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Part 1 - Traffic Test - Baseline Data

20190531_traffictest Running a Traffic Test

Getting your hands around the data is paramount when it comes to working with domain traffic monetisation. I’ve had a number of readers ask me to write further about how ParkLogic conducts a traffic test and whether it really is worth all the hassle.

Escrow.com

The first thing we ask for is baseline data from where the domains were previously being monetised. Some people get suspicious with asking for this information and take the approach that we should just perform as “good as we can” so I thought it would be good to unpack why we ask for this data.

There are three primary reasons:
1.    Focus
2.    Accountability
3.    Trust

By having data prior to starting the test helps us immediately focus immediately on where the effort will have the most impact. Without baseline data we end up spinning our wheels for the first part of the test and this is not worthwhile for either ourselves or the potential partner.

Accountability is crucial in any transparent relationship. We take managing domains very seriously and we believe we need to be held accountable against the baseline data at the very least. Let’s face it, the revenue from these domains goes to paying mortgages and putting food on the table for many domain investors.

The last reason is trust and, in many respects, this is the most important reason out of the three. ParkLogic has a stance that we do not have people who use our service, but partners and these relationships are built upon a solid foundation of mutual trust.

This also means we are committed to the best outcomes for clients for the LONG-TERM. We are highly uninterested in short-term gains that may sacrifice a long-term positive outcomes. It also means that we will share the truth when something goes wrong, apologise for the situation and make amends. We will also share the truth about the numbers and seek to understand them with our potential new partner. We believe this is a very different approach compared to most other companies.

We typically look for the baseline data to be doing around $100 per day in revenue from several hundred domains. The reason for this is the amount of revenue needs to be large enough so that at the end of the test we aren’t all looking at one another and questioning whether the test was large enough to be statistically significant. This would be a waste of everyone’s time and effort.

Once we have the baseline data, we bring everything back to daily performance. If you provide last months data for a subset of domains under test, we will divide the views, clicks and revenue by the number of days for the previous month. This then allows us during the test to take snapshots of a week of data, reduce it to daily data and compare it against the daily baseline.

At the start of the test we will request a weekly call with you to review the performance and to see if it is on track. You should expect the total duration of a test to take around 6 weeks. One of the aims of the call will be to highlight the three aspects of focus, accountability and trust.

At the end of the test period we will have an open conversation about the performance. At times we will suggest that some of the domains where we didn’t perform should be re-baselined to make sure there wasn’t some seasonal issue that artificially inflated their baseline numbers.

Since we take a long-term view we will always take the approach of recommending what is best for the new partner. So losing a bit of revenue from a few domains in the short-term is a non-issue for us.  I must admit that at the end of a test it’s rare for partners to take domains away for re-baselining as they have gained the confidence that we have their best intentions at heart and the performance is clearly visible in the numbers.

A few things about baseline data that I should mention. We’ve had some people artificially increase the baseline numbers to make them more difficult for us to compete against. This sounds really clever but if you think about it for a second, this is a bit silly.

Let’s imagine the baseline numbers were scaled up by 50% and we only achieved a 48% increase against the actual baseline. Being economically rational, the test was a failure and you should take the domains away…..but it wasn’t a failure. So now you either confess to what you did, or you leave the domains with us and we know what you did anyway. Besides this, starting any relationship with a lie isn’t a good approach in my opinion.

I know that it many respects this article was a little philosophical but quite often understanding the principles behind an organisation will tell you a lot about their approach. In the following article I’m going to walk you through a real case study and dig into the performance numbers for a partner that did a test with us.

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Friday, 13 December 2019
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