you have no interest or lack time to run the website.
  • Domain parking is effortless to set up — you don’t need to put in hours of work — all you need to do is sign up with a domain parking company, and they’ll do the rest.

How Does Parking A Domain Work?

The primary concern for domain parking is unused domains, not those linked to an active project. When users visit a website with a parking page full of ads and click on them, the domain owner gets “parking revenue.”

The page can potentially attract more traffic if used for successful projects in the past or linked from other pages — this increases the domain’s value. To resolve a domain to a parking page, a domain owner must configure the name server settings at the registrar to match their parking providers like Sedo.

The domain owner sets the parking page advertising content. The Sedo interface displays the number of clicks, traffic on the parking page, the click-through rate (CTR), and revenue generated.

Why Should I Park Domains?

If you’re not planning to use a domain, you shouldn’t spend funds on hosting the domain on its IP address.

Depending on what you’re planning on using the domain for in the future, parked domain monetization may be a great idea.

Purchasing and parking domains can also help prevent cybersquatting and reserve domains.

Below are reasons why you should park domains:

1. Brand Protection

Domain parking helps in protecting brands. Many brands purchase domain names identical to theirs and park them to prevent others from using them.

For example, your firm is Prime Paint, and your website is Primepaint.com. To ensure people don’t land on the wrong sites, you’ll have to purchase domains like primepaints.com, prime-paint.com, or primepaints.net.

You can then park the domains and make them direct visitors to the active website. This will strengthen your online branding.

2. Domain Investing

Domain parking is a cost-effective way of holding a collection of domains if you’re purchasing domain names mainly as an investment opportunity.

Domain names sell for huge sums, but you must select ones in high demand. You may have to hold some domain names for several years until they command a high price.

Make the domain functional and generate income in the meantime. You can simply display advertisements on your domains and make money by using domain parking services.

Some investment-worthy domains include:

  • New domains: You can buy new unused domain names. These domains are usually affordable.
  • Misspelled domains: These are the misspelled versions of other popular websites.
  • Expired domains: These are domains that have attracted traffic in the past.

3. To Keep a Domain Before It Expires

If you own a particular website and no longer want it to be active, you can unlink the domain from your website’s IP address and park it till its expiry date. This prevents other sites from taking it until your ownership period ends.

4. To Reserve A Domain Name

You can also park a domain name to reserve it for later use. No one wants to register a firm or brand name only to find that another person has already purchased the domain.

It’s better to buy a domain name early on and park it until you’re ready to build out the site.

5. To Avert Cybersquatting

Cybersquatting occurs when an individual registers a domain name identical to a well-known brand. People do this to sell the domains to the brand for a profit. As a result, companies use domain parking to avert cybersquatting.

The domain owner can hold it for ransom and request any price depending on how badly the company needs the domain name. The owner can also add any kind of content to it — this can negatively impact a brand’s image.

Cybersquatters mainly target big companies and prominent people. Some companies and individuals who have been victims of cybersquatting include YouTube, Nissan, Paris Hilton, Obama, Madonna, etc.

Cybersquatters also target typos instead of going after versions of a specific brand or name. For example, YouTube has had to secure some typo versions domains like yutube.com, youtub.com, and youtbe.com.

Parking them is the most feasible way to secure and store your site name or brand versions. You can then make these domains point your visitors to the main site.

What Are The Different Domain Parking Options

WWW and COM domain name
Image Credit: Shutterstock

If you’d like to park a domain, there are different options you can explore, including leaving it as an error page, displaying managed ads on it, creating a sales page, or using self-managed ads.

Domain parking usually uses a combination of:

  • Cost Per Click (CPC) frequently referred to as Pay Per Click (PPC)or Earnings Per Click (EPC)
  • Cost Per View (CPV)

When a visitor lands on or types your domain, they’ll be presented with a parked page displaying a set of related terms.

If visitors click on a related term (first click), they’ll see many associated adverts on the subsequent page. When the user clicks on one or more adverts(second click), you’ll get a percentage of the ad revenue.

1. Using Managed Ads

If you’re interested in monetizing a parked domain, the easiest way to achieve this is by using managed ads and a registrar or a domain parking service.

Domain parking services allow you to park your domain with them without incurring any costs. They also manage advertisements on the domain and share a fraction of the ad income.

Even though type-in traffic isn’t as high as it once was, you can still get some money, especially if you’re parking many domains.

Domain parking services usually display the maximum number of advertisements on your domain. This means that you’ll earn as much income as possible.

Nevertheless, managed ads can ruin your domain’s reputation with time since visitors and search engines will associate it with high advertisement content, which is considered spam.

This isn’t a significant concern if you intend to flip and sell domains. However, if you’re planning to use the domain in the future but still want to generate some ad income, self-managed advertisements are the better option, provided you know how to implement them.

2. Cost Per View (CPV)

When a user lands on or types in your domain, advertisers bid in real-time for your traffic. The visitor is redirected to the site whose bid was successful. As the domain owner, you earn a commission every time the user is redirected to another site.

There are two categories of cost per view ads :

  • Brand ads: these are high quality and targeted. An example is hotels.com.
  • Run Of Network (RON) ads are of lower quality and typically aren’t targeted. An example is, ‘win a smartphone’ by entering a competition.

3. Using A Sales Page

If you have a domain you wish to sell; you can generate traffic using a sales page. This will alert visitors that the domain is up for sale, inform them how to purchase it, and get in touch with you.

If you have a website with a commerce page for selling domains, you can direct parked domains to it.

4. Using Self-Managed Ads

You can use self-managed ads to monetize domain parking without splitting any of your domain’s revenue.

You can manage the advertisements personally and receive 100% of the income with self-managed ads. You’ll also have control over the number and type of display ads.

This is ideal if you plan to use your domain in the future and want to balance search engine ranking and reputation with ad revenue.

Nevertheless, there are various disadvantages of using self-managed advertisements. First off, they need some coding knowledge to set up.

You have to first register with an ad network to use self-managed ads. A majority of the ad networks need a working site that gets a minimum amount of traffic each month. It’s pretty difficult to register with an ad network if all your domains are inactive.

Lastly, you need to dedicate a reasonable amount of time to managing your ad account.

5. Using Error Page

Lastly, you can park a domain and simply let it show an error message.

This will automatically happen to your domain if you don’t select any of the domain parking options listed above.

Error messages appear different based on the browser the visitor uses. But, they typically state that the visitor can’t reach the site and the IP address couldn’t be found.

If a user wants to establish if a domain name is already in use, they’ll have to conduct a WHOIS search.

Bottom Line

Now that you’re familiar with domain parking and how it works, you can understand its buzz and the likelihood of raking in huge amounts of cash if you do it strategically. If you already own a domain, parking can be an excellent way to generate revenue.

Leave a Reply