Cebu Pacific Air Case Study | Bad Domain Name Examples

How to choose the wrong domain

Cebu Pacific's website gets around 92,000 hits a month. But because they're using the wrong domain name (cebupacificair.com), they're actually losing as much as P2.8M a month! Talk to our domain experts so we can help you drive more traffic and sales to your site through your domain!

YOUR DOMAIN SHOULD BE YOUR BRAND

Most people know their brand as Cebu Pacific, and NOT Cebu Pacific Air. Let's look at how what seems to be a minor detail (the wrong domain name) actually makes a huge difference for a business.

Look at Google Trends – a website that tracks search term volume – and you'll see that:

Worldwide, the term “cebupacific” is 3.2 times more popular than “cebu pacific air”.

For every person that searches for “cebupacificair”, 3.2 people search for “cebupacific”.

In the Philippines, where most of their customers come from, it's almost 5 times more popular. For every person that searches for “cebupacificair”, 5 people search for “cebupacific”.


LOSING CUSTOMERS BY THE THOUSANDS

Using this data, we can estimate how many customers are actually lost because of a bad domain name.

Let's assume that 15% of all visitors to a website are type-in traffic – that is, they don't use a search engine and instead just type into their browser what they think is the correct domain name.

Google Trends estimates that cebupacificair.com gets 13,000 unique visitors a day from the regions where Cebu Pacific's customers are.

Cebu Pacific's type-in traffic is 13,000 visitors X 15% type-in traffic = 1,950 visitors a day or 58,500 visitors a month.

But for every person that types in the correct domain name (cebupacificair.com), 3.2 people will type in either cebupacific.ph or cebupacific.com. This means that the Cebu Pacific website is losing 187,200 visitors a month!


HOW MUCH ARE THOSE LOST CUSTOMERS WORTH?

Method 1:
How much Cebu Pacific would have to spend on advertising to get an additional 187,200 visitors a month to their website?

Inquirer.net charges $5 for every 1,000 times they show your ad on their site ($5 per 1,000 impressions or CPM).

Assume that for every thousand impressions, 40 people actually click on the ad (4% clickthrough rate) and end up visiting the Cebu Pacific website. So in order to get 187,200 visitors, the ad needs to be displayed 4,680,000 times (4,680 CPM).

At a cost of $5 per CPM, the advertising value of all that lost traffic is: $5 X 4,680 CPM = $23,400 a month or $280,800 a year

Method 2:
How much revenue would all those visitors have generated if they had actually gotten to the Cebu Pacific website?

Let's assume that for every 1,000 visitors to the site, 43 actually buy a ticket (4.3% conversion rate). And let's conservatively estimate that Cebu Pacific makes an average profit of P350 on every ticket sold.

187,200 lost visitors a month X 4.3% conversion rate = 8,050 lost passengers a month

8,050 lost passengers X P350 profit per passenger =
P2,817,500 a month or $676,200 a year in lost revenue


WHERE DOES ALL THAT LOST TRAFFIC GO?

Type the domain cebupacific.com into your browser, and you'll see this:

If you type cebupacific.ph, you'd see this:

They're not real websites, just pages that displays links to ads. They're not hard to set up either – just sign up with an ad provider and you could have a site like that in minutes.

Every time someone clicks on one of those links, the people who own the domains cebupacific.com and cebupacific.ph make money. And 187,200 visitors a month means a lot of money that could be going to Cebu Pacific itself.

The worst part is that the links lead to websites that show Cebu Pacific's competitors.

Cebu Pacific is losing all that revenue AND helping their competitors at the same time.


Cebu Pacific is actually taking steps to make sure that their domain name and brand are the same. But instead of just changing their domain name, they're changing their brand!

Old branding:

New branding:

They've even repainted their planes to reflect this change.

A nationwide marketing campaign to build a brand probably starts at a cost of P50 million. Changing their brand instead of their domain name is not only costing Cebu Pacific a ton of money now, they've also basically thrown away all the money they spent to build the original Cebu Pacific brand in the first place.


WHAT'S THE RIGHT DOMAIN WORTH?

If Lance Gokongwei is losing $676,200 a year on these domains, what's the most he should pay for them? Let's use the Taylor Series to find out:

If the interest rate is 10%, the domains are worth $7.4 Million

Click here to download this case study. (PDF, 489k)

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