Saturday Musings - Reflecting

Spend some time in reflection

I’ve really been wrestling with what to write about today for Saturday Musings. I love writing and normally I find that it just flows onto the page but today is different. I thought that I would take you on my journey for the past week and invite you to share about how you have tackled challenges in your life.

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After returning from vacation I was immediately faced with a major personal issue to contend with in my extended family and this culminated in a family meeting. Typically, these issues would really drain me, and I would be struggling for several weeks while I emotionally and mentally came to grips with what was going on. This time was different.

As many readers know, for many years I’ve been sharing openly about my own personal life journey. In many respects, Saturday Musings has become a form of therapy as I write down my thoughts in at least a semi-coherent manner.

I’ve tried to share openly so that you can learn from my quest to becoming a better, more well-rounded individual; physically, mentally and spiritually. To me, life isn’t being the one to finish with the most money or toys.

Life is a journey of self-discovery about who you are and how you can constantly improve. Afterall, the most difficult thing you can do in the world is change yourself…..as you have absolutely no power whatsoever to change anyone else.

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Part 4 - A History or RPM

And yet another RPM variation....

Please click on the below link to view the first three parts of A History of RPM:
Part 1 - A History of RPM
Part 2 - A History of RPM
Part 3 - A History of RPM

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Some people have mistakenly thought that if another player is involved in the chain (eg. someone like ParkLogic) then the margin that they take will consume any benefits. This couldn’t be further from the truth as companies such as my own play more than just a revenue increase, we also manage downside risk.

To understand this hidden benefit, we need to return to the RPM formula from Part 1 in this series. At ParkLogic we effectively have an RPM for every domain, at every monetisation company at every point in time. In fact, many years ago I coined the term normalised RPM (nRPM) as the unit of measurement for every monetisation source.

This means we actually know who is paying the most for any domain at any point in time. We then route the traffic to those destinations so that ParkLogic customers achieve a greater yield for their traffic.

As a by-product of this process we also manage downside risk. For example, if a domain is being paid an nRPM of $10 at one provider and $9 at another we would rightly route the traffic to the $10 provider. Suddenly the $10 provider loses a key advertiser and is now paying $2. If you were leaving the traffic at a single provider, then you would get the $2 but with ParkLogic the traffic will automatically flow to the $9 provider. This dramatically smooths out these types of market disruptions and reduces the risk for the domain investor.

Now here’s the problem with all of this history and discussions about RPM. When you deal with direct advertising networks, they have another type of RPM altogether….and it’s a difficult one to crack and it highlights the difference between a spot price and an average price.

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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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Recent Comments
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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Saturday Musings - Part 2 - Dealing With Stress

Being deliberate to overcome stress.

This is the second part of the series on "Dealing With Stress". The first can be view by clicking here.

I woke up on day two feeling much better and like a load was off my shoulders. My mind was in a position where I could begin thinking about how to better manage circumstances moving forward.
In all my pondering I had two words resonating in my head, “Be Deliberate.”

What do I mean by this? Be deliberate where I put my time, be deliberate which relationships to invest in, be deliberate about what opportunities to pursue, be deliberate about what tasks I pick up, be deliberate about everything in life.

It was like a lightbulb going off inside my head. If I could just be deliberate, then many of the issues that I was wrestling with would come into line.

Upon reflection, the vast majority of my stress was because I let other people push me into the passenger seat of my life’s car. I was jumping from one issue to another because someone demanded that I respond immediately…..in computer terminology this is called thrashing. Nothing is finished and everything half completed.

By being deliberate I had settled once again into the driver’s seat and it felt good. After another day’s contemplation I put some things into place that have transformed who I am and made my life so much better.

What I’m going to suggest may be obvious for some readers but for me it was revolutionary. The first thing I did when I returned home was apologise to the family for my “silent treatment”. Nothing like a good serving of humble pie to start you off in the right direction.

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