There is no doubt that keywords in domain names matter for SEO.  However, there is a lot of debate as to how much they matter – and whether they really matter enough to justify paying the high price tag of an exact-match domain name.

Domain Name is Just One Factor
There are literally hundreds of factors which affect search engine rankings.  While domain name is one of these factors, experts will tell you it only accounts for about 1% of all your SEO.  If SEO is your only reason for choosing the exact-match domain name (as opposed to branding reasons), then you’ve got to be practical about the decision:  How much of your marketing budget would it cost you to buy the domain name?  If the exact-match domain name is going to cut a huge chunk out of your marketing budget, you’d probably be much better off buying a cheap domain name and using the money saved for other SEO methods.

Age Matters!
Let’s say that you suddenly find out an exact-match domain name is available and (by some miracle) it is within your budget.  Should you scrap your existing website and use the new one instead?

It depends on how old your existing website is.

A couple years ago, Sean over at SEO Hacker published an interesting case study about the importance of domain age. A webmaster had two domain names, the first of which was 7 years old but hadn’t been used, and the second of which was 3 years old and had been used.  The webmaster put the exact same content on the older website and it immediately started outranking the younger domain.

Only the geniuses over at Google can tell you exactly which matters more, domain name or domain age, so you’ll have to use your own guestimates and tests to figure out which is best for your case.  In general, I’d say to stick with your existing, older domain so long as it has decent traffic and rankings.  If the existing domain has been lagging behind the competitors though, then switching to an exact-match domain name may give you the bump you need on the SERPs.

The Issue of Branding
Exact-match domain names may not be so important for SEO, but they are vital for branding.  Branding should be your ultimate goal if you have a long-term marketing plan in place (Note: getting to the top of the SERPs should NOT be your ultimate goal!).  With a memorable name that reinforces your business, you can get more conversions and repeat customers.

Take the online marketing blog OnlineSEOGuide.com for example.   Even though the domain name has nothing to do with the subject matter, it is memorable enough to stick with visitors.  Plus, by getting his actual name into the domain name, it helps readers connect with him – which is important in blogging.

A domain name like OnlineSEOGuide.com may work well for a blog, but it isn’t going to fly well in ecommerce.  If customers are going to give you their credit card information, they want to feel like you are a serious business.  An exact-match domain name can really help in these situations.  Exact-match domains are also helpful when running PPC campaigns because they improve number of clicks.   Check out the study conducted by Microsoft which shows that searchers pick brand over quality to get an idea of how domain names affect user behavior.

The Final Word…
If you are thinking about domain name in relation to SEO only, then you are missing the bigger picture.  After all, no one is going to drop $10k on a domain name if they don’t have big plans for it like building up a well-known, trusted brand.  Serious online marketers who are in the game for the long haul know that domain name is much more than SEO and are prepared to build a domain into an enterprise.