How to do a Domain Traffic Test – Paying Attention to the Right Number

How to do a Domain Traffic Test – Paying Attention to the Right Number

In the previous articles in this series I discussed the importance of baseline data and what you should be measuring. I’m now about to dive into the most important metric that you can ever use to evaluate the success of a traffic test, the normalised revenue per thousand visitors.

I want to apologise to all those readers where mathematics isn’t your strength….that’s OK. I will try and make this article as simple as possible so that it gets across the point.

Escrow.com

Many domain owners have learned to pay attention to the revenue per thousand visitors (RPM) that is produced by the various parking companies. The reason for this is that it takes into consideration the variation in the traffic levels for each domain. So really what is RPM? The formula for RPM is the following:

Revenue / visitors x 1000

This makes sense until you get under the both revenue and visitors. For a start, visitors is actually filtered traffic and since each parking company filters traffic differently than this number changes for each company. Another way of viewing visitors is:

Raw Traffic x Parking Company Filter

Then there is the Revenue number. What revenue number should you be using? The estimated numbers, the number confirmed 2 days later, the number less clawbacks, the number less account adjustments etc. There are about 7 different revenue numbers that need to be examined for each domain!

For example, over the years we found that some monetisation companies would say that they will pay more for domain traffic during the month and then do an account adjustment at the end of the month. This meant that they were effectively bribing the traffic routing algorithms to during the month and then taking all the money back at the end. To understand who the winner is you need to take this type of behaviour into account.

So let’s look at our formula for RPM now:

(7 Different Revenue Numbers) / (Raw Traffic x Parking Company Filter) x 1000

Because we don’t know what the parking companies use to filter their traffic let’s imagine that we can actually count the Raw Unfiltered Traffic that we send each company for each domain. Let’s also imagine that we are able to sort out the revenue and with a bit of magic work out the actual revenue number for each domain each day. The formula then simplifies and looks like the following:

(Adjusted Revenue)  /  (Raw Traffic)   x  1000

This is the normalised RPM (nlRPM) and it allows you to directly compare any monetisation company against another. What we do is count each bit of traffic that we send each company each day and then measure the adjusted revenue that the traffic generated. When you do this for all companies you get a number for each company so that you can then know which one is actually paying the most.

Let me say from the outset that this starts to get REALLY complicated! This is also what you need to consider if you want to know who is actually winning your traffic at any point in time.

Thankfully, at my company, ParkLogic, have servers and algorithms that all the automatic mass calculation of all of these numbers. We then use these numbers to route the traffic to the winning company. Each day, we have servers that all they do is process data for about 15 hours to get to the nlRPM.

Namejet.com

So let’s imagine that we have a domain that has a huge nlRPM and it’s smashing the baseline data out of the ballpark. Do we claim victory? Heck no! Even when you have the normalised data you need to understand WHY the domain is winning.

For example, let’s imagine that you have an education related domain and you are comparing the baseline data in July versus September. I can almost guarantee that the nlRPM will be higher in September as school’s back and this will attract the educational advertisers!

To put everything into context, the nlRPM is like the science of domaining….you have to have this number really know how you are doing. Understanding why the nlRPM is changing is the art….this is where experience comes into play.

I think that the gold rush provides a really good analogy for traffic monetisation. In the past, there used to be gold lying on the ground everywhere and you didn’t have to do anything to pick it up. Today you have to drive a shaft 3 miles deep and run side passages that follow the seam of gold. This is what I’m talking about with the nlRPM. The gold is still in the mine but you just need to dig it out and this is what I do day in day out.

Please leave a comment or send me a message if you would like me to run a webinar on how to run a properly constructed traffic test.

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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. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.

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Saturday Musings - How to Always Win

Saturday Musings - How to Always Win

My daughter Elise had her first game of netball for the season on Saturday. For those of you that don’t know what netball is, it’s like basketball with no backboard and you can’t dribble. She played brilliantly and the whole team just seemed to come together so they ended up winning.

I’ve heard many parents (myself included) fall into the trap of saying to their children. Winning isn’t important, it’s the fact that you play the game. There is a certain amount of truth to this statement but if winning isn’t important for the little darlings then why do we keep score? As parents, we think that are kids are so stupid that they don’t realise the fallacy of our encouragement.

Escrow.com

The fact is that in life winning IS important. It’s important because it inspires you to try harder, push the limits and think through problems.

Could you imagine if Alexander Fleming, who developed the antibiotic penicillin, just pottered along rather than strive to do something that had never been done before? Or how about, Gordon Moore that developed the first microprocessor with Andy Grove at Intel. My guess is that we’d all still be on 4 bit computers.

The whole essence of our education system is to ultimately produce people that do doctorates (plus educate the masses). Doctorates are only awarded to individuals that have broken new ground for the whole of humanity. They aren’t just playing the game, they’re playing to win in their field of study. By the way….there is no reason why you have to be at university to win the equivalent of a “doctorate”.

My wife and I were chatting over breakfast and I was telling her that we are setting some new records at ParkLogic. In passing I mentioned that I was looking towards the next goal. She asked if I was ever going to be happy. Of course I’m happy I responded, I’m happy that I can now push onwards even further.

I love goals because they determine whether I’m winning or losing. I’m not comparing myself to other people (that is really wrong), I’m comparing myself to me. My goals inspire me forward and get the creative juices firing to push past problems and challenges. They are inspiring.

I’ve used the term losing quite a lot in this article but I think that I should say that I actually don’t believe in losing. You see, losing is a mindset. You only lose if you haven’t learned.

For example, when my kids brought home the results from a maths test then I’d talk about the questions where they’d lost not where they had won. So if they achieved an 80% result then we would rejoice in the 80% and work on the 20%. This means the “loss” really isn’t a “loss” at all. It’s a learning opportunity. What’s the point in focusing on the 80% that you already know when you need to learn about the 20%?

If you approach losing as an opportunity to learn then losing suddenly becomes a “win”. This is REALLY important. In life, you can never lose if you truly believe that everything is an opportunity to learn. Granted, sometimes this is tough to do but it’s better than getting depressed.

In business, profit is your scoreboard. If you don’t have any profit then many people think you’re losing. It’s better to think of it as an opportunity to learn, be creative and get that scoreboard turned around.

Winning all the time is actually a big trap. What many people do in business is continuously repeat what they are doing, over and over again until when? Until they fail. What’s the point of innovating if you’re winning? So learning isn’t just for when you lose it’s also when you’re winning.

Andy Grove of Intel coined the phrase, “Only the paranoid survive.” He wasn’t trying to say that we all need to become mental basket cases….he was trying to emphasize that in an innovative industry you had to constantly reinvent yourself whether you’re losing or winning.

So let’s bring this all back to the domain industry. For many years, traffic monetisation was like picking gold up off the ground. It was everywhere! Everyone was winning and partying like there was no tomorrow.

Now look at where we are. Payouts are dramatically less and if you go onto any of the forums people are complaining that PPC revenue is doomed. The majority of domain traffic owners are basically doing the same thing today as they were five years ago…..I hate to say it but you’ve continued to do what was successful in the past until you’re now losing.

There are a few domainers that began to innovate and try different things. They dug shafts 3 miles deep into the earth to find the seam of gold to monetise their traffic better. I know a number of these individuals, they halted the downturn and even increased their earnings. While the majority of the industry was complaining these individuals were innovating. They then picked up a lot of portfolios for a song! Paying a multiple on the depressed prices and monetising at higher than 5 years ago rates.

Yes, the fact that you’re playing the game is important. You can’t win without playing but let’s never lose sight of the fact that you should be playing to win. My advice is to use “losing” as an opportunity to learn and try something different so that you can view every loss as a win! Who knows where this new mindset will lead you…..

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mgilmour
You've got to be kidding! I didn't know that......does this mean that they won't have to keep score in the rest of their life?... Read More
16 February 2015
mgilmour
Thanks for that Aaron! I bet you that all the kids are keeping score no matter what the parents are doing. Maybe there is an oppor... Read More
16 February 2015
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Interview on Domain Masters Radio

Interview on Domain Masters Radio

I just had a great time with Jonathan Tenenbaum and Scott Pruitt from Domain Masters radio. In the show we covered a huge range of topics, starting with my own personal story and how I entered the domain industry. It took me down memory lane and caused me to reflect a little on the journey over the last 14 years.

We then moved on to how to extract the most value from domain traffic. Times have changed in doing this, you can no longer just pick the gold up from the ground. I relate how ParkLogic is like drilling a mineshaft three miles down to find the seam of gold for each domain.

We finally discussed domain development and how it's so important to start with a business model and move on from there. Many people start with building a website and then try to make money....it's the wrong direction to head.

I want to thank Jonathan and Scott for the opportunity to be a part of the show. They do a great job! Here are the links to the live cast and the archive.

Live Podcast

Archive Podcast

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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. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.

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Looking for Work….

Looking for Work….

My son, Timothy is looking for work and I suggested he may like to write content for websites. If you need of an incredibly talented writer that can write articles on just about any topic then I’d highly recommend him.

Timothy is half way through a Bachelor of Arts, majoring in performance and writing. For the past couple of months he’s been working on his first novel that is based upon his experiences when he took a “gap year” from studying last year. He plans on publishing the book later this year.

Please contact me here (and I’ll connect you with Tim) if you have need of an excellent writer that is prepared to work on a fixed fee per article basis. Below are a few pages from his novel that feature his unique flare for writing.

 

Extract from the first few pages of Tim's Book

To tell you the truth the story begins on an unremarkable day in June. The chill of the season had not quite set in yet and it could be considered a ‘nice day’ despite the brisk breeze and scattered clouds. Most of the local residents decided to walk about, arms pumping or steadily guiding leashed dogs as if to get in enough exercise before the rains, storms and frosts set in.

In the town there was a broad jetty that separated the town from the water. The Charlotte Corday along with other trawlers moored here year round. The wharf was broad and bare with broken bottles decorating the wooden boards. These remnants of last Saturday night crunched underfoot and slipped between the woodwork to decorate the calm water like stardust.

Peter scanned the docks. He had spent the morning reading and felt like today was the day for success. Whilst patient and optimistic the young man had his concerns when the cash ran low and the meals became plain. He considered himself a guy who could appreciate the simple pleasures, especially those of the flesh. Lately he’d been fantasizing about a medium steak served with pepper sauce, chips and a pint of draught. A feature of the dream would be a pretty girl who stole enough chips to be endearing but not so many to leave Peter starving. She would also insist that they get dessert and wine.

It was around noon when Peter marched up to the skipper who crouched over a steel cable. Peter had blown into the fishing town in the last storm and like any traveller had tried to find work where he could.All previous leads had informed him there was no work to be found in town. They then added th

at there’s “always the fishing boats” like a sorry waiter stating that the restaurant was out of food aside from the complimentary bread rolls.

But that’s what the self-titled vagabond wanted to do of course.

The kid was from the city but whether it was too many storybooks or not enough study Peter decided one day to adventure the lesser-known shires of Australia looking for the oddest of odd jobs. The young bloke looked promising, like the kind of person you would hire on a whim.

Employers would say they could imagine enjoying beers with him twenty-odd years in the future should he stay with their company that long.

Precisely nothing like the characters he would soon be working with.

“So you want to go out on the Charlotte?” grunted Skipper Jonno after the formal request was made, albeit stiffly by Peter. He barely looked up from his work splicing two metal cables together but that brief look assessed a soft one. Jonno prided himself on being able to determine the worth of a man with nothing more than a glance.

“I was told the Charlotte Corday was the hardest ship around”

Skipper grunt-chuckled in amusement, his smile mostly comprised of the discolored gums of a lifelong loyal smoker. He was dirty, bearded and barefoot.

A perfect image of a fisherman.

It was the crazed eyes that gave away his seniority as a skipper. Whether it was too many hours spent scanning the waves or something inherited from birth didn’t particularly matter. Everyone said you had to be nuts or a hopeless case to make a career out of fishing. You either needed to be the son of a fisherman, angry at the world or with no other options.

Skipper’s eyes drilled into the cable he was working on.

Now if this sort of crazy was in the eyes of a woman it might suggest she was the type to divorce a man after decades of marriage.

She calculated her monetary entitlement whilst her husband slept happily in front of the TV every night.

She organized detailed attack plans with a lawyer months before the declaration of war.

She put her clipped toenails in his dinner.

When the court date rolled around the poor bastard would be left sweating in the booth wondering why he married a psychopath whilst his balding lawyer informed him “this is the best we can do unless you relinquish your claim on the dog.”

But this sort crazy in the eyes of a man just past his prime sends the message that he wouldn’t ask anyone to do what he wouldn’t do himself. Following this logic he could calmly assign the most insane of the dangerous tasks. Jonno was the kind to casually tie knots on the bow during a storm cursing the fact that if wasn’t for the drizzle he would be able to smoke a dart. Tales behind fleshy scars and of pub brawls included with any conversation or upon request.

Peter swallowed in anticipation. For a number of days he strolled up and down the jetty calling out for work just like those people down at the fisherman’s co-op had told him to do. It was the opposite of finding a city job. No wanted signs, no collared shirts and certainly no online applications. It was unorthodox, it was foolhardy and it was perfect.

“Right mate you’re on for this trip. We head out tonight at five, remember to bring warm clothes.” Said Skipper Jonno

“No problem see ya then,” Peter replied. There’s a unique type of bafflement experienced when given something you expect to be rejected from. The skipper paused and so Peter turned to leave.

“Hold on a minute”

“Yeah?”

“You have any experience on a trawler before?”

Peter thought it odd that the interview should come after being accepted.

“I did a day’s scalloping trip a weekend ago but that was just for tucker”

“Jake’s boat? He loves those tucker trips,”

“Yeah”

Jonno sucked his teeth and shook his head.

Only idiots worked for nothing. But the only way for idiots to become less than idiots was to sell themselves for nothing.

“The Estonian boys are good blokes aren’t they?” Jonno looked up, dumping the fid on the jetty and wiping his hands on an already greasy rag.

Peter nodded and grinned; the two backpackers were hard workers and even harder drinkers. After his first and last trip the three of them polished off enough vodka to make the usually robotic pair explain in depth the ins and outs of the Estonian military service.

“I take it you don’t get seasick then?”

“I’m a bit off on the first day or two and then I’m all good.” Peter answered. This was perhaps the question he was most prepared for. Everyone in the small town asked it from the savvy bartender at the pub to the most clueless clerk at the information building. It was the number one conversational icebreaker for fishing town residents.

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Saturday Musings - It's My Birthday!

Saturday Musings - It's My Birthday!

Tomorrow is my birthday! I find I’m so privileged to lead a life that is exciting, at times challenging but always interesting. As I breathe the fresh air of another year I think that this one’s going to be absolutely awesome. Why is that?

For a start, my wife has given me an absolutely brilliant present….time to finish my scifi book “Battleframe”. Today is the day that I really do hope to finish the final read through and then it’s off to be published. Feel free to visit my author’s website at michaelgilmour.com to register and get the announcement when you can buy it on Amazon. :-)

The domain business is booming! My domain management company, ParkLogic, is experiencing really rapid growth and at long last we are nearly at the end of an 18 month development cycle. I’m so looking forward to seeing the new platform in action.

Escrow.com

Those items above are great but do you know what’s even better? My family is all home and the love of my wife and kids is really what spurs me onwards. Tim is saving up to go travel through Europe, Sarah is studying to become a film/tv makeup artist and Elise is nearing the end of high school (Dad’s helping her with maths).

I must mention that my wife, Roselyn is growing her own business (kandycakes.com.au) and is having a great time decorating cakes and cookies. Just looking at her happily making her amazing creations puts a smile on my face and sometimes incredible flavours in my mouth!

So tomorrow is my birthday and we’re going to have a great family breakfast together. This will be followed by a few friends around to share some wine, cheese and fruit while we enjoy perfect weather in the backyard.

I have incredible friends all over the world from the domain industry that I would love to have around to my house and celebrate my birthday. You are really special people that I’ve known for many, many years. Let me say that you will be there tomorrow in my heart. Thank-you one and all for being a part of the last 12 months of my life.

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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. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.

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petrozil
Wish you a very Happy Birthday Michael. You are one of the wonderful persons the world has ever produced. We all wish you a very b... Read More
11 February 2015
mgilmour
Thank you for your kind comments. They are really appreaciated.
11 February 2015
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