Discussions and blogs that relate to the monetisation of domain traffic.

Part 6 - Portfolio Optimisation - Traffic Domains

Part 6 - Portfolio Optimisation - Traffic Domains

If you remember from previous articles the normalised RPM allows us to precisely compare one monetisation provider versus another.

This metric is VERY different from the traditional RPM that is often used more as a marketing tool than an actual unit of measurement. The normalised RPM is the revenue from every monetisation source divided by the raw unfiltered traffic, times by one thousand.

nRPM = Revenue / (Raw Traffic) x 1000

Escrow.com

The chart below is one that shared at Domaining Europe and highlights a number of opportunities for domain investors. The first is on average, direct advertisers pay considerably more for traffic compared to Google based sources.

Normalised RPM chart

This should be no surprise but one of the problems that many domain owners have is they don't have the scale to access these larger payouts. In addition, the majority of monetisation sources are obligated to send the traffic to a potentially sub-optimal solution (eg. Google) so the traffic never gets exposed to the direct advertising networks.

What the chart also displays is each of the parking providers in the sample have massive swings in their average payout levels each day. This is contrary to what many people would expect.

The second chart shows what percentage of the traffic each company is winning over time for the portfolio being measured. The first thing you will notice is that although direct advertising networks pay more, they only pay more for a small amount of the traffic. The reason for this is they don’t have the breadth of advertisers that Google has…..but this is beginning to change.

Percentage of Traffic Won

What can be seen is no company wins more than 35% of the traffic on any particular day. This means the best case scenario that you have with leaving all of your domains with one company is 65% of the time the traffic could perform better elsewhere. Remember, that’s the BEST case scenario. The reality is typically much worse.

Both these two charts also show that every company wins some traffic. So moving all of your domains away from every company is a bad idea. The best thing to do is to drive the right traffic to the right company at the right time. For whatever reason, each of the parking companies being tested performed really well on a subset of domains….the challenge is the subset is often a moving target.

The third chart shows how a typical domain’s traffic could be routed across an eighteen-day period of time. Each row in the chart represents three days. What it shows is how the traffic is routed based upon the normalised RPM being generated for three parking companies. This is a sample of one domain and it should not be construed that one company is better for ALL domains. As can be seen, at the domain level the swings in who is winning is quite dramatic.

Traffic Routing For a Domain

The case for routing your traffic with a technically proficient company is incontrovertible. Building systems, yourself is an enormous undertaking and I would highly recommend against pursing the investment in time and money so that you can focus on other endeavours.

The fact is if you wish to extract the maximum amount of return from your traffic then you need to pursue a course of action that leads to intelligently routing your traffic across multiple monetisation solutions. If you don't do this then you're leaving money on the table.

In the next article I will begin unpacking how to run a properly constructed traffic test as part of your overall portfolio optimisation strategy.

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Part 5 - Portfolio Optimisation - Traffic Domains

Part 5 - Portfolio Optimisation - Traffic Domains

So far we’ve touched on a number of aspects of building a domain into a solid business. Obviously we could spend years on that topic but what I would like to do is move onto the second segment in our portfolio optimisation – traffic domains.

Many people believe that generating revenue from domain traffic is dead and buried…..nothing could be further from the truth. The real issue is to assess what you are doing now which is different to what you were doing in the past. If you keep on doing the same thing as you’ve always done, then don’t expect your revenue line to increase.

Escrow.com

Increasing your revenue from traffic has moved on a long way since the humble days of putting all of your domains with one parking company and then collecting a cheque. As one of the founders of ParkLogic, we’ve been optimising domain traffic for clients for nearly a decade and the sophistications of the real-time algorithms for routing traffic has grown considerably.

Let me say from the outset that optimising domain traffic is not a trivial exercise and has moved a long way from making decisions via a spreadsheet. To extract the full value out of your domain traffic routing decisions must be made on a real-time basis. If they aren’t then you are making sub-optimal decisions and leaving money on the table.

There are a number of ramifications to real-time traffic switching. Like any industry, the traffic side of the domain industry has evolved into two camps. Those that outsource their traffic optimisation and those that try to do it themselves.

Even if you have the expertise and the knowledge to be constantly working away at systems you would have to be crazy to invest in building your own traffic optimisation platform. Rather than managing a simple agreement you’ve now taken on the responsibility for an entire technology ecosystem that has real costs associated with it. The opportunity cost and distraction of managing such a platform is considerable.

For example, as many of you know, I’m a fan of the CRM platform, SalesForce. A major reason for this is I know that every single day I have literally thousands of developers working on my behalf to improve and maintain a platform I use extensively. The marginal cost I pay out each month is inconsequential compared to if I decided to build my own CRM. I’m getting a growing benefit for no additional effort or allocation of resources.

Likewise, by completely outsourcing your domain traffic optimisation you are getting a platform and a team that is constantly thinking about how to improve your results for you each and every day. I can’t speak for any other companies but I know that the number one issue for us is how to increase a client’s revenue from their traffic.

When you outsource your traffic revenue you need to be confident the company is doing the best job possible at every instant in getting the most from your traffic. More than that, they need to be able to prove it. This means that there needs to be real people, doing real work on your behalf that you can reach out to if you have any questions.

In the next article on traffic optimisation I'm going to dive into some compelling  numbers from a sample portfolio that prove the benefit of routing traffic to maximise revenue. For the first time ever I made the decision to expose some of our numbers in a presentation that I made at the recent Domaining Europe conference.

Over the years, many people have said to me that it really doesn’t make a difference what parking company you use as long as they have Google as their backend. The data in the next article proves that this assumption is false.

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mgilmour
Sorry for the delay in responding to your comment Jeff. The key factor with genuine domain traffic is that it's valuable because ... Read More
29 July 2016
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Part 4 - Portfolio Optimisation - Products and Services

Part 4 - Portfolio Optimisation - Products and Services

In this series of articles, we are looking at how to optimise your domain portfolio across the different business models of sales (big and small), traffic and development. The first model I have been unpacking is development, not the technical aspects but the business aspects of domain development.

We’ve explored why people return to websites and how to earn money from advertisers. In this article I will be discussing how to build an online business selling services and products.

Escrow.com

The first thing we need to separate out is the different between building a business and conducting a transaction. Building a business is all about repeatable revenue that ideally grows over time while transactions are the big deal you hope to get one day.

My wife has a great saying, “Like clockwork.” What she means by this is that she would much rather have twenty dollars each month coming in from a customer than the big deal that may happen one day.

After attending a domain conference and hearing all about the great big things people are doing (most are not true btw) it’s easy to lose sight of what is really driving your business in the quest for the big deal. This is particularly appropriate for selling services and products. Don’t get me wrong, I love the big deals but they just take up so much time and have about a one percent chance of coming off.

So why am I a big fan of my wife’s saying? It proves a number of things about your new online business:

  1. You have traffic.
  2. The traffic is the correct type because it’s purchasing your service/products.
  3. Each month the revenue has the potential to grow with more subscribers.

Once you have these items in place all you need to do is repeat as many times as possible and ensure that the backdoor is closed. If two things happen, your business will then have no choice but to grow:

  1. You get more of the same type of people to your website.
  2. Your existing customers continue to keep their subscription/buying habits in place. This is the ultimate endorsement of your product/service.

Of course, I’m working under the assumption that you have your pricing right and that your customer acquisition costs don’t put you into a loss making situation.

People will subscribe to services/products for a variety of reason but generally speaking it’s because they can’t get the service/product from elsewhere. Associated with this is whether the new customers trust you enough to part with their cash. One of the problems that many news websites are experiencing is there is always another website where the same content is for free.

Let’s imagine that I decided to charge for access to my articles here on my blog. My guess is a few people would subscribe while the vast majority would write horrible things about me in the forums. My advertisers would abandon me and whizzbangsblog would become a shadow of its former self…..so I’m not too excited about this idea.

This raises an important issue that newspapers from around the world are wrestling with. When you’ve given something online away for free it’s really hard to then start charging for it. So going free is great as long as it’s in line with your overall business strategy.

In my case, I’m happy to write articles and share my experience with people because I believe in giving back to my industry and my sponsors like it. Although, if you have quality unique content that isn’t just a regurgitation of everyone else’s then you may get away with a paywall.....but it had better be really good content!

So let’s imagine I’m wanting to increase my revenue through some sort of subscription basis. What I may do is have premium content that is behind a paywall and leave the blog articles as they are. This strategy is used a lot in the software industry where you can have the free version of some software which has a few features or pay an annual subscription for the full version.

Another thing I could do is provide something completely different from my blog posts. For example, for twenty dollars a quarter I’ll automatically send you an awesome T-shirt with a really funny domain related statement on it or a domaining mini e-book/newsletter to help provoke your thinking about your business.

Better yet, why don’t I put together an online training course that takes a person from a novice domainer right through to a masterclass level. The course will include videos, notes and assessment so that it has some standing in the domaining community. There’s many different ideas you can adopt for your online business but my advice is you should test the market prior to investing a huge amount of money.

Two really interesting areas of subscription earnings that are only recently being exploited are subscriptions to highly targeted educational courses and products. For example, if I shaved with a blade I know that would love the concept of receiving new blades each month via a subscription service.

A couple of years ago I was listening to a radio show about guys and clothing. I couldn’t resist calling up the show and explaining to the presenter that I would love to subscribe to clothes. I hate going out to buy clothes and most of the time I just want to buy the same pair of jeans…..why not have a subscription for jeans?

I hope that you get the sense that all of these ideas are examples of subscription services. Just for the record, I have no desire to do anything with whizzbangsblog in that area…..I have enough on my plate!

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Part 3 - Why Domain Portfolio Optimising Works - Advertisers

Part 3 - Why Domain Portfolio Optimising Works - Advertisers

Obviously there are a great multitude of business models that you can apply to your development project. Remember that we are looking at developing one of our domains into a business as part of our portfolio optimisation. The first business model that we will examine is advertising.

Escrow.com

In this business model you are trying to ramp your traffic so that it becomes worthwhile for advertisers to spend their money to reach your audience. A couple of things about audience, you can either provide mass numbers or the right people to advertisers. For instance, Whizzbangsblog doesn’t have millions of people visiting it every day but it does have the right people in the domain industry. This is valuable for sponsors.

With your new development you need to choose your approach and go mass volume of advertisers or a select few. If you have a mass of advertisers on your pages, then readers may revolt and advertisers won’t pay the big dollars. Less advertisers will potentially allow you to charge a higher rate and keep the readers onside. It’s a balancing act and it really depends upon your market vertical.

Remember that one person’s advertising can also be another person’s content. This is often the case in hobby publications where the advertising is just as valuable as the articles to the readers.

Unless you have huge volumes of traffic then I would recommend staying clear of selling on a cost per view basis. Likewise, any other performance based advertising (eg. Pay per click) may not be suitable for a business you’re launching out of the gate. A reasonable charge per month is often palatable for advertisers as well as provide some necessary initial cashflow for your venture.

As you write your content what you really want to do is provide value to your sponsors/advertisers. For instance, I use both Escrow.com and Epik and I wouldn’t have a problem recommending them to readers. You need to be careful that you’re not writing advertorial pieces but sharing your own experiences of using their products and services.

You can add a lot of value beyond a banner on a webpage. For instance, earlier this year I conducted a video interview with Jackson Elsegood from Escrow.com about some of the developments that he’s introducing at Escrow.com. Likewise, I will be interviewing Rob Monster from Epik about what he is working on at Epik. If you are looking at adopting this strategy, then the number one issue that you should be focused on is whether this is providing value to readers. There’s no point in conducting an interview that’s merely a sales pitch.

On the flipside of the coin, the ultimate mass volume model is a directory. Once again the biggest challenge for anyone building a directory isn’t the actual building (there’s lots of directory software available) but getting the high volume of traffic to the directory so that advertisers get a return on their investment. As an aside, as a directory grows they can often morph into market vertical or hyper-local search engines…..hence why Google is very interested in this market.

So there are a lot of decisions that need to be made with the advertising business model but they all tend to boil down to providing value in the form of highly qualified traffic. The only way you will keep your traffic is if you are providing reasons (see the previous article) for people to return to your new business. So be really careful in looking after your audience....they have a lot of demands on their time and for them to spend some of it with your new venture is a privilege and should be respected.

In the next article we will look at products, services and how building one of these businesses isn’t actually as hard as you may think.

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mgilmour
Hi Elliot, Thanks for the heads up on the links! I'm still wrestling with getting rid of the index.php......I think it's a weekend... Read More
05 July 2016
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Part 2 – Why Domain Portfolio Optimisation Works – Development

Part 2 – Why Domain Portfolio Optimisation Works – Development

In this article I will be further expanding on how to develop a domain into a business. This is the first business model that can be applied to domains, the other three are monetising traffic, treating domains as stock-items and the last selling domains at high values.

The first issue for me with any developmental project is working out how the domain is going to make money. This seems like an obvious question but many people approach developing a domain from an aesthetic perspective (ie. pretty website) rather than being focused on the business outcomes.

Escrow.com

Generally speaking, all business models hinge on getting not just new traffic to your website but repeat visitors. A repeat visitor is gold as they perceived a value in your site enough that they returned for a second look. It shows that there is something about your business offering that they want.

So here are some reasons why people will return to your website.

Information
Users want to get access to information that you provide. This could be anything from technical documentation right through to an online training course or even an online newspaper.

Opinion
You and your business has developed a significant enough reputation that people are interested in what you have to say on issues, products and services. Before I buy anything I like to do my research by reading reviews on the product I’m interested in.

For example, when I write an article on the domain industry I try and not just report the news but understand what is happening and provide an opinion.

Useful
Google is the ultimate useful tool that allows us to effectively find things on the Internet but there are many, many other tools. How about domain tools, whatsmyipaddress.com or geoipview.com. These are all tools that I personally regularly use.

With the introduction of cloud computing there has been a blurring of the line between a site being useful and one that provides a service….which is our next item.

Services
Users will return to a website because that website provides a great service that they are willing to pay for. A website that is useful is one that often gives their service away for free because they earn money in other ways (eg. Advertising). Salesforce.com is an example of a massive company that provides CRM solutions to businesses all around the world. Businesses can subscribe to their base offering and pay more for additional features. Will your new venture offer a billable service?

Products
Put simply, I’m Amazon and I want to ship you as many physical or digital products as I possibly can. Gaming platform Steam saw the transition to pure downloads and built a whole ecosystem around selling software to gamers. If you have an exclusive product that people want, then they will return to your website to get it.

Funny
In many respects a website that is funny is a subset of the information category but it’s so big a segment then it’s worthwhile commenting on it. Websites that are genuinely funny provide content that you find irresistible to pass onto your friends. The good ones often have massive traffic and drive large amounts of cash from being paid pennies per visitor by advertisers. The challenge here is to ensure your website remains funny and not just become old-hat.

Social
A social website is centred on a community where the individual members can share their knowledge and expertise with the wider group. The first social communities were built using forums and Internet Relay Chat. This has quickly expanded to fully functional Facebook like applications that you can instantly install on any Joomla/Wordpress website. Beware, since Facebook is the eight-hundred-pound gorilla in this space, this segment is often a difficult one to crack but if you can then there can be some really big dividends.

 

There are a lot of other different methods to encourage users to return to your new venture but the above list should kickstart your thinking prior to you spending a whole lot of money. As I’ve mentioned before, I’m a bit of a SEO cynic and believe that if you give people what they want then Google will love you for it as well. So really think about why a person should return to your new venture.

I should mention that when I build an online business, I’ll often do combinations of the above. For example, I may have a social website backed up with regular blogging on topics that people find informative….so don’t think that each of the above items are completely separate from one another.

Whatever you do, pay attention to your statistics and interpret what they are telling you. It’s rare that growth is the answer you want. What most new businesses need is the right type of growth. If at all possible, do whatever you can to engage with real readers/customers as soon as you can as they will tell you so much about your business that you never even thought of.

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finddomains
Hi Michael, You may not remember, but I have met you several times in Vegas and I would like to do business with you regarding my... Read More
29 June 2016
mgilmour
Hi Richard, I sent you an email.
30 June 2016
mgilmour
Hi Jeff, The .com domain is more natural for people to type-in BUT it is not the REASON why people will return to a website. It ju... Read More
30 June 2016
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