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

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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How to do a Domain Traffic Test - Analysis 101

How to do a Domain Traffic Test - Analysis 101

This articles continues directly from the previous in the series on conducting a traffic test (click here to view). I then create a summary tab which pulls all of this data together so that at a glance you can see what’s going on. Since we create these packages of analytics for clients on a regular basis you’ll have to excuse me if I refer to the testing company as ParkLogic.

In the summary, you need to know the total amount of revenue (daily) earned by the testing company and the baseline. This will provide the lift above the baseline. In the case of the screen capture there is a $190.94/day increase which has then provided a 127% uplift versus the baseline. This is quite a good result.

Escrow.com

I then like to find out what was the maximum amount that ParkLogic was winning by per day. This is so that clients that wish to take all of the domains away can then leave the winners with us. In this case it’s $457.54 per day which isn’t that bad considering the baseline for ALL of the domains was $715.40.

In fact, if you leave the winners with ParkLogic and send all of the losers back to where the baseline source then the result should be $1172.93/day versus a total baseline of $715.40. In this case the result is a 64% uplift in revenue and only assumes that the baseline produces the same results as previously attained.

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How to do a Domain Traffic Test - Assembling the Data

How to do a Domain Traffic Test - Assembling the Data

When I was speaking at NamesCon in January I said that I would like to show the attendees the best computer game I’ve ever played. It has all the aspects of both a tactical and strategic game with a bit of time travel for good measure. Everyone leaned forward with expectation…

I then put Excel up on the big screen in the room. It’s safe to say there was a bit of laughter. Let’s think about it for a second, Excel allows us to answer questions about the performance of our domains like no other application can. We can view the past, compare it to the present and even predict the future.

Right now we are going to mobilise the data that we have arrayed from the previous articles in the series so that we can understand what is happening with our domain traffic. This will be a VERY high level view of our traffic test but I believe that it will help get some answers to our questions.

The first thing we need to do is to ensure that all of the baseline data is in the same currency as the testing monetisation source. Once this is done then we then need to convert everything to daily data. The reason why we need daily data is that it gets rid of the problems associated with 28/30/31 days in a month and also allows us to later compare the data against daily from the new testing source.

Next, create another tab in Excel and call this “Latest Data”. When capturing data make sure that you have multiples of 7 days so that any variability caused by the weekends can be minimised. All of this data needs to be brought back to a daily format so that we can then compare it to the baseline.

Make sure you check the DNS settings of EVERY domain in the test so that domains not pointed correctly can be removed. There’s no point in penalising a test by having domains with baseline data and no data from the testing source.

Now create a tab called “Analysis”. In this tab you need to add you complete list of domains in column A, Column B, C and D are for the baseline views, revenue and RPM. Columns E, F and G are for the new monetisation company’s views, revenue and RPM.

Now that the data is sorted out you are now in a position to conduct some analysis.

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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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How to do a Domain Traffic Test – What are you measuring?

How to do a Domain Traffic Test – What are you measuring?

“What are you measuring” seems like an obvious question when you are conducting a traffic test with a new monetisation company. From experience, most people get the answer to this question completely wrong.

When you are running a traffic test you are NOT seeing if you can earn more money. This may sound strange but it’s the simple truth. What you should be actually measuring is the capabilities of the new company to optimise your traffic for a better result. More money (although important) is merely a by-product of the optimisation activity.

Escrow.com

For example, we recently had a client place their domains with ParkLogic for optimisation and as time went by we just couldn’t beat their numbers. In fact, it seemed that the more effort that we put into the optimisation the worse thing became.

It was at this time that I had an epiphany (ie. a brainwave!). It just so happened that the client provided their baseline data in Euros from back in August and we were being benchmarked against these numbers. Since the ParkLogic system uses $USD we dutifully converted the baseline data from Euros to $USD when we received it.

The below graph tells you the story of the relationship between the Euro and USD during this period of time. The Euro has fallen from $USD1.36, when we did the initial conversion for the baseline data, to $USD1.09 (bank rate). That was a fall of 25%!

Exchange Rate

So the fact that we were providing the client around a 5% uplift wasn’t the real result at all. The real result was 5% + 25% = 30%. To clearly show this we applied today’s exchange rate to the baseline data so that we could clearly measure our optimisation efforts and nullify the impact of the exchange rate.

Another example is we were optimising a domain portfolio and the results were absolutely stellar! In fact, we were beating the baseline data by about 250%. Naturally, the client was really happy with the results but something was annoying me about the numbers….

A quick comparison analysis showed that one domain was getting a number of clicks paying $80+ each. We removed the impact of this domain as we did not believe that it was sustainable and redid our analysis. The uplift was still around 135% but I was more comfortable with this number being sustainable.

In both these examples, only paying attention to the money earned column would cause you to completely miss the actually impact of the optimisation effort. It’s not just the data but interpreting the data that is critical to getting the most out of your domain portfolio.

Another simple example is when you have domains that are seasonal in nature that affect the result. These should be removed from any analysis to determine whether the new company is actually adding value. They have the potential to either inflate or deflate the numbers and cause you to come away with a completely incorrect picture of the new monetisation company.

I live a breath numbers all day every day and I would like to say that I’ve seen everything…..but I know that I haven’t. When measuring the impact of any change you must first of all have a clear baseline and then have a metric that you can actually use to measure the impact of that change. It’s the art combined with the science that produces results….and both are constantly evolving.

In a future article I will begin to unpack what metric is critical for determining whether a new monetisation company is performing or not.

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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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