NamesCon Update Video

NamesCon Update Video

NamesCon founder, Richard Lau, provides an update on the preparations for NamesCon in 2017. Everything from his recent travels through to speakers and sponsors are covered.

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Attend NamesCon 2017 at a fraction of the final ticket price of $999. Register now to save big with our "AlwaysThankful" $399 promotion which ends November 16.  And in respect of Veteran's Day on November 11th, any ticket purchased on Nov 11th will result in a $200 donation by NamesCon to Veterans Village in Las Vegas. (http://veteransvillagelasvegas.org)

Greenberg and Lieberman

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Part 1 - Understanding EPC

Part 1 - Understanding EPC

One of the most misunderstood metrics that is bandied around by domain owners is the term Earnings Per Click (EPC). Everyone assumes they understand what it is but very few people have come to grips with how it’s calculated. In this short series of articles, I will pull apart EPC and show how it’s calculated so you can be in the know.

I was inspired to dive into this topic largely because I read a thread on a forum recently and it was clear that there were a lot of misconceptions about EPC that needed to be cleaned up.

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I need to apologise for some of the maths in this series. The domain monetisation industry lives and dies by numbers and there's just no getting away from them. I should also say that domain parking is very much alive and well. The main reason for this is advertisers want our extremely valuable traffic.

So let's get too it! We need to define Earnings Per Click in terms of a mathematical formula….it’s initially not that complicated so don’t panic.

EPC = Revenue  /  No. of Clicks

This seems pretty obvious but we need to dig a little further into the definitions of both Revenue and Clicks.

When you look at your stats for a domain at a parking company you are seeing the AVERAGE revenue the domain makes across a period of time. The shortest period of time that can be viewed is one day but it’s still an average.

I’ve seen domainers complain continuously about the fact they seem to earn a large amount on one day and a small amount the next for a particular domain. There is a second factor that comes to play in this averaging process.

A typically parked page has up to ten advertisements being displayed and generally speaking the advertiser at the top paid more for their position than the advertiser at the bottom. For some market verticals the discrepancy can be really large with the top advertiser paying a large amount per click and the bottom advertiser paying pennies.

Everyone seems to assume the demand curve for a keyword is completely horizontal and yet this couldn’t be further from the truth. In some cases, there is a sharp drop off in the price willing to be paid by the advertisers for the domain traffic. An example price/demand curve could look like the one below.

Demand curve

The sharp drop off means the EPC paid would fluctuate greatly depending upon where a user clicked on the page. Typically speaking the higher EPC advertisements are placed at the top of the page and the lower paid advertisements further down the page…..but with Google’s move to psychographic targeting of users this isn’t always the case (and this complicates things immeasurably).

There is a different shaped curve for every market vertical and sub-vertical for that matter. This will greatly influence the dynamic nature of the EPC rates.

In the example above, a low traffic domain means fewer clicks on the page and the averaging would not be felt as much. This would create the wild fluctuations in the EPC rate that many domain investors currently experience.

For example, let’s imagine there was a single click on the page that paid out $10, this would mean the EPC was $10. Compare this to six clicks that paid $10, $10, $5, $5, $1 and $1 that would then have an average EPC of $5.33. In the first example if there was a click of $0.10 of then there is a large decline in the EPC but if there was a single click of $0.10 in the second example the EPC moves down only a little to $4.59. It’s a simplistic example but it shows averages at work.

Sliding epc rates

One of the many challenges that all parking companies must deal with is bot clicks or even worse, fraudulent clicks. These clicks should be stripped out otherwise advertisers would be paying for clicks that have no opportunity to generate revenue.

Because all parking providers apply different filters to their click traffic the “No. of Clicks” or denominator can vary greatly from one provider to another. This also means you can’t compare one provider’s EPC versus another provider.

So now we have an approximation for the EPC and the formula will look like.

EPC = (Total Revenue Over a Period of Time)  /  (No. Clicks x Parking Company Filter)

In the next article in this series I'm going to really dive into the mathematics that make up the EPC and prove why conversion is so important for all domain owners.

Greenberg and Lieberman

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Saturday Musings - I've Crossed A Line

Saturday Musings - I've Crossed A Line

Yesterday, I crossed the line of no return. I sometimes wonder what it would be like if I could somehow undo what happened but then, with a smile on my face I really don't want to. You see, yesterday was the day when our youngest daughter turned eighteen and in Australia, became an adult.

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I remember like it was only yesterday when I held her in my arms for the very first time. The wonder in her eyes as she looked around the hospital delivery room and then she finally fixed on my own.

We both soaked in each others features, I her father and she my daughter. So yesterday I looked at not a little baby but a beautiful grown women, full of life and excitement for the years ahead. An almost mystical spark of love sprang between us.

When I look at her today, she seems to continue to look innocently around at the world in wonder....and then our eyes meet. Like eighteen years earlier, the bond of love between us is as strong as ever. I'm her father and she's my daughter.

But I’ve crossed a line. I no longer have children who are children but children who are now adults. Somehow, though all of our life’s ups and downs my wife and I have watched as three babies transformed into adulthood…..and now our last is no longer a child.

I'm so proud of each of my children, for the adventures they're going on, devouring life with a ferocious appetite. If life is a theme park, each of them are definitely riding the rollercoaster rather than playing it safe on the merry-go-round. You only get one shot at life, so you may as well enjoy it.

So when I looked at Elise yesterday, I found I had conflicting emotions. Happy for her but sad that those childhood years are now behind us. So rather dwell overly long in the past I begin to think of the future and the possibilities it will bring. Grandchildren! It was then that a smile spread across my face…..the cycle of life continues…..so maybe there was no line after all.

Have a great weekend!

PS. I should mention, that my wife Roselyn and our two daughters will be at NamesCon in January…..we look forward to see you all then!

Greenberg and Lieberman

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What is Quality Traffic?

What is Quality Traffic?

Many people talk about having quality domain traffic but what does “quality” actually mean? In this article, I’m going to attempt to unpack "quality” and from who's perspective.Escrow.com

Domain owners often confuse quality as being a measurement of the level of real human versus bot traffic. On the other hand, advertisers define quality as traffic that converts for them. Who is right and are these sensible definitions for quality?

Recognised versus unrecognised traffic is the ratio of the views over the URLs for a domain name. Remember views are what the parking companies report while URLs are the unfiltered raw traffic for a domain. This is also the measurement of how much traffic is effectively dropped by a parking company as they deem it either a bot or unacceptable for one or another reason. The assumption is the greater the ratio of views to URLs the better the traffic quality.

Let’s imagine I have a views to URLs ratio of one (ie. A perfect score). There are a number of other filters the traffic flows through before an advertiser deems a traffic source as containing high quality. Let’s break these steps down.

A user clicks on an advertising link.

A domain with a high Click Through Rate (CTR) suggests there is an appropriate match between the traffic (ie. Users) and what is being displayed. The user is enticed to click on an advertisement to find out more information.

If the user was interested in games and the page had mortgage advertisements, then there is a mismatch and the CTR would reflect a lower number.

This sounds pretty obvious until we consider that a couple of years ago Google changed their advertising from being context sensitive to psychographically targeting the end user. In other words, previously if a user went to beds.com they would see bed related advertisements. This has now changed so that if I go to beds.com, it may also display hotels for Bali because Google knows I’ve been searching for a good vacation spot.

This also means we can't judge the content of a parked page simply by going to it ourselves....which is a little disappointing because it was so easy in the past to match the traffic to the advertisers.

Advertiser’s Website Convinces User to Begin Buying Process

After clicking on the advertisement, the user is faced with the sales pitch to entice them to buy the product. This is completely out of the hands of the domain owner that sent the traffic but is an important part of the overall quality process from the perspective of the advertiser. The goal is to have the user begin the purchasing process by adding the item to their shopping cart.

User Pays for the Shopping Cart

The advertiser only earns money when the user puts their hand in their pocket and actually pays for the shopping cart. Without this singular event no advertiser would ever buy any advertising. This is one of the reasons why advertisers regard converting traffic as quality traffic.

If we were to take these steps and create a mathematical formula, then it would look something like this:

URLs X Parking Filter = Views

Views x CTR X Click on Specific advertisement = Traffic to advertiser website

Traffic to advertiser X % Who Complete Purchase action = Shopping cart filled

Shopping cart filled X % of people that pay = sale

This means that a sale is a fraction of the total URLs that first went to a domain name. An advertiser is often blissfully unaware of many of the intermediate steps and focuses their attention on their total sales divided by how much they paid in advertising. This provides them the gross return on their investment. This is a simplistic view but it will do for illustrative purposes.

The problem with this whole process is quality is being defined in terms of sales. What happens if the advertisers pitch attracts the wrong type of potential buyer? What if the sales pitch on the advertiser’s website is really poor? What if the advertiser’s website just looks horrible and has a clunky shopping cart system?

There are so many factors that go into the sales event that are out of the control of the domain owner so why should the domain owner suffer? Ultimately it’s because the advertiser is the one that pays the cash.

So what can a domain owner influence? The only thing they can do is potentially increase the CTR by better matching the contents of a page to the advertiser…..but as we discussed earlier this has largely (not completely) been circumvented by Google’s psychographic targeting systems.

What some domain owners have done in the past is pick up their traffic and move it one hundred percent to a direct advertiser that will hopefully value it. For example, this means taking your travel traffic and pointing it at a travel website.

This all makes some sense until you look at things from the advertisers point of view. Previously, the parked page and clicking process effectively acted as a filter for those people who were interested in the products/services being advertised. Why would you click on an advertisement unless you at least mildly interested? By pointing all the domain traffic this filter is no longer in place.

If the advertiser was paying Google $2 per lead previously then they will be forced to place a discount on this to accommodate the disinterested traffic. This is very likely to trend to the CTR for the domain. Which is another way of saying, “I don’t want to pay for the people that didn’t want to click in the first place.”

If the CTR was originally 20% then the advertiser will pay 20% x $2 = $0.40.  This may be greater than what Google less the parking company commission was paying the domain owner for the traffic. So it may still be worthwhile for the domain owner.

Advertisers may pay more than this figure because they are after volume. Essentially it’s paying a premium to the domain owner because the domain owner can provide a large amount of business. This is a potentially a great result for both parties.

The problem most domain owners have is they don’t control enough traffic in any single market vertical to make it worthwhile to establish these secondary relationships. The advantage with working with a traffic aggregator is they can pool the total traffic from multiple domain owners and send it to individual advertisers. It’s the economies of scale at work.

This all brings us back to the definition of quality. It’s clear there are different definitions depending upon whether you are a domainer or an advertiser. Ultimately for true direct navigation there is no such thing as quality but only results.

The single biggest challenge that domain owners experience is we have very little insight into what domain traffic converts and what doesn’t. If this was provided in our daily statistics, then we could truly value our traffic from an advertiser’s perspective. Maybe we'll get this one day but I wouldn't hold my breath!

Greenberg and Lieberman

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Saturday Musings - What Does it Mean to do Good?

Saturday Musings - What Does it Mean to do Good?

So many of us in the western world believe that if we do “good” then things will be all right now and hopefully in the afterlife. I’ve been contemplating this concept of doing good and to be quite honest with you I’m a little confused.

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The problem I’m having is that “good” is a subjective term and something that is good for one person may not be for another. Each one of us views the world from our own perspective and cultural background and this taints our perception of what is good.

An extreme example of this is ISIS. They believe they are doing good by blowing up archaeological sites, beheading infidels and bringing their own unique brand of Sharia law to the masses. It’s clear that many people agree with their position and are even willing to put their lives on the line….but does this make ISIS good?

Maybe if you reach a critical mass of individuals that believe as you do, then could you regard what you’re doing as good? If that was the case, then Stalin, Hitler and Mao Zedong would be regarded as saints as they had millions of people following them while they slaughtered millions themselves. I’ve concluded that doing “good” isn’t at all about populist opinion but something else entirely.

Over the last few months I’ve been watching the presidential election unfold in a most astounding manner. Each candidate firmly believes they are the one that will do the most “good” for their country…..this is despite the fact they seem to be trying to prove the other candidate is evil. So maybe a person can be defined as being good by doing less evil? Now we have the conundrum of defining what is evil…..so essentially the flip side of the coin for “what is good”.

Then we have terms such as; “you’re a goody two-shoes” and you’re just “holier than thou” as vain attempts by one individual to try and redefine a person’s personal view of what is good through ridicule. There is essentially a clash of values that has denigrated the conversation to low levels of disrespect….just like in the presidential debates.

There is a liberal way of thinking that has encroached into society that says, “I don’t care what you do as long as it doesn’t impact me.”

It’s an isolationist view of society that builds gated communities, high walls around houses and neighbours who are strangers. At its heart, people who subscribe to this world view have relinquished their right to define what is good and bad until it directly impacts them. Society can be in complete anarchy as long as their walls are high enough and if they are encroached these people will typically define good at the end of a gun.

The problem I see with people defining their own view of “goodness” is that it will vary from one individual to another. Some people will believe its fine to prop up the stats of a domain name with purchased traffic prior to selling it while others believe it’s fraud. Who’s right and who’s wrong in this situation? This forced me to look to the law for some sort of definition of proper behaviour and hopefully “goodness”.

Sadly, the law spends a lot of time defining bad behaviour but not good….in fact, it is largely silent on what’s good. If a person robs a bank, then that is regarded as bad but if you help an elderly person across the road you don’t get some sort of reward from the government.

There is some hope in the law. The mere fact that the law is defining what is bad would suggest that it has some basis in what is good….even if it is silent. Where did the law get its views of right and wrong? This is where I’m forced to acknowledge the fact that the western law (and many laws around the world) largely have their roots in a faith or faiths. In the case of the west, it’s the Judaeo Christian world view.

Whether you are a person of faith or not, one of the fundamental structures of our society has its roots in faith……the reason for this is because it was through faith that our forefathers defined “good”. This means that each day we are all acknowledging there is an external authority that defines good and has defined goodness for each an everyone of us…..WOW, now my heads spinning!

I’m also faced with the fact that most of us seem to be able ascertain what is good through our conscience. Forgetting the outliers in the statistical distribution (eg. ISIS etc.) we seem to know what is good when we see it. But how did this happen and where did our conscience come from? Did it, like our laws, come from a divine authority? I will leave that for you to dig into in your own times of contemplation.

What the basis in the law and our conscience have in common is a bedrock of perceived “goodness” that is not defined by individuals who have differing world views. Goodness is locked down by a spiritual perspective on a common definition of good. This is a great comfort as it means when I’m doing some business with a person there is a clear way we should conduct ourselves. In fact, in business there is a term, “bad faith”. This is when a person is not behaving in a “good” manner to increase their own personal advantage.

I know for certain that I will be thinking a lot more on the topic of “What does it mean to do good?” I hope you also feel challenged in reading this article on your own personal views.

Have a great weekend!

Greenberg and Lieberman

 

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