Domain Performance Analysis

Domain Performance Analysis

Understanding performance often requires getting really deep into the numbers. The other day I said to a client, “We like to understand which domains we win and which domains we lose versus a baseline.” Let me take you through some high level data that gives a snapshot of what I’m talking about.

For a start the data I’m about to go through is actual numbers for a client but for obvious reasons any identifiable information has been removed. The data is for a particular domain portfolio where it would appear that our optimisation services were struggling.

Escrow

The portfolio being tested has a baseline of around $95.59 per day and within the first week of being tested we underperformed by $12.37/day. Compared to what we usually experience this was a disappointment for ourselves and more particularly for the client. So what was going on?

Here is a snapshot of the performance data from 4 weeks, 3 weeks and the most recent week. All data has been normalised to reflecting the average daily for the period. There is the current revenue, baseline revenue and then Daily performance and the percentage difference.

Analysis

The columns are in bands of traffic. From All domains to those doing more than 0%, 20%, 40% etc. up to greater than 100% of the traffic compared to the baseline.

As an example, four weeks ago for domains that we saw at least the same amount of traffic as the baseline we performed at 100% of the baseline….in other words, no uplift. Overall, we performed 87% of the baseline for ALL the domains…..not good.

Most domain investors would immediately throw up their arms in horror and bail on the test at this point…..but let’s take a look at what happened over time.

I’m going to jump right down to the latest series of data for the past week and compare this to the baseline. For domains where we saw at least as much traffic as the baseline we are now performing 15% better. In fact, ParkLogic performed better for domains that have at least 60% or more of the baseline traffic. The overall performance jumped from 87% of the baseline to 96% of the baseline in a few short weeks.

What this data really says is that if there is traffic we perform better…..if not, then we don’t. This kind of makes sense! All that we really needed was for time to go by and those domains with little traffic generate a click or two.

To see the change in performance over my data set I summed the % Difference rows. This is a crude way to find out overall what was happening each week. The summed percentage moved from 634% to 711% which is an overall increase of 12% and to date this is continuing.

This is a lot of interesting data but what does it really mean? The problem with the portfolio isn’t that we aren’t performing, it was that it was taking a bit longer than normal because the typical domain has such low traffic. Unless there is traffic we really can’t quickly do the optimisation to increase the result.

What’s important is that as time goes by the trend is continuing upwards as our algorithms and processes go to work on the portfolio. What was also hidden in the data was the fact that we are currently providing an additional $40/day in revenue over the baseline for a large portion of the domains. In fact, if we were to keep managing all the domains that we were winning on, handed back the domains that we weren’t to the baseline company (assuming is performed the same as it previously did) then the client would receive a net revenue increase of 42%! That is a HUGE number!

The overall current number of $3.71 down was actually hiding a HUGE windfall….the challenge is to work out how to get at it. We are continuing to monitor the results each day and in our meeting with the client we plan on working out the next steps to extracting the traffic value.

There are two parts to this analysis which are key. First of all, you need the ability to mobilise the data and secondly, an eye to interpret what the data is actually saying. I’m not meaning to blow my company’s horn but the ParkLogic team has spent many years developing processes and skills to do exactly these two things.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Brandon and Matt Discuss the Escrow/Freelancer Deal

Brandon and Matt Discuss the Escrow/Freelancer Deal

A few days ago I wrote an article on the acquisition of Escrow.com by Freelancer.com. This morning, I had an opportunity to speak with both Brandon Abbey from Escrow.com and Matt Barrie, the CEO of Freelancer.com about the why the deal was good for both companies.

Although he is an Australian, Matt completed his Masters in Electrical Engineering at Stanford 1998. It was during this time that he found himself immersed in the burgeoning technology boom. Matt said, “I remember using Google because it happened to be on one of the universities servers and it seemed pretty cool at the time.”

Escrow

His Stanford background helped provide him with a unique insight into what makes tech companies really flourish. “It’s all about providing a superior customer result,” he said.

For the last 11 years Freelancer has been acquiring companies (over 19 to date) within the crowdsourcing and freelancing marketplace. Since listing on the Australian stock exchange at the end of 2013 Freelancer.com now has a market cap of more than $460 million.

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Freelancer.com Acquires Escrow.com

Freelancer.com Acquires Escrow.com

In breaking news, Australian company, Freelancer.com has reached an agreement to acquire Escrow.com for $7.5m in cash. Freelancer.com is the world’s largest freelancing and crowdsourcing marketplace by number of users and projects.

For many years, Escrow.com has been the company of choice used by many domain investors for their sales and acquisitions. Escrow also partners with eBay, GoDaddy, AutoTrader.com and Flippa.com and has a strategic partnership with the U.S. Commercial Service (USCS) in support of President Obama’s National Export Initiative designed to significantly grow US export volume.

Escrow.com

Since Escrow.com has been a private company this is the first time that we’ve had a glimpse into the financials driving the business. As can be seen from the chart below, Escrow.com has experienced continued growth even in the downturn years of 2012 and 2013. According to the press release announcement, for the FY14, Escrow.com has facilitated a gross payment volume of US$265 million, net revenue of just over US$5 million, US$1.2 million in EBITDA.

Escrow.com Revenue

What's really interesting is where all the revenue is coming from and the fact that  only 41% is coming solely from the US market. This really shows that the Escrow.com team is viewing the world as their marketplace rather than just the USA.

Revenue sources

Given the $7.5 million price tag this means that Freelancer is paying at least a multiple of 6.25. This seems reasonable given the strength, sustainability and market position of the Escrow.com business.

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Recent Comments
impulse
That seems like a much lower price for escrow.com than I would have imagined. It is a business with growing sales and a large annu... Read More
27 April 2015
mgilmour
It could be argued that it's a bit of a steal but at the same time my guess is that the single shareholder was a motivated seller.... Read More
27 April 2015
impulse
Yes, that is very true. That is exactly why I sold Bored.com for $4.5 million in 2008, see my reasons at http://www.impulsecorp.co... Read More
27 April 2015
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Saturday Musings - Why My Cat Is a Genius!

Saturday Musings - Why My Cat Is a Genius!

Pepper, my cat, is a living, breathing genius! She’s got the whole world completely worked out, organised and constructed to obey her every whim and desire. If only life could be so wonderful for us two legged creatures.

For Pepper, morning starts with a nap followed by slowly strolling over to her bowl so that she can let the rest of the family eat with her (it’s never the other way around for cats).

Just think about it for a second….Pepper has arranged for her servants (ie. me) to fill her bowl with the very best quality food, clean water and provide regular treats of ham, chicken and the like. She doesn’t lift a paw to get this undivided attention. For thanks I have the privilege of her letting me give her a pat. Wouldn’t it be great if the local supermarket deposited our weekly groceries in the cupboard and thanked us by doing our hair as well!

After breakfast, it’s time for another sleep and so she finds the warmest place in the house and curls up. In the meantime, her servants are working their backsides off so that they can provide her with food and lodging. I’m not sure about you but the last time I checked my servants weren’t anywhere to be seen. Worse than that the bank, electric company and all seem to get quite upset when I decide to take a break, let alone a nap each day.

During the day Pepper wanders into my study to make sure that I’m working hard for her empire. Just to reinforce her control over me and to make sure that I’m not messing around with my time she curls up on the floor and pretends to be asleep. What an overlord!

In the evening Pepper then graciously agrees to climb onto my lap as long as I provide her with a scratch behind the ear….after all, it’s too beneath her to do it herself.

So I’ve finally had a brilliant business idea! I’m wanting to build a device that turns me not into a fly (like the movie) but a cat. They seem to have life completely worked out.

Have a great weekend!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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mgilmour
Hi Jeff, Thank you for your kind comments....I must admit that Pepper provides an incredible amount of entertainment and fodder fo... Read More
26 April 2015
mgilmour
Thanks for that Louise.....I presume that you mean massage and not message though. ... Read More
27 April 2015
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Marketing With No Money - Part 6

Marketing With No Money - Part 6

If you have ever developed a website then one of the things that you’ll be looking for is traffic. I’m a numbers guy and I need information to determine how successful my marketing efforts are for each channel. This article will provide insight into what I’ve built to do all this….

First of all let me say that there is absolutely no point in spending huge amount of time telling people about your product or service if there isn’t any response. You need to clearly define what your goals are and then measure them to see if you are succeeding. For me with the marketing of my Battleframe I’m ultimately after two things:

1. Sales

2. Sign-ups to my website

Escrow.com

Since I’m a new author I’m less concerned about item one and I really want to focus on how to get the sign-ups happening.

So what have I built to track all of this information? If you’re wondering why I decided to build a system then here’s the answer. I’m a firm believer in forcing myself to keep my development skills up to scratch. As one of the founders of ParkLogic it allows me to more fully understand both the challenges of our development team and also what our client’s may be wrestling with. It’s also one of the reasons why I maintain my own personal Unix server.

I personally believe that clients should have the confidence that I not only know ParkLogic’s offering but that I can intelligently discuss solutions that may involve some additional development to meet their needs.

Secondly, when I looked at the different products for tracking advertising I either found them, too complicated, expensive or written by a person that has no idea about the business requirements.

So back to my simple tracking system…. The first thing that I wanted to do was build something that would scale across multiple websites. Each website would then have multiple campaigns and each campaign multiple redirection links where I can track both impressions and clicks.

Although it looks pretty rudimentary the tracking system does all of these things plus a few more. For example at each stage (website, campaign and redirect) I can get a quick report that tells me how they are going.

Tracker 04

The website tab lists the websites and I can either bore down to the campaign level, Archive the website, get a report on overall performance, add a tracking SubID (work in progress) or edit the website details.

Tracker 01

As can be seen from the Campaign’s tab I have a number of different traffic sources that have similar functionality to the websites tab but at the campaign level.

Tracker 02

If I select one of the campaigns it displays a list of all of the redirects that are currently being used to track the traffic. It’s important to realise that each redirect is simply a URL and this means that they can be applied to links, images or anything else.

Tracker 03

At any stage I can Archive a website, campaign or redirect. This means that they will be removed from the reports but it doesn’t mean that they link will break. I will build a series of reports that will show the archived items at a later date.

So as you can see it’s a work in progress but it’s getting there.

The most important next step for me is to start interpreting the data so that I can more fully understand where to focus my efforts. The science fiction book market is incredibly fragmented and it would be really easy to waste a lot of time on marketing channels that really produced no results. So wish me luck as I take these next steps :-)

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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