Part 3 - A History of RPM

Two titans inadvertently impacting each other.

Please click on the below link to view the first two parts of A History of RPM:
Part 1 - A History of RPM
Part 2 - A History of RPM

The volume of domains being dropped was so high that Verisign found it was being buffeted by the Google margin grab. During this time, you could track the impact a one cent PPC drop would have on Verisign’s revenue line.

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I remember conducting an analysis that concluded it would be financially viable for Verisign to underpin the entire domain investment industry so domains weren’t dropped. From memory it showed that every domain dropped cost Verisign $73 of market capitalisation. By underpinning the PPC payouts by diverting marketing dollars directly into the monetisation companies Verisign could halt the tsunami of drops from marginally profitable domains.

Several years after the GFC Google had reached rock bottom with the margin grab. I can only surmise that if they kept on increasing their margin then the partner network would essentially collapse. This would not be a good thing to happen right in the middle of rumblings about monopolistic behaviour at the legislative levels.

What we shouldn't miss in this whole saga is that Google's behaviour has been completely economically rational. They have the interests of shareholders to consider and not the domain industry. Those domain investors that moaned about what Google was doing needed to make changes to their businesses and do something different.

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Part 2 - A History of RPM

This is the second in the series on "The History of RPM" and refers to the forumula discussed in Part 1.

RPM formula

Please click on the below link to view Part 1 of a History of RPM:
Part 1 - A History of RPM

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A number of years ago, one domain parking company (Domain Sponsor) controlled a HUGE volume of traffic and ruled the industry. Using their market power, they began to dictate terms to Google. Although I wasn’t privy to internal discussions, I could view Google’s response from an external perspective.

Since a contract was in place Mg was VERY HIGH and Google was bound to pay a bonus for what they previously thought would be impossible high traffic levels. This created a virtuous spiral for Domain Sponsor. As payments increased, they sucked in more traffic, climbed the tiers and they then increased payments further etc…..well, you get the idea.

What did Google do? They shattered the market by issuing a whole lot of new contracts (eg. Parking Crew, Internet Traffic, Voodoo etc) and wrote contracts that provided sunrise clauses to new players, so the traffic was sucked out of Domain Sponsor and the tail was no longer wagging the dog. They then rewrote the contracts with shorter terms and different values for Mg.

For those of you that are familiar with Domain Sponsor you will also know that it no longer exists. This could be blamed on a whole variety of reasons from bad management and VC driven outcomes through to Google but the fact remains that the once king of the domain industry was dethroned and ground into the dust.

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Wolftalker
23 September 2019
mgilmour
Thanks for that! I try to be as interesting as possible by providing a different perspective on what is often treated as the munda... Read More
23 September 2019
mgilmour
I wrote an article about the fact that at ParkLogic around 65% of our traffic is now monetised at non-Google sources. Check out: h... Read More
07 October 2019
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Part 1 - A History of RPM

Getting a fuller understanding of RPM

In this series of articles, I plan on sharing my insights into RPM and how this metric has impacted all our lives in the domain industry over the last decade. I hope you enjoy the articles as much as I have writing them.

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For those of you that are unaware, RPM means Revenue Per Thousand Visitors. I find that very few people understand how this universally accepted measurement term is calculated and how it can vary from one provider to another. During the following articles I will be referring to how RPM has shaped the history of the domain industry….

Most people would be aware of the formula for a domain’s RPM looks like the one below:

Simplistic RPM formula

This looks simple enough until you begin to dig into it. The reality is that a sustainable market RPM formula it looks something more akin to the following:

Extended RPM Formula

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joezeppy
Hi Mike, You're a show off but I mean this in the most positive way. I love this stuff. LOL
24 September 2019
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Part 3 – Traffic Test – Improving the Revenue

Turning the revenue trend chart around.

This is the third in the series on running a traffic test. The first two articles in the series can be viewed at:
Part 1 – Traffic Test – Baseline Data
Part 2 – Traffic Test – Focusing on Performance

As we discussed in Part 2, what’s vital in running a traffic test is understanding the performance, both positive and negative. The data is the data but interpreting what it’s telling you is far more important if you are wanting to develop long-term value from your domain traffic.

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So how is the real live test portfolio progressing so far? The following two charts show the overall trend lines are all heading in the right direction. Despite the time of year and the typical overall decline in advertising spend over the northern hemisphere summer, revenue is continuing to trend upwards.

Revenue and plRPM charts

The second chart clearly shows the reason for this is due to the normalised RPM (or plRPM as we call it at ParkLogic) is also trending upwards as the optimisation algorithms continue their work. For those of you that are unaware, RPM stands for Revenue Per Thousand - more of per thousand what shortly. It’s at this point that I’m going to take a little detour to explain a few things about plRPM and how it differs from RPM.

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