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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How To Conduct a Domain Traffic Test - Part 2

How To Conduct a Domain Traffic Test - Part 2

This is the second article in the series on conducting a domain traffic test. The first article can be read by going to: How to Conduct a Domain Traffic Test - Part 1

For the past 8 years I’ve been looking at nRPM (normalised RPM) numbers and routing traffic to the best solutions at any point in time. This has produced significant gains for clients and well worth the effort of getting messy in the numbers.

Escrow.com

So now that there is an agreed set of definitions for metrics what do we need to do to conduct a traffic test? There are two main approaches:

1.      Using baseline data

2.      Using the existing monetisation account

When conducting a traffic test most domain owners provide us with the previous month’s stats to be measured against. One of the problems with this is that we don’t have the raw traffic numbers to generate a normalised RPM. One of the good things is although the stats are taken from a different time period they can be useful in focusing attention on which domains are clear winners and losers. Regardless of the outcome we need to understand why we are winning or losing.

For example, what’s the point in claiming victory if the domain has twice as much traffic during the testing period compared to the baseline? Although good, it would be false to say that it was due to traffic optimisation.

For larger traffic tests it’s far better to adopt option two and run the test by integrating the existing monetisation account into the traffic mix and then sample around 20% of the traffic elsewhere. If the new monetisation sources win the traffic, then all of that domain’s traffic is then moved to the new provider.

For example, let’s imagine that you have all of your traffic going to an account at Domain Sponsor. You want to check out if they are still the best solution for your traffic so you ask me to setup a traffic test. The first thing we do is integrate your existing Domain Sponsor account into ParkLogic and then leave 80% of the traffic still flowing through to DS while we test other monetisation solutions with the remaining 20%.

So rather than having to move all of your traffic you are now only risking 20%. Remember that 20% will earn some money (hopefully more than DS) so your revenue risk is more than likely going to become a win. What’s even better is that we can clearly establish a nRPM for the traffic flowing through to DS and know beyond any doubt who is actually paying the best at that point in time.

With traffic optimisation it’s vitally important that each domain is reviewed and treated as a unique case. There is no point in optimising across an entire portfolio is you don’t also focus on the domains themselves. It’s like the old saying, “look after the pennies and the dollars will look after themselves.” The domains are the pennies and the portfolio is the dollars.

The next article will continue to unpack what metrics we focus on in a 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. 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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Buying and Selling Traffic Portfolios – Part 2

Buying and Selling Traffic Portfolios – Part 2

This is the second part in a series on buying traffic domain names.

Once you’re comfortable that the legal side of the portfolio has been addressed then you really need to dive into the traffic numbers and do some research into where the traffic comes from.

So let’s get back to basics. You’re about to purchase a traffic portfolio. The first question that you should ask is, “Where does traffic come from?”

Traffic typically comes from the following sources:

1.    Direct type-in

Generic or short domain (eg. Beds.com, gx.com.au)

2.    Typos

Typo of a generic domain (eg. Fruit spelt fruit)

Typo of a weak trademark domain (eg. Joespizashop.com instead of Joespizzashop.com)

Typo of a brand (eg. Verison instead of Verizon)

3.    Link based traffic

4.    Purchased

5.    Hijacked traffic such as tool-bars and NXD traffic.

In the above list of places where traffic comes from I’m making no attempt to try and pontificate on whether they are appropriate traffic sources. I’m only indicating that they are sources of traffic. So please do not get upset at the mention of typo, trademark, purchased traffic etc.

Many years ago I purchased my second domain name and it failed miserably to provide any sort of return. Each and every year I faithfully registered the domain to remind myself to ALWAYS ask the question, “Where does the traffic come from?” In my case, the domain had a lot of Russian bot traffic that didn’t monetise at all. There’s nothing like a $10 annual learning course to remind you of an important lesson.

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What's RPM?

What's RPM?

Many people have said to me that the only thing that matters is revenue.....sure, revenue may be important but it's definitely not a measure of success. So the question has to be asked....what is a good measure of success?

Let's imagine that you have a domain that is doing 100 uniques per day and $100. You move the domain to another parking provider and find that the revenue drops to $75. What is the normal reaction? Move it back! Quick! I'm losing $25 per day! That actually may be the wrong answer.

Let's imagine that on the day the domain received $75 it only received 50 unique visitors. That would mean that the new parking provider is performing brilliantly compared to the first one. The way most people compare the results is via the "tried and tested" formula of:   revenue  /   views   *   1000   or in other words RPM.

This sounds wonderful until you realise that the definition of views is different at every parking provider. There are no standards at all. So it we go back to our example, the second parking company may have actually received the same amount of traffic as the first but just reported less because they have more aggressive filtering on the traffic. This would then mean that parking company one would once again potentially be the winner.

Confused? It gets worse. There are over seven different revenue numbers that can be used each month for every domain name for your RPM equation. A couple of them are, "The estimated revenue number" or "The number confirmed two days later". To get an accurate picture of what is really happening you need to get both the revenue and the traffic numbers right or you get the wrong answer and sub-optimally optimse the domain traffic.....which is a fancy way of you saying you will be losing money.

I'll do another short blog on the solution to all of this shortly.

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