The Big Issues in the Domain Industry – Part 4

20171201_monetisation

In this article I’ll be addressing the final domain business model, traffic monetisation. As well as being valuable to advertisers, domain traffic drives many of the opportunities received from potential domain buyers. Contrary to popular opinion, traffic is the lifeblood of the domain industry…..not domain sales.

Escrow.com

One of the keys to greater domain sales is to leverage your domain traffic. If you sell all your traffic domains, then expect there will be a commensurate drop in domain sales. In Part 1 of this series I discussed using your traffic for your own sales rather than providing it for free to the marketplaces and have it potentially result in another person’s sale.

Traffic monetisation is a way to generate additional funds to cover renewal costs and contribute to your profitability. Many people wrongly believe that traffic monetisation is dead. It’s not. I personally know of many people that earn thousands of dollars a day by focusing on building their domain traffic portfolios. For those of you that disagree….I’m happy to have a chat about purchasing your traffic domains.

The major difference between traffic monetisation and domain sales is traffic monetisation tends (not always) to generate less revenue per domain but that revenue comes in month after month. Domain sales tends to be very lumpy and unless you have a very large portfolio it’s difficult to achieve a consistent income – this also makes planning exceptionally difficult.

What is the big issue that is going to revolutionise traffic monetisation? It’s really simple and yet exceptionally difficult…..it’s a change of mindset. Domain investors need to SHIFT their thinking about monetisation....hence the graphic above.

Most domain investors that “park” or monetise their domain traffic do so at a parking provider. As I’ve said before, domain parking is still hugely successful because it’s one of the most scalable business models available to investors.

The following diagram outlines the value-added that each party brings to the domain monetisation supply chain. If anyone in the supply chain does not add value, then the whole chain falls apart.

Domain Traffic Monetisation
 
For example, if an advertiser’s products are bad, consumers won’t buy them. Advertisers will then stop advertising, and this finally impacts the domain investor with reduced revenue for their traffic. If the parking company allows garbage traffic through, then Google will either block their feed or the advertiser will stop advertising in the domain channel.

I would like to add a few high-level thoughts to this diagram. Google provides an incredible breadth of advertisers, everything from selling Apples right through to going on safari to see a Zebra….they’ve got it. What you will also notice is that everything depends on the right hand side…..quality traffic. Also, if you have ever parked your domains with multiple parking providers, you will see reported views for a domain will vary widely for each of them.

In their efforts to pass on only quality traffic, each parking provider has built their own filtering system on what they pass through to Google…..and in many cases the baby gets thrown out with the bath water. In addition, to get increased clicks each parking provider has developed their own unique intellectual property that improves the results for domains on their platform. This is all good news for traffic monetisation investors!

Here’s the question that all of us must ask. With each provider doing their own unique magic, wouldn’t it make sense to use them all to maximise revenue? This is exactly what my company, ParkLogic, has been doing for the past 11 years….and it works.

The below diagram outlines what we do to get the most from your domain traffic. The “Meta Parking” company first offers the traffic to direct advertisers and they need to pay more than the best traditional parking solution. If the direct advertisers don’t bid high enough for the traffic, then the traffic is then passed through to the best parking solution. Direct advertisers provide a large amount of depth (not breadth) in certain market verticals.

Domain Traffic Monetisation with Meta-parking

This is a very simple view of an incredibly complex process, but it illustrates some of the main points. To build something that can accurately sample traffic and send it to the right destination at the right time isn’t easy. I've seen many investors do crazy things such as either try to build their own system or sample by changing their DNS to point to different parking providers at different times. They then try and manage everything via spreadsheet…..good luck with that!

Even if you're a developer you've got to ask whether it's better for you to spend years developing a system or spend your time working on finding more domains? I’ll be candid, building a platform to do this is not trivial and in my opinion, it’s far better to outsource to someone that has already done it.

What the above diagram illustrates is that each parking provider will receive the traffic where they perform the best. This in turn ensures that Google is receiving increased volumes from all the best traffic (no babies out with the bath water etc.). Advertisers will also pay for this traffic and this ultimately flows through to the domain investor. The entire supply chain benefits.

As I said before, a meta-parking provider provides value for the whole supply chain. From a domain investor’s perspective, they are able to earn superior revenues for what is actually reduced workload.

About 12 months ago I was discussing with a domain investor about the performance of their traffic revenues. They were a bit despondent that earnings had been declining for the previous couple of years.

I asked them what they were doing differently to stop the decline. They indicated they were still with the same provider and that they’d done nothing differently. I responded with, “So let me understand this, you hope to get a different outcome by doing exactly the same thing?”

They nodded yes, and I could see they felt a little silly for doing so.

As I said towards the beginning of this article….the biggest change that needs to occur in the traffic monetisation space is for investors to stop accepting reduced returns and try smarter options. Too many investors are still hoping for a different outcome from their same behaviour.

Here’s the one paragraph sales pitch…..if you're earning more than $250/month in revenue from your traffic then give me a call or reach out to me in the Domainer’s Network here. I’d be happy to discuss whether ParkLogic is able to assist you in earning more from your traffic. Enough of the sales pitch.

What keeps me awake at night is what’s beyond “Meta Parking”? How can domain monetisation grow beyond its traditional roots and tap into new transformational revenue streams? Too many of us are crossing our fingers hoping for a click when we should be innovating into new exciting solutions. I can only say, watch this space…..as I have a lot of ideas on what's possible.

Click here to enter the Domainer's Network.

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Thursday, 14 December 2017