Discussions and blogs that relate to the monetisation of domain traffic.

Part 3 - Why Domain Portfolio Optimising Works - Advertisers

Obviously there are a great multitude of business models that you can apply to your development project. Remember that we are looking at developing one of our domains into a business as part of our portfolio optimisation. The first business model that we will examine is advertising.

Escrow.com

In this business model you are trying to ramp your traffic so that it becomes worthwhile for advertisers to spend their money to reach your audience. A couple of things about audience, you can either provide mass numbers or the right people to advertisers. For instance, Whizzbangsblog doesn’t have millions of people visiting it every day but it does have the right people in the domain industry. This is valuable for sponsors.

With your new development you need to choose your approach and go mass volume of advertisers or a select few. If you have a mass of advertisers on your pages, then readers may revolt and advertisers won’t pay the big dollars. Less advertisers will potentially allow you to charge a higher rate and keep the readers onside. It’s a balancing act and it really depends upon your market vertical.

Remember that one person’s advertising can also be another person’s content. This is often the case in hobby publications where the advertising is just as valuable as the articles to the readers.

Unless you have huge volumes of traffic then I would recommend staying clear of selling on a cost per view basis. Likewise, any other performance based advertising (eg. Pay per click) may not be suitable for a business you’re launching out of the gate. A reasonable charge per month is often palatable for advertisers as well as provide some necessary initial cashflow for your venture.

As you write your content what you really want to do is provide value to your sponsors/advertisers. For instance, I use both Escrow.com and Epik and I wouldn’t have a problem recommending them to readers. You need to be careful that you’re not writing advertorial pieces but sharing your own experiences of using their products and services.

You can add a lot of value beyond a banner on a webpage. For instance, earlier this year I conducted a video interview with Jackson Elsegood from Escrow.com about some of the developments that he’s introducing at Escrow.com. Likewise, I will be interviewing Rob Monster from Epik about what he is working on at Epik. If you are looking at adopting this strategy, then the number one issue that you should be focused on is whether this is providing value to readers. There’s no point in conducting an interview that’s merely a sales pitch.

On the flipside of the coin, the ultimate mass volume model is a directory. Once again the biggest challenge for anyone building a directory isn’t the actual building (there’s lots of directory software available) but getting the high volume of traffic to the directory so that advertisers get a return on their investment. As an aside, as a directory grows they can often morph into market vertical or hyper-local search engines…..hence why Google is very interested in this market.

So there are a lot of decisions that need to be made with the advertising business model but they all tend to boil down to providing value in the form of highly qualified traffic. The only way you will keep your traffic is if you are providing reasons (see the previous article) for people to return to your new business. So be really careful in looking after your audience....they have a lot of demands on their time and for them to spend some of it with your new venture is a privilege and should be respected.

In the next article we will look at products, services and how building one of these businesses isn’t actually as hard as you may think.

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mgilmour
Hi Elliot, Thanks for the heads up on the links! I'm still wrestling with getting rid of the index.php......I think it's a weekend... Read More
05 July 2016
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Part 2 – Why Domain Portfolio Optimisation Works – Development

In this article I will be further expanding on how to develop a domain into a business. This is the first business model that can be applied to domains, the other three are monetising traffic, treating domains as stock-items and the last selling domains at high values.

The first issue for me with any developmental project is working out how the domain is going to make money. This seems like an obvious question but many people approach developing a domain from an aesthetic perspective (ie. pretty website) rather than being focused on the business outcomes.

Escrow.com

Generally speaking, all business models hinge on getting not just new traffic to your website but repeat visitors. A repeat visitor is gold as they perceived a value in your site enough that they returned for a second look. It shows that there is something about your business offering that they want.

So here are some reasons why people will return to your website.

Information
Users want to get access to information that you provide. This could be anything from technical documentation right through to an online training course or even an online newspaper.

Opinion
You and your business has developed a significant enough reputation that people are interested in what you have to say on issues, products and services. Before I buy anything I like to do my research by reading reviews on the product I’m interested in.

For example, when I write an article on the domain industry I try and not just report the news but understand what is happening and provide an opinion.

Useful
Google is the ultimate useful tool that allows us to effectively find things on the Internet but there are many, many other tools. How about domain tools, whatsmyipaddress.com or geoipview.com. These are all tools that I personally regularly use.

With the introduction of cloud computing there has been a blurring of the line between a site being useful and one that provides a service….which is our next item.

Services
Users will return to a website because that website provides a great service that they are willing to pay for. A website that is useful is one that often gives their service away for free because they earn money in other ways (eg. Advertising). Salesforce.com is an example of a massive company that provides CRM solutions to businesses all around the world. Businesses can subscribe to their base offering and pay more for additional features. Will your new venture offer a billable service?

Products
Put simply, I’m Amazon and I want to ship you as many physical or digital products as I possibly can. Gaming platform Steam saw the transition to pure downloads and built a whole ecosystem around selling software to gamers. If you have an exclusive product that people want, then they will return to your website to get it.

Funny
In many respects a website that is funny is a subset of the information category but it’s so big a segment then it’s worthwhile commenting on it. Websites that are genuinely funny provide content that you find irresistible to pass onto your friends. The good ones often have massive traffic and drive large amounts of cash from being paid pennies per visitor by advertisers. The challenge here is to ensure your website remains funny and not just become old-hat.

Social
A social website is centred on a community where the individual members can share their knowledge and expertise with the wider group. The first social communities were built using forums and Internet Relay Chat. This has quickly expanded to fully functional Facebook like applications that you can instantly install on any Joomla/Wordpress website. Beware, since Facebook is the eight-hundred-pound gorilla in this space, this segment is often a difficult one to crack but if you can then there can be some really big dividends.

 

There are a lot of other different methods to encourage users to return to your new venture but the above list should kickstart your thinking prior to you spending a whole lot of money. As I’ve mentioned before, I’m a bit of a SEO cynic and believe that if you give people what they want then Google will love you for it as well. So really think about why a person should return to your new venture.

I should mention that when I build an online business, I’ll often do combinations of the above. For example, I may have a social website backed up with regular blogging on topics that people find informative….so don’t think that each of the above items are completely separate from one another.

Whatever you do, pay attention to your statistics and interpret what they are telling you. It’s rare that growth is the answer you want. What most new businesses need is the right type of growth. If at all possible, do whatever you can to engage with real readers/customers as soon as you can as they will tell you so much about your business that you never even thought of.

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finddomains
Hi Michael, You may not remember, but I have met you several times in Vegas and I would like to do business with you regarding my... Read More
29 June 2016
mgilmour
Hi Richard, I sent you an email.
30 June 2016
mgilmour
Hi Jeff, The .com domain is more natural for people to type-in BUT it is not the REASON why people will return to a website. It ju... Read More
30 June 2016
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Part 1 – Why Domain Portfolio Optimisation Works

I recently had the privilege of conducting a session at Domaining Europe on the topic of monetisation. Many domain investors have fallen into the trap that monetisation is dead and let me share with you that nothing is further from the truth. Domain monetisation is alive, well and thriving.

Escrow.com

What has happened, is like any industry there has been an evolution in technology. Those that have kept up with the technological curve remain successful while those that don’t struggle to remain in business.

This is not dissimilar to the days of the buggy whip manufacturer. During the days of horse drawn carts they made an absolute killing. Then a strange contraption initially known as a mechanical horse came onto the market. This technological innovation was really expensive so the buggy whip makers all laughed at the early version of the motor car and continued to make their whips. The rest is history and other than the handful of craftsman buggy whip makers are no more.

It’s the same thing in the domain industry. On one of my recent trips around the world I was talking to a domain owner that had been in the industry for years and he was decrying that monetisation was dead. I asked him one question, “What are you doing now that you weren’t doing five years ago?”

He replied, “I’m doing the same thing.”

I then said, “So you are expecting a different result by doing the same thing? You do know that’s the definition of insanity, don’t you?”

Of course, he wasn’t insane but how many domain investors behave in exactly the same manner? Five years ago they placed all of their domains with a single company, watch their revenue line fall and then claim that it has nothing to do with their own behaviour but the industry. The problem with these domainers is that they are still trying to make buggy whips rather than innovate.

So in this series of articles I’m going to share with you what I do with my own domain portfolio and more importantly why I do it. Since I’m a numbers guy, as much as possible I’m going to track everything back to facts rather than fiction and gut reaction.

When I think about optimising my domain portfolio I place each asset into one of four main buckets.

1.      Development
2.      Traffic
3.      Stock-items
4.      High value

In terms of development, I have whizzbangsblog.com and after a hiatus of about five years I’m in the process of rebuilding my aviation website downwind.com. Why these two domains? I’m passionate about both sites and I really enjoy engaging with readers. For example, those of you that have left comments here at whizzbangsblog quickly discover that I really enjoy replying to questions and helping other domain investors out in any way I can.

Developing a website that you’re passionate about is really important as it will spur you on to write or work on the site into the years ahead. I was speaking to a domain investor about developing a website into a business and I shared that it was actually really easy to do. In my case, all I had to do was write an average of three articles a week for nine years. Voila! Success :-)

I’m actually really proud of the articles here on whizzbangsblog and I often find myself trawling back through the archives to review how my thinking on a topic has developed over the years. I also find that I do much of my thinking about the domain industry and all of the opportunities within it while writing articles. It may sound strange but it’s my way of relaxing.

Every domain investor should have a couple of projects that they are developing into real businesses. In the case of whizzbangsblog I have the privilege of Escrow.com and Epik sponsoring my blog and this helps fund my time for writing.

I'm really careful about the number of sponsors and who sponsors my blog as I'm tying my own reputation to the services being offered by the sponsors. If their services aren't any good then it reflects badly on me.

With the relaunch of downwind I will be seeking aviation industry advertising as the traffic grows.

What’s really important is that when you develop a domain, develop it into a business. Don’t try and make something pretty because you like pretty websites. Focus on the end goal of how you will make money from the site so that what you develop is sustainable over time.

For the record, it doesn’t take much to get a good website up and running. There’s many different platforms available for managing the content. I personally use Joomla but wordpress is just as good.

If you spend over $1,000 getting an initial launch of a website put together then you’re probably spending too much. Make sure you get your first dollar of revenue in as fast as possible and whatever happens, learn from customer feedback!

In the next articles I’m going to dive really deep into my thinking around the four business models and how they help me optimise my domain portfolio for greater profitability. In the process I also plan on revisiting the series on pricing domains.

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london555
Hi Michael-great post so thank you. We own the name eEconomist.com and have thought it would be a great name for a worldclass econ... Read More
27 June 2016
mgilmour
John, I'm glad I could be of assistance. Feel free to reach out to me if you want to chat about your domain.
28 June 2016
mgilmour
It's easy to say yes to money and then realise that you've made a BIG mistake.
28 June 2016
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The Hidden Value of Optimisation

Many domain portfolio owners get so focused on their parking statistics that they forget about other factors that impact the overall performance of their portfolio. In this article I would like to unpack the effect the Euro/US exchange rate has had on a portfolio and to illustrate that all is not as it seems.

Escrow.com

I was recently looking into the performance of a particular portfolio that does a little over $20,000 per month in revenue. Given the size, I was confident that it was statistically significant for my analysis.

What I was investigating was the RPM (Revenue Per Thousand Visitors) trend so that I could try and understand what is going on with the overall performance. The reason why I was interested in the RPM is because the measurement effectively removes the impact of any fluctuations in traffic.

Since Sept 2014 the RPM for the account had dropped 6.5% from 13.85 to 13.00. Many portfolio owners have experienced some downturn across this period of time but I thought that further investigation was warranted. It just so happened that the portfolio had a large amount of European traffic and this got me thinking.

It wasn’t long before I had the below graph of the Euro/US exchange rate for the same period of time. The Euro had effectively depreciated by around 20% and this is what had contributed to the adverse results.

USD to Euro

 

There was some good news in the all of this analysis. Even though the Euro/US exchange rate had dropped by 20% the overall impact on the client’s portfolio was only 6.5%. The reason for this is that as the Euro dropped versus the $US the ParkLogic systems automatically migrated the traffic to higher paying European monetisation providers. As the client was being paid in Euros this effectively meant they were being paid more.

Any traffic that was being highly paid by US companies remained with them as long as they were paying more than the impact of the exchange devaluation.

I know that this all sounds a little complicated but it clearly illustrates why systems like the one developed by ParkLogic are so effective in reducing external factors that impact the revenue line. We've found that if you leave all of your traffic with a single provider for longer than about a week, then you will be affected by things such as the exchange rate.

If you leave all of your traffic with one monetisation company and there is a crash in the exchange rate, then you will be in for a rough ride. On the other hand, think of a service like ParkLogic’s as being like a “stop loss”. If things go bad, then the traffic is automatically moved for your benefit.

Full disclosure dictates that I declare that I’m one of the founders of ParkLogic. It’s not often that I openly discuss some of the hidden benefits like the one above we provide our clients. It just so happens that the exchange example is a clear case of why traffic optimisation really does work.

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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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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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