By Liesbeth Mack-de Boer, Chief Sales Officer for Sedo

Domain names should not just be seen as a tool to bookmark a company’s digital presence on the web. They in fact offer entrepreneurs and small businesses the opportunity to grow both their digital presence and expand the revenues they make via the internet.

Just like bricks and mortar investment can result in profit in the offline world, domain names can be regarded as an online property investment that offers great return and if looked after, can offer fantastic levels of profit when sold at a later date.

Building the domain name portfolio

A recent piece of research we conducted at this year’s TFM&A conference in London found that two thirds (70 per cent) of digital professionals have used microsites for specific campaigns. A great way to drive online profit is to monitor domain marketplaces for URLs containing keywords relating to targeted vertical market.

These web addresses are often the first stop for those looking to purchase a new product or service and will create instant brand loyalty with a new customer. This in turn develops recognition between your brand and a particular service when customers return for repeat purchase. Owning these domains enhances credibility, helping to establish a company as the voice of education and information in their respective industry.

Barnes and Nobles (books.com), Johnson and Johnson (baby.com) and Calvin Klein (bras.com) are some of the success large businesses that were early investors in generic industry domains.

Advertising with your domains

Domain monetisation, the process of purchasing domains and running advertising via a specialist company on a landing page to earn advertising revenue from traffic, is another way to ensure that return on domain name investment is being maximized.

This provides a great way to make money out of domains that are currently not in use. Opposed to leaving domains void of content, fill the site with relevant pay-per-click (PPC) advertising.

This will help reignite revenue streams from unused traffic, making best use of redundant domains in a portfolio. The domain parking process is easily initiated and can be supported by domain specialists to ensure the links on these sites remain targeted and relevant.

Trading domains

Watch out for good value for money domain names and build a portfolio. One of the best ways to do this is to keep your eyes and ears open on what’s going on in the news. There are always new fads and issues on the horizon. Words like ‘Sudoku’, ‘Ayurveda’, ‘Pilates’ and ‘Hashtag’ have all recently come to the public’s attention, so identifying terms like these before they become renowned and registering related domain names will prove profitable.

While a term remains unknown and free from trademark restrictions, they may be acquired cheaply or even for free. When they become more widely understood by the general public, the owner will be able to put them on the secondary domain market at far higher price than they were originally registered for.

A digital asset

Domain names should be regarded as an asset opposed to an expense. By identifying top keywords and developing a list of target domains, the digital entrepreneur will command strategies that best take advantage of additional profits, through domain trading and targeted advertising.