Taking Traffic Analysis to the Next Level

Taking Traffic Analysis to the Next Level

I have a really simple question to ask you, “Do you really understand your numbers?” For years now many of us have been staring at traffic statistics produced by different parking companies but do we actually understand what they’re telling us?

In this article I’m going to take you through a high level view of an account on ParkLogic (please view this article as a case study) and some of the analysis that we conducted to understand what was going on with the portfolio. Any client identifiable information has been removed.

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The portfolio has over 48,897 domains and has a baseline revenue of $303.33/day over a 30 day period. ParkLogic was producing a revenue line of $287.09/day for the last 7 days or $16.24 less than the baseline. Most people would immediately suggest that we have failed to improve the results……and they would be wrong.

This is where we need to get under the numbers…..

What we discovered was that the vast majority of the domains weren’t receiving the same levels of traffic to them. In fact, of the 48,897 in the test only 11,223 had the same level of traffic or greater compared to the baseline. The results can then be summarised in the following chart.

Graph 1

The values on the left are the daily earnings for the portfolio for both the baseline and the test period for each level of traffic. In other words, you can find out the performance of domains that had greater than 0% - 100% of the baseline traffic etc.

For example, at the 40% traffic level the baseline domains earned $230/day and ParkLogic $257 producing an uplift of $27/day. For those domains where ParkLogic received at least the same level of traffic as the baseline then the performance is $192 for ParkLogic versus $125 for the baseline. This is an uplift of $67/day, which isn’t a bad performance at all.

So let’s take a look at the second graph and begin to interpret what it is telling us. The blue line is the ParkLogic revenue less the baseline for the particular domains that are part of the traffic sample set. The red line is the percentage increase in revenue for each traffic level.

Graph 2

For example, for domains that had at least 60% of the traffic that the baseline received, ParkLogic provided an increase of $47/day in revenue or a 24% uplift. Where we received at least the same level of traffic as the baseline ParkLogic provided an additional $67 in revenue per day which equates to a 53% increase in overall revenue! Now, that’s what I call smashing the ball out of the ball park!

If we had left the analysis at the macro-level and just compared the portfolio numbers then the massive amount of gold wouldn’t have been discovered. This is why getting underneath your domain traffic statistics is so important. I see so many domain owners make bad decisions on their numbers simply because they don’t actually know what they are telling them.

This is sometimes due to a lack of analytical skills but more often than not it’s a lack of time to do the analysis. I would recommend that you put your Excel skills to work. Remember that each and every day that goes by you’re leaving money on the table that could just as easily be in your bank account.

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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.
Click here to arrange time with Michael
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Developing a Domain Into a Business - Part 2

Developing a Domain Into a Business - Part 2

Raising investment money is often seen as the “holy grail” of many budding entrepreneurs. After all, once you have the investment then the worlds your oyster! This couldn’t be further from the truth.

A number of years ago I had a business partner that was absolutely convinced that our company needed to go and raise some capital. I told him that he could go and try doing that if he wanted to…..and I would just grow the business. In the end he didn’t raise the capital and we still had a successful business.

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I’m a bit of a cynic when it comes to raising capital. It’s the old cliché, “When you need capital you can’t get it and when you don’t need capital investors want to throw it at you.”

Let’s imagine you have one of those incredible businesses where you believe an investor would have to be crazy to not invest. A common practice for VC’s at any level is to believe your “conservative” cash flows and then add a ratchet to the shareholders agreement.

So what does this mean?

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Fred Mercaldo
Excellent article and advice! Very true.
17 December 2014
mgilmour
Thank you for your kind comments. I think that anyone that gets involved with a VC or other investor should do so with their eyes ... Read More
17 December 2014
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Saturday Musings - Give When You Can't Get

Saturday Musings - Give When You Can't Get

A few years ago I had the stupidest idea come to me as I stood at the check-out of our local supermarket. The idea was perplexing, somewhat terrifying and definitely made me incredibly nervous. No, I didn’t plan on robbing the store…..I planned on doing something much more adventurous.

I said to the lady in behind me, “I hope that you don’t mind but I’d like to pay for your groceries.”

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I could feel my heart beating like crazy as I said the words but at the same time I felt oddly good about the state of the world.

She thanked me for the offer but said that she’d pay for her own groceries. I smiled and said, “I’ve had a really good year this past year and I really want to share some of that around. Please let me pay for your groceries.”

In the end she let me pay.

Let me tell you that I got the better end of the deal. After paying the bill (which wasn’t really that much) I left the store feeling so good I felt that I could almost fly. It was the effect of giving to someone that will never have a chance to give back. I hope that she did the same thing to someone else…..sort of like the movie “Pay it Forward”. If you haven’t seen this movie then I would highly recommend it.

I’ve done this similar sort of giving quite a few times…..one of the best ones is paying for the car behind you at the McDonald’s drive-through and then just driving off. It’s awesome!

Right now it’s the Christmas season and to me Christmas is all about giving. If you don’t have money then try giving some of your time, making something or just giving some love by listening to another person’s story. It’s easy to give when you may get something in return but how about if you never can?

So try something adventurous this Christmas and give to a stranger. You’ll be amazed at who gets the better deal. Feel free to share your own stories here about what it was like for you to give.

Merry Christmas!

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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.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

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mgilmour
Kassey, what a great story! I'm sure that the experience you related will be a real highlight for you for the rest of your life. I... Read More
13 December 2014
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Developing a Domain Into a Business - Part 1

Developing a Domain Into a Business - Part 1

So you’re all excited about developing that really special domain name and you’re wondering what the first steps are. Most people immediately jump into getting a website up….whatever you do this is the completely wrong approach!

In this article I want to touch on a number of things that I look for in start-up businesses and then as the series progresses discuss how to actually build a successful business. I've founded many successful startups and there is nothing quite as satisfying as creating something from nothing.

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I've found that successful businesses typically start with a well thought out business plan. The technical implementation of a website is only one small but important aspect of the plan. The first thing that you need to work out is how you’re going to make some money. You may only have a vague concept about how you are going to do this but nevertheless, get it down on paper!

For example, I love writing my blog on the domain industry, business and even my weekly personal musings. From my very first article I had a clear direction that it would be an advertising based business....it may seem obvious but there are many other things that I could have done. Speaking of which....reach out to me if you are interested in advertising!

I was recently approached to invest in an online business and the first question I always ask is, “How are you going to make money?” This seems an obvious question but believe it or not it’s often forgotten in the excitement of getting a pretty website up and running. If you can’t answer the question then stop whatever you are doing and work on that problem because it impacts everything else that you do.

The second question I end up asking is, “How fast can you earn your first dollar?” Like the first question this one is vital as it helps scale how big an investment you require to really understanding if you will actually have any customers.

Once again, I see many budding entrepreneurs believe that they need everything nailed down, automated and working at peak performance. I personally don’t really care about many of those things. I’m more interested in them actually earning the first dollar.

Jeff Bezos started processing his first online payments by literally taking a disk out of one computer and walking it across to another computer. He nick-named this sneaker-net. He didn’t have all of the automation in place but he knew how to collect the money…..the automation came later.

So I come back to the question, “How fast can you earn your first dollar?” Forget all the bells and whistles. I want to know how long it will take you to get a client to buy your product or service. From an investment perspective this proves so many things about your business:

1.    That there is a market.
2.    The really basic technology works.
3.    Your product/service works.

Once you have this in place then it’s just a question of scaling.

It’s like me with the science fiction book that I’ve written called “Battleframe”. I’ve never written a book before and it’s been quite a journey but now that I have my product I need to think of innovative ways of getting it into the hands of customers. I need that first customer that I’ve never met before (ie. not a friend) to buy the book and say that they enjoyed it. Once everything’s in place I then need to scale…..and write book two!

A number of years ago I met a domainer that had built a website into a business. They’d spent $6m on it before they had earned a penny. I must admit it that I just don’t get this mentality. What happens if the market rejects your product? You’ve just spent $6m on something that is pretty worthless.Once you’ve answered my two above questions then you need to answer the third one, “Do I really need any investment.” I’ll cover this in the next part in the series.

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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.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

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mgilmour
You are exactly right with this comment.....I debated about covering it in this article and decided against it. Many venture capit... Read More
12 December 2014
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Saturday Musings - Life in Four Buckets

Saturday Musings - Life in Four Buckets

This past week I was talking with my two adult children, Tim and Sarah, about life and how I manage to choose and allocate my time to what I do. I love these conversations and find that they are some of the most precious and special times with my children.

We ended up speaking about goals and how to managing some of the conflicting opportunities that life presents. For example, should you go for money now or education? This is when I began to speak to them both about my buckets.

I think of my life in terms of four buckets. The first bucket is my short-term bucket and it’s for things that put food on the table now. This bucket often has things in it that I don’t like doing but like any job it isn’t all bad. When you don’t have a penny then this is the place that you need to focus on to make sure that you aren’t forced to go on a diet by the bank.

I then have my medium-term bucket. It’s where I go to find projects that may last for a few years or less. It’s the place for things like finishing a degree, writing a book or launching a business.

The third bucket is my long-term bucket. When I look into this bucket I see things that are on my “bucket list”. For instance, I’ve always wanted to learn how to fly and a few years ago I achieved this goal. It was firmly in this bucket. I have a quite a number of life goals in this bucket and when I pull one out to achieve it I end up getting an incredible sense of satisfaction.

Then there’s the last bucket. This is what I call the eternal-bucket. This can sometimes be known as the “faith” bucket but I think that it’s broader than that. It’s about what I’m doing now that will either positively impact generations or develops my personal character. We all have failings that need to be worked on. If you've tried to change something about yourself you will have found this bucket has really hard tasks in it!

In my discussions with Tim and Sara I suggested that they always need to work on all of their buckets. They may need to change their emphasis and focus but keep on nudging all of them.

In other words, you may have to focus on earning money now to pay down a debt but don’t neglect the fact that you may have always wanted to write a book, scuba dive and give some time to your community. You may not have a lot of time but write those hundred words, research online about diving and pay for the groceries of the person behind you in the queue at the supermarket.

For example, I suggested to Tim that he needs to get a part-time job to pay for his living expenses but don’t get a full-time job. Why you may ask? He wants to write a book about his recent adventures so a full-time job would make this more difficult. I also suggested he complete his degree part-time as it may contribute to some of his more long-term goals. Finally, attend church as it’s one of the few places that really focuses the mirror on developing your character.

It will be interesting to see what Tim chooses to do but I’m confident that he’ll make a series of decisions that are right for his own buckets. The problem comes when people don’t make decisions for themselves but let other’s do it for them.

My buckets really help me and I hope that you find the analogy useful in sorting out your own life goals and desires. Have a great weekend!

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