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This is the third article that I’ve written that relates to Earnings Per Click (EPC) in this series. As we’ve already explored EPC is one of the most misunderstood metrics and many of us still have a simplistic view of how EPC is actually determined. We’ve seen the problems that are created with stats delays by Google and Yahoo plus the fact that many parking companies have to estimate what EPC they will pay. Now, just to muddy the water a little more let’s take a look at geo-targeting traffic in order to achieve a better EPC and hopefully positively impact the click through rate (CTR).
 Geo-targeting is when a domain’s traffic is directed to where that traffic should naturally flow. The geographic region that the traffic originates from is determined from the IP address of the viewer of the web page. It just so happens that IP addresses have been allocated on a roughly geographical basis which makes tying an IP address to a region possible.
For example, let’s imagine that progolfer.com (one of my domains) had 80% North American traffic and 20% European. It would make sense to segment this traffic so that it flowed to where it should naturally get a better result for advertisers. In addition, if you know that the European traffic is actually French then it would also make sense to ensure that the page that they view is in their own language.
What are we actually saying here? Essentially what’s going on is that we are playing with both the EPC and CTR for a domain. The EPC is influenced because we may be setting French keywords that pay more than their English counterparts. In turn the CTR will be increased because the reader may be able to actually read the page in their own language! This is all great news to the advertiser and the domain owner.
Let’s puts some numbers around this. Let’s imagine that when I sent all of progolfer.com’s traffic to a single parking company that its’ EPC was $1 per click and CTR is 10% over 100 unique visits. What this means is that all the traffic (both French and English) is being valued at an average of $1 per click and we have total revenue of $10. This is derived from 1 click (ie. 10% x 100 unique visitors) times $1 per click.
What we also know is that 20% of the traffic is French (ie. 20 uniques). If we split that traffic to a parking company that specialises in multi-lingual French domains then we may move the CTR that was actually 0% (due to English pages being served to French users) to 25%. Let’s now take a look at the overall CTR position.
Previously we had 10 clicks over 100 uniques now we have 10 clicks over 80 uniques plus 25% of 20 which is 5 clicks. Our total number of clicks for the same traffic is now 15.
Remember that the domain previously earned $10. With the additional clicks we can afford the average EPC to reduce to $10 / 15 clicks or 66 cents per click. From an investment perspective this then reduces the risk for the domain.
Obviously this is a contrived example but what it illustrates is that both EPC and CTR can be impacted by geo-targeting traffic. In this example there was a positive result but this is not always the case therefore like all domain optimisation a high degree of ongoing diligence is recommended.
This means that a domainer needs to build systems to switch traffic and additional systems to monitor their domain portfolio across time or they can partner with an organisation such as ParkLogic (of which I’m an executive director) that offers this type of service to the larger domain owners in the industry.
Domain investment can be risky but the risk can be greatly reduced via a clear understanding of the fundamental metrics that make up the revenue stream from a domain. As can be seen optimisation and domain risk management is not a matter of just hiring someone to work on my domains but it involves complex systems, algorithms and highly trained individuals to extract the most value from a domain.
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