Part 5 - Traffic Test - The Results Three Months Later

The revenue trend continues to rise.

This is the fifth in the series on running a traffic test. I thought that I would return to the traffic test series and update readers on the results since the last article in July. The question that I wanted to know was whether the positive numbers previously reported were sustainable or whether they crashed back to reality.

The first four articles in the series can be viewed at:
Part 1 – Baseline Data

Part 2 – Focusing on Performance
Part 3 – Improving the Revenue
Part 4 – Show Me the Money!

Escrow.com

I would remind you that the data is being pulled from the ParkLogic client interface and this wasn’t a “special” customer that just so happened to be doing well. In fact, I didn’t know what the results would be prior to writing the first article.

The great news is that both the revenue and RPM trends have continued to increase. The revenue has increased above the baseline from 46% back in July to 55% as of now. I would have thought the trend would have levelled off by now but it’s continuing to increase.

Revenue chart

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Part 4 - Traffic Test - Show Me the Money!

Analytics can generate exceptional returns.

This is the third in the series on running a traffic test. The first three articles in the series can be viewed at:
Part 1 – Baseline Data

Part 2 – Focusing on Performance
Part 3 – Improving the Revenue

Escrow.com

In the previous three articles I’ve been taking readers through an actual traffic test that a real prospective client is doing with ParkLogic (I'm a co-founder). I have not doctored the numbers or done anything to make them look better. They’re the real deal.

The traffic test is now at the stage where we are looking at really putting the foot down to maximise the revenue. Overall, there has been a 36% uplift in revenue, which for most people this would be an outstanding result. Once you begin to dig into the numbers the results look even better.

The following chart compares the performance of the latest week’s data versus the baseline as a percentage for various traffic levels. For instance, for domains where we saw at least the same level of traffic as the baseline there was a 46% uplift in revenue, for domains with at least 80% of the traffic, an overall 43% uplift. This continues on until for all domains it’s just shy of 36%.

Results by traffic level

 All domains will have varying traffic levels over time and what this chart displays is the performance of the traffic test at the different traffic levels. Since domains with less traffic take longer to optimise then it also suggests that the low traffic domains still have potential upside that is yet unrealised.

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Part 2 – Traffic Test – Focusing on Performance

What determines good performance?

This is the second in the series on running a traffic test. The first may be viewed by clicking on the link below:

Part 1 – Traffic Test – Baseline Data

Escrow.com

One of the challenges of running a traffic test is to determine which metrics should be used for comparison purposes. I’ve had so many people tell me that all that matters is revenue…..I beg to disagree.

Although revenue is a very important metric it is not the only metric that should be paid attention to. For example, let’s imagine the baseline data for an education related domain is from May and the traffic test started mid-June.

Many education advertisers wind down during June and therefore the pay-out rates per click will typically be less for this type of traffic. In addition, depending upon the type of education domain the traffic is likely to be less as well.

What we need to do is to interpret what the data is telling us and not just look at it and say, “The revenue is down, I’m pulling the test.”

One of the challenges in running a traffic test is using views as a comparison metric. Because every provider counts views differently then using this metric can end up becoming quite subjective....that being said, sometimes it's all that is provided in the baseline data so it's better than nothing.

Many years ago, I was sitting in a meeting with a person that controlled a very large domain portfolio. They were running a traffic test with us and we were taking them through our typical analysis and discussing what was happening at the individual domain level. This surprised the prospective client as they said they’d never done that before.

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Part 7 - Portfolio Optimisation - Running a Traffic Test

So you’ve just been to The Domain Conference in Fort Lauderdale and a monetisation company convinces you that you should run a test with them. Is there any real point and what is the best way to do this?

If you’ve ever moved your domains between parking companies by changing the nameservers then you will very quickly realise that there are so many variables to consider that the test becomes meaningless. For example, by routing the traffic at different periods of time, traffic volumes and domain market verticals all contribute to distorting the results.

In addition, if you move all of your domains across to the new company then from the previous article in this series we now know the best case scenario is they will win 35% of the time. Remember this number is for a properly optimised domain portfolio. If they win more than that then it’s only because your portfolio has not been looked after.

All monetisation companies know that they will perform well on some domains and not so well on others. Their goal is to hope and pray that overall the total amount they pay you will be more than your current parking solution.

From the domain investors perspective this is a really silly way of looking at things. What you actually want is to leave all the domains that win with the new company with them and automatically move all the domains that do worse away. This then maximises your earnings.

The ideal solution would be to keep all of your domains where they are and then send a percentage of the traffic to the new company for testing. This process allows you to accurately benchmark the new deal with a greatly diminished risk, compared to sending all of the traffic for your domains to the new company.

Earlier this year, one of ParkLogic’s customers had just returned from NamesCon and they were approached by a couple of the parking companies to run a test. Rather than move all of the domains away from ParkLogic they had a chat with me and we then routed a portion of their traffic to special accounts setup for them at the new companies.

They then were able to assess down to the cent on each domain whether the new deals were any good or not. In the end they moved everything back to their ParkLogic controlled accounts as they performed better than the specially setup ones. I should say that we were very happy to facilitate this process for our client as we regard it as one of the services we provide.

This structured process provides domain investors and any of their investors the confidence that everything that can be done is being done to maximise earnings. There’s no “grass is greener on the other side of the fence” as we absolutely know what the grass looks like and tastes.

Ultimately what you need to assess is your stomach for risk or in other words, how big a percentage is good enough? We typically find that forcing around 20% of the traffic for each domain over a couple of weeks (time depends upon traffic levels) gives a good enough sample. If the new company wins then you should move 100% of the traffic across to them…..and this is what we do. If a few weeks later they don’t perform as well then we automatically migrate the traffic back to the winning solution.

So after going through this process, what constitutes a win for the new company? You can’t use revenue as the traffic will have varied for the domain and distort the result. The only measurement that you can use is the normalised RPM.

Remember, we discussed this in a previous article. A normalised RPM involves measuring exactly how much raw unfiltered traffic we have sent for a particular domain to a particular parking company. We then measure get the revenue generated from that traffic. For a domain, mathematically this looks like:

(revenue at a parking company) / (total traffic sent to the parking company) x 1000

This then means that for every domain we will typically have the normalised RPM for every monetisation solution at any point in time…..yes, that’s what we do. In fact, we collect around three hundred different metrics for every domain every single day.

So when we were assessing for a client whether the new companies were performing better we we’re not looking at the revenue. We are looking at the normalised RPM because this metric tells us if the grass is actually green or brown. Given the process we also know the colour of the grass for every solution at any point in time.

So let’s imagine you’re not with ParkLogic and you don’t have any baseline normalised RPMs. For many clients we typically integrate their current monetisation account into the system. They change the nameservers to ParkLogic and we then route 100% of the traffic back to their existing provider.

By going through this process there won’t be a drop in revenue and it allows us to establish a baseline normalised RPM that we can measure any new solutions against. We then test a portion of the traffic elsewhere to see if it will perform better at other solutions. The whole time we are keeping an eye on the normalised RPM. It isn’t long before we see an uplift in the overall revenue.

This is the proper way to conduct a traffic test as it provides definitive performance data that is accurate. I hate to say it but any other methodology will largely be guesswork which is likely to end up with a suboptimal result.

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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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