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Finding the Gold in Domain Traffic

Finding the Gold in Domain Traffic

I’ve had many domain investors ask me what is the difference between domain traffic monetisation now versus five years ago. The best way to understand this is to use a simple mining analogy.

During the gold rush floods of people poured onto the gold fields in search of their dream nugget that would make them rich. They looked everywhere and in a number of cases, individuals found a mother-load of gold. 

Then someone came up with the great idea of using a pan to “pan for gold” in creeks. They worked out that heavier gold nuggets would wash into the deeper parts of the creek and all you had to do was sort out the gold from the other rocks. More miners struck it rich with this innovation and gold fever seemed to be catching!

Escrow.com

This is very similar to the early days of parking domains. Initially, all you had to do was find a domain with traffic and point the DNS to a parking company. Magic happened and you received a cheque each month.....cash was raining into the industry!

Now let’s move on with our gold rush…

As gold became more difficult to find miners moved from the creeks to digging shafts into the sides of mountains. They’d pull out the rocks and use a sluice to wash the muck to pull out the gold. The new sluice technology was incredibly innovative and made previously unprofitable mines viable.

In the domaining world it didn’t take long for individuals to realise that by using a complicated spreadsheet and a heap of “look-up” statements they could point some domains to parking company A while others to parking company B. This would then potentially increase the revenue but it required a lot of manual labour. It's the sluice but not full automation.

So where is the domain industry now compared to the gold rush? Right now, to extract all of the domain-gold we are driving shafts six miles deep into the earth’s crust. The crust is actually mass data and systems that plough through the muck and extract the gold.

So this brings up an interesting point….where are you in the spectrum of the domain gold rush?

Are you still putting all of your domains with one parking company because it’s easier? Are you using a traffic splitting system or are you digging into sophisticated analytics each and every day to extract every penny from the traffic?

If you are still parking all of your domains with one company then please let me know as I’d be reasonably confident that I could find a buyer that would be more than happy to relieve you of your portfolio. They would then take the domains and go up with technology curve to extract more value from the traffic.

Before looking at the following case study I will fully disclose that all of the data comes from ParkLogic of which I have a stake. I will also say that ParkLogic is a company that drives very, very deep shafts into the bedrock to search for domain-gold on behalf of clients.
 

Case Study

At the end of July a new client came to us with a portfolio to see if we could extract any additional value from their domain traffic. Prior to ParkLogic receiving the domains they had been using a commercial rotation company to send the traffic to a number of parking companies. The baseline data from May 2015 was around $145 per day.

The first chart shows both the revenue and trend for the portfolio. It’s obviously a pleasing result for the client with the revenue continuing to increase despite the typical downturn that's expected during the USA summer.

b2ap3_thumbnail_20150902_revenue.gif

The second chart shows the normalised RPM for the portfolio. A normalised RPM is VERY different from an RPM that is typically displayed in a parking company interface.

A normalised RPM is when the revenue is divided by the RAW TRAFFIC for the domain while an RPM is the revenue divided by the VIEWS. Why is this different?

Raw traffic is the unfiltered traffic that a domain receives while views is the raw traffic multiplied by some filter applied by the parking company. Since every parking company has a different filter then you get some very different RPM numbers that are quite often used as a marketing tool.

The fact that the normalised RPM trend is increasing indicates that more money is being earned for each piece of traffic. This is good news!

b2ap3_thumbnail_20150902_plrpm.gif

So what’s the bottom line?

By driving a really deep shaft into the data, so far, we’ve managed to increase the revenue for the portfolio by 27.35%.  I’m reasonably confident that over time the portfolio will settle down to around an overall increase of 40%.

Not surprisingly, these numbers actually hide the true results for the portfolio.

If we were to take all those domains that displayed the same level of traffic as the baseline then the increase for them is actually 84%! For domains that had at least 80% of the traffic the number is a 62% increase. In other words, if there is the same level of traffic for a domain we knocked it out of the ballpark. These numbers can be viewed in the below graph.

Percent

Every domain investor needs to ask a simple question, “Where am I on the technology curve?” If you are still “panning for gold” with all of your domains at a single parking company then the data clearly shows that you are not getting the full value for the traffic. I would recommend to at the very least get stuck into Excel and get the sluice working for you.

I will be attending “DomainFest” in Macau later this week and also “The Domain Conference” in Fort Lauderdale at the end of the month. Feel free to reach out to me if you would like to discuss this further.

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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.

 
DomainFest Macau - Here I come!
DomainFest Asia - not long now!

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Comments

impulse on 02 September 2015
Gold Rush

Great posting. You said we should ask ourselves "where are you in the spectrum of the domain gold rush?". But, the bigger question may be "where is the domain gold rush in the spectrum of of gold rushes?" As we know, all gold rushes end. It did not mean that gold mining was dead when that happened, it just became and more traditional industry and not a "rush" anymore. Is the domain gold rush over?

Great posting. You said we should ask ourselves "where are you in the spectrum of the domain gold rush?". But, the bigger question may be "where is the domain gold rush in the spectrum of of gold rushes?" As we know, all gold rushes end. It did not mean that gold mining was dead when that happened, it just became and more traditional industry and not a "rush" anymore. Is the domain gold rush over?
mgilmour on 03 September 2015
RE:Gold Rush

Thanks for that!
I know people that are still building traffic domain portfolios right now. The mining side of the equation is how to best monetise the traffic that these domains have. I actually think that there is a lot of life in the traffic area of domains.....but there are a lot of people that have a vested interest in talking it down :-)

Thanks for that! I know people that are still building traffic domain portfolios right now. The mining side of the equation is how to best monetise the traffic that these domains have. I actually think that there is a lot of life in the traffic area of domains.....but there are a lot of people that have a vested interest in talking it down :-)
vanclute on 03 September 2015
RE:RE:Gold Rush

Nothing to see here... move along...

Nothing to see here... move along... ;)
SonicNames.com on 05 September 2015

IMO The gold rush is like a wheel. When time passes, the rush / null takes replace each other. The change is stable and the change time is changing. So hoping for the best to come

IMO The gold rush is like a wheel. When time passes, the rush / null takes replace each other. The change is stable and the change time is changing. So hoping for the best to come
Guest - Shane on 05 September 2015
Hologramsex

Would be great to read any input on the best parking companies through the people who know such as you guys the domain owners you see so much hype but who do you find the best and fairest

Would be great to read any input on the best parking companies through the people who know such as you guys the domain owners you see so much hype but who do you find the best and fairest
mgilmour on 05 September 2015
RE:Hologramsex

Really interesting question and one that I may write a new blog on in the future. The problem with defining who is the best is that it changes regularly on a domain by domain basis. I'm quite pragmatic in that I only want the person who pays more than the other guy to get my traffic at a point in time.

Really interesting question and one that I may write a new blog on in the future. The problem with defining who is the best is that it changes regularly on a domain by domain basis. I'm quite pragmatic in that I only want the person who pays more than the other guy to get my traffic at a point in time.
Guest - Ruben on 07 September 2015
Good post

Hello!

I'm currently starting my parking experience and I'm using a rotation website, to send my domains do different parking companies. Still to early to evaluate.
Good post!

Best regards!

Hello! I'm currently starting my parking experience and I'm using a rotation website, to send my domains do different parking companies. Still to early to evaluate. Good post! Best regards!
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