Domain Investors Benefit From Global Online Advertising Trends

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Each year, venerable venture capitalist firm Kleiner Perkins, releases a slide deck which has become the “State of the Union” for the Internet. Of the 294 slides, a number immediately caught my attention as they directly impact domain traffic monetisation.

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There are over 3.6B Internet users in the world which represents 49% of the world’s population. The growth in the number of new Internet users getting online is slowing from 12% in 2016 to 7% in 2017. Eventually, you would expect the rate of growth to asymptote at the rate of population growth globally.

What this shows is the Internet is the single largest marketplace in the world and more than that....it's accessible by everyone. Natural type-in domain traffic should continue to increase at similar rates to the overall growth rate. User sophistication and technological innovations will and has impacted this rate of growth. The challenge as always been how to best remove the junk traffic from the real traffic.....more on this in a future article.

Internet User Growth

Internet advertising spend for 2017 in the USA continued to move upwards by 21% to a peak of $88B. Since the growth in the number of online users in the USA is almost flat the value per user from an advertiser’s perspective is continuing to increase. This will place an upward pressure on EPC rates and make domains with traffic that much more valuable.

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Domain Traffic Monetisation Continues to Grow

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For those of you that listen to the naysayers and believe that monetising your domain traffic is dead then think again. The reason why domain traffic continues to be valuable is because advertisers want to reach potential customers.

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This demand for quality traffic has continued to increase while the volume of high value traffic has decreased as domains were dropped. Since the supply is diminishing and the demand increasing then the price paid for the traffic has gone UP over the last few years.

The question has to be asked, “If the price being paid by advertisers is going up then why are most domain investors experiencing a decline in their traffic based revenues?”

The answer is really simple. The advertising aggregators (of which Google is the largest) is taking a bigger slice of the pie. Ask yourself a really simple question, “How much of your earnings are exposed to Google?”

If the answer is “a lot” then don’t be surprised by the decline in your earnings. Albert Einstein said the definition of insanity is doing the same thing and expecting a different result. Are you doing the same thing as you’ve always done?

So how do you get an improvement in your results? I like to think about this in a similar manner to the gold rush. Many years ago, a farmer stubbed their toe on a rock, only to discover the rock was a nugget of gold. This was like the first domain investors monetising their domain traffic. It was an awesome time of easy money!

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mgilmour
That is true. What Google does have is a breadth of advertisers. I think this competitive advantage will be eroded over time but i... Read More
30 May 2018
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Saturday Musings - Reaching a Goal

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During this past week I watched my wife, Roselyn, cross the finishing line of a thirty-kilometre charity walk. I was incredibly proud of her achievement as it was the culmination of a large amount of sacrifice, hard work and dedication.

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I remember when Roselyn first told me that she would like raise funds to save people’s eyesight by participating in the CoastTrek charity walk. Once the decision was made she quickly developed a laser focus to her achieve the goal.

Goals are amazing things. They can inspire us to new heights as we stretch the boundaries of what we thought was possible. To be worthwhile, goals need to be big and audacious! They are also personal.

For example, if an Olympic marathon runner signed up for the thirty-kilometre walk they would probably view it as a bit of a warm up. What they need to inspire them is something much longer over as short a time as possible. In the case of my wife, she’d never done anything like this before and for her it was definitely BIG!

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Saturday Musings – Sahar Sarid, Guilty Until Proven Innocent?

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I’ve been watching the Internet explosion of interest surrounding the news that prominent domain hall of fame recipient, Sahar Sarid, has been charged with a number of serious crimes relating to mugshots.com. If you read the many articles and forum posts you would assume the trial has already happened and that he, along with his three associates are guilty…..

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I find it really sad that in this day and age the lynch mob is alive and well as they leap into action to grab their burning torches and pitch forks by vilifying a man before the trial. I would remind everyone that Sahar IS innocent until his guilt HAS been proven in a court of law. All we know at this time are the charges and not the outcome.

I should also say that I find the business model surrounding mugshots.com to be unethical (and if proven, illegal) and one that I personally would not have anything to do with. That being said, under our legal system Sahar is granted the right of the presumption of innocence and his guilt must be proven.

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vanclute
Unfortunately this is exactly the world we live in now. The Court of Public Opinion is the one that matters most, and once it has... Read More
21 May 2018
mgilmour
I completely agree with you. The role of a defense attorney should be to assist in revealing their clients truth and not obviscati... Read More
21 May 2018
mgilmour
I agree with you Chris. We need to be aware that our actions can often have negative impacts on others. The goal of the courts is ... Read More
21 May 2018
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Was GDD in Vancouver Worth the Trip?

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As I write this, I’m sitting in the LAX Qantas club, wearing my traveling clothes of loose jeans and a really comfortable Escrow.com T-shirt that I picked up when I visited their office in San Francisco on the last trip. I’ve just had a shower before the long-haul flight to Melbourne and I find myself in a bit of a reflective mood…..was the trip to Vancouver and the GDD conference really worth it?

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In terms of a conference, the simple answer is, I don’t really know. I didn’t get to any of the sessions….in fact, I don’t even think I knew where they were being held. Given the flow of people I believe they were down some long hallway.

What I do know is the people at the ICANN GDD event were top notch. It appeared that all of the movers and shakers of the new gTLD space were present. There were representatives from registrars, registries and a whole host of ancillary businesses from all over the world were present. The reason why I didn’t get to any of the sessions was because I ended up in back-to-back meetings. The best thing about the meetings was the fact that most of them were outcome focused rather than just another chin-wag that goes no where.

I would like to highlight both Kevin and Lars from dotICU (I-See-You). They are two of the founders of dotICU and they both worked incredibly hard speaking to registrars and others about the new extension.....it's clearly an enormous passion for them to evangelise ICU. If their work ethic is any indication of success then I’m sure you’ll see many ICU domains cropping up in the wild.

I also had the privilege of spending some time wth Andrew Allemann from Domain Name Wire (DNW.com). I’m sure he will provide his perspective on the event. For those of you that don’t know Andrew, he’s been writing about domains for around a decade and a half and provides an excellent service for the industry.

Of course it was great catching up with my many friends from around the world. One of the great things about the domain industry is I now have friends in just about every city in the world.. How great is that!

I stayed at the Hilton hotel and the elevator numbers were a lesson in CHiP domains. If you take a close look at it there are a number of floors missing; If you look carefully, you'll find that floors 4, 13 and 14 aren't accessible as it would be bad luck if you ended up on those floors. Either that or there is some secret organisation hidding on those floors....LOL!

Yes, there was a lot of business conducted but I found that in many cases it was more a meeting of minds of friends rather than a sales effort. I think that I will definitely be attending the next GDD and I wouldn’t be surprised if it continues to grow into one of the preeminent ICANN conferences for the year.

I’d better finish up as I think my flight is just about to be called.

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