Yesterday, I crossed the line of no return. I sometimes wonder what it would be like if I could somehow undo what happened but then, with a smile on my face I really don't want to. You see, yesterday was the day when our youngest daughter turned eighteen and in Australia, became an adult.

I remember like it was only yesterday when I held her in my arms for the very first time. The wonder in her eyes as she looked around the hospital delivery room and then she finally fixed on my own.

We both soaked in each others features, I her father and she my daughter. So yesterday I looked at not a little baby but a beautiful grown women, full of life and excitement for the years ahead. An almost mystical spark of love sprang between us.

When I look at her today, she seems to continue to look innocently around at the world in wonder....and then our eyes meet. Like eighteen years earlier, the bond of love between us is as strong as ever. I'm her father and she's my daughter.

But I’ve crossed a line. I no longer have children who are children but children who are now adults. Somehow, though all of our life’s ups and downs my wife and I have watched as three babies transformed into adulthood…..and now our last is no longer a child.

I'm so proud of each of my children, for the adventures they're going on, devouring life with a ferocious appetite. If life is a theme park, each of them are definitely riding the rollercoaster rather than playing it safe on the merry-go-round. You only get one shot at life, so you may as well enjoy it.

So when I looked at Elise yesterday, I found I had conflicting emotions. Happy for her but sad that those childhood years are now behind us. So rather dwell overly long in the past I begin to think of the future and the possibilities it will bring. Grandchildren! It was then that a smile spread across my face…..the cycle of life continues…..so maybe there was no line after all.

Have a great weekend!

PS. I should mention, that my wife Roselyn and our two daughters will be at NamesCon in January…..we look forward to see you all then!

Many people talk about having quality domain traffic but what does “quality” actually mean? In this article, I’m going to attempt to unpack "quality” and from who's perspective.

Domain owners often confuse quality as being a measurement of the level of real human versus bot traffic. On the other hand, advertisers define quality as traffic that converts for them. Who is right and are these sensible definitions for quality?

Recognised versus unrecognised traffic is the ratio of the views over the URLs for a domain name. Remember views are what the parking companies report while URLs are the unfiltered raw traffic for a domain. This is also the measurement of how much traffic is effectively dropped by a parking company as they deem it either a bot or unacceptable for one or another reason. The assumption is the greater the ratio of views to URLs the better the traffic quality.

Let’s imagine I have a views to URLs ratio of one (ie. A perfect score). There are a number of other filters the traffic flows through before an advertiser deems a traffic source as containing high quality. Let’s break these steps down.

A user clicks on an advertising link.

A domain with a high Click Through Rate (CTR) suggests there is an appropriate match between the traffic (ie. Users) and what is being displayed. The user is enticed to click on an advertisement to find out more information.

If the user was interested in games and the page had mortgage advertisements, then there is a mismatch and the CTR would reflect a lower number.

This sounds pretty obvious until we consider that a couple of years ago Google changed their advertising from being context sensitive to psychographically targeting the end user. In other words, previously if a user went to beds.com they would see bed related advertisements. This has now changed so that if I go to beds.com, it may also display hotels for Bali because Google knows I’ve been searching for a good vacation spot.

This also means we can't judge the content of a parked page simply by going to it ourselves....which is a little disappointing because it was so easy in the past to match the traffic to the advertisers.

Advertiser’s Website Convinces User to Begin Buying Process

After clicking on the advertisement, the user is faced with the sales pitch to entice them to buy the product. This is completely out of the hands of the domain owner that sent the traffic but is an important part of the overall quality process from the perspective of the advertiser. The goal is to have the user begin the purchasing process by adding the item to their shopping cart.

User Pays for the Shopping Cart

The advertiser only earns money when the user puts their hand in their pocket and actually pays for the shopping cart. Without this singular event no advertiser would ever buy any advertising. This is one of the reasons why advertisers regard converting traffic as quality traffic.

If we were to take these steps and create a mathematical formula, then it would look something like this:

URLs X Parking Filter = Views

Views x CTR X Click on Specific advertisement = Traffic to advertiser website

Traffic to advertiser X % Who Complete Purchase action = Shopping cart filled

Shopping cart filled X % of people that pay = sale

This means that a sale is a fraction of the total URLs that first went to a domain name. An advertiser is often blissfully unaware of many of the intermediate steps and focuses their attention on their total sales divided by how much they paid in advertising. This provides them the gross return on their investment. This is a simplistic view but it will do for illustrative purposes.

The problem with this whole process is quality is being defined in terms of sales. What happens if the advertisers pitch attracts the wrong type of potential buyer? What if the sales pitch on the advertiser’s website is really poor? What if the advertiser’s website just looks horrible and has a clunky shopping cart system?

There are so many factors that go into the sales event that are out of the control of the domain owner so why should the domain owner suffer? Ultimately it’s because the advertiser is the one that pays the cash.

So what can a domain owner influence? The only thing they can do is potentially increase the CTR by better matching the contents of a page to the advertiser…..but as we discussed earlier this has largely (not completely) been circumvented by Google’s psychographic targeting systems.

What some domain owners have done in the past is pick up their traffic and move it one hundred percent to a direct advertiser that will hopefully value it. For example, this means taking your travel traffic and pointing it at a travel website.

This all makes some sense until you look at things from the advertisers point of view. Previously, the parked page and clicking process effectively acted as a filter for those people who were interested in the products/services being advertised. Why would you click on an advertisement unless you at least mildly interested? By pointing all the domain traffic this filter is no longer in place.

If the advertiser was paying Google $2 per lead previously then they will be forced to place a discount on this to accommodate the disinterested traffic. This is very likely to trend to the CTR for the domain. Which is another way of saying, “I don’t want to pay for the people that didn’t want to click in the first place.”

If the CTR was originally 20% then the advertiser will pay 20% x $2 = $0.40.  This may be greater than what Google less the parking company commission was paying the domain owner for the traffic. So it may still be worthwhile for the domain owner.

Advertisers may pay more than this figure because they are after volume. Essentially it’s paying a premium to the domain owner because the domain owner can provide a large amount of business. This is a potentially a great result for both parties.

The problem most domain owners have is they don’t control enough traffic in any single market vertical to make it worthwhile to establish these secondary relationships. The advantage with working with a traffic aggregator is they can pool the total traffic from multiple domain owners and send it to individual advertisers. It’s the economies of scale at work.

This all brings us back to the definition of quality. It’s clear there are different definitions depending upon whether you are a domainer or an advertiser. Ultimately for true direct navigation there is no such thing as quality but only results.

The single biggest challenge that domain owners experience is we have very little insight into what domain traffic converts and what doesn’t. If this was provided in our daily statistics, then we could truly value our traffic from an advertiser’s perspective. Maybe we'll get this one day but I wouldn't hold my breath!

So many of us in the western world believe that if we do “good” then things will be all right now and hopefully in the afterlife. I’ve been contemplating this concept of doing good and to be quite honest with you I’m a little confused.

The problem I’m having is that “good” is a subjective term and something that is good for one person may not be for another. Each one of us views the world from our own perspective and cultural background and this taints our perception of what is good.

An extreme example of this is ISIS. They believe they are doing good by blowing up archaeological sites, beheading infidels and bringing their own unique brand of Sharia law to the masses. It’s clear that many people agree with their position and are even willing to put their lives on the line….but does this make ISIS good?

Maybe if you reach a critical mass of individuals that believe as you do, then could you regard what you’re doing as good? If that was the case, then Stalin, Hitler and Mao Zedong would be regarded as saints as they had millions of people following them while they slaughtered millions themselves. I’ve concluded that doing “good” isn’t at all about populist opinion but something else entirely.

Over the last few months I’ve been watching the presidential election unfold in a most astounding manner. Each candidate firmly believes they are the one that will do the most “good” for their country…..this is despite the fact they seem to be trying to prove the other candidate is evil. So maybe a person can be defined as being good by doing less evil? Now we have the conundrum of defining what is evil…..so essentially the flip side of the coin for “what is good”.

Then we have terms such as; “you’re a goody two-shoes” and you’re just “holier than thou” as vain attempts by one individual to try and redefine a person’s personal view of what is good through ridicule. There is essentially a clash of values that has denigrated the conversation to low levels of disrespect….just like in the presidential debates.

There is a liberal way of thinking that has encroached into society that says, “I don’t care what you do as long as it doesn’t impact me.”

It’s an isolationist view of society that builds gated communities, high walls around houses and neighbours who are strangers. At its heart, people who subscribe to this world view have relinquished their right to define what is good and bad until it directly impacts them. Society can be in complete anarchy as long as their walls are high enough and if they are encroached these people will typically define good at the end of a gun.

The problem I see with people defining their own view of “goodness” is that it will vary from one individual to another. Some people will believe its fine to prop up the stats of a domain name with purchased traffic prior to selling it while others believe it’s fraud. Who’s right and who’s wrong in this situation? This forced me to look to the law for some sort of definition of proper behaviour and hopefully “goodness”.

Sadly, the law spends a lot of time defining bad behaviour but not good….in fact, it is largely silent on what’s good. If a person robs a bank, then that is regarded as bad but if you help an elderly person across the road you don’t get some sort of reward from the government.

There is some hope in the law. The mere fact that the law is defining what is bad would suggest that it has some basis in what is good….even if it is silent. Where did the law get its views of right and wrong? This is where I’m forced to acknowledge the fact that the western law (and many laws around the world) largely have their roots in a faith or faiths. In the case of the west, it’s the Judaeo Christian world view.

Whether you are a person of faith or not, one of the fundamental structures of our society has its roots in faith……the reason for this is because it was through faith that our forefathers defined “good”. This means that each day we are all acknowledging there is an external authority that defines good and has defined goodness for each an everyone of us…..WOW, now my heads spinning!

I’m also faced with the fact that most of us seem to be able ascertain what is good through our conscience. Forgetting the outliers in the statistical distribution (eg. ISIS etc.) we seem to know what is good when we see it. But how did this happen and where did our conscience come from? Did it, like our laws, come from a divine authority? I will leave that for you to dig into in your own times of contemplation.

What the basis in the law and our conscience have in common is a bedrock of perceived “goodness” that is not defined by individuals who have differing world views. Goodness is locked down by a spiritual perspective on a common definition of good. This is a great comfort as it means when I’m doing some business with a person there is a clear way we should conduct ourselves. In fact, in business there is a term, “bad faith”. This is when a person is not behaving in a “good” manner to increase their own personal advantage.

I know for certain that I will be thinking a lot more on the topic of “What does it mean to do good?” I hope you also feel challenged in reading this article on your own personal views.

Have a great weekend!

After publishing the article, “Getting Dirty in the Domain Data”, earlier this week I ended up having an interesting discussion with a domain investor. I thought that it would be worthwhile continuing to pull apart the data from the previous post to help many domain investors understand why optimising traffic across multiple monetisation solution is so beneficial.

I will be referring to the data from the previous article so you may wish to read it if you haven’t done so already.

Sampling by Changing the DNS

Many domain investors sample different parking providers by changing the DNS. This method is fraught with many problems that largely stem from comparing results from single sources across different periods of time. Some of the challenges are:

1.      What are you measuring?
Revenue is not a good measurement of success as there will be different levels of traffic at different points in time. Since parking companies count traffic different you can’t rely on the produced Revenue Per Thousand Visitors (RPM) numbers.

2.      Data Distortion
When testing different parking providers over different periods of time you can get massive distortions in the data from seasonality in both the domains and the time of year. In the example from the previous article the domain had massive results in May to July due to it being a travel related domain.

3.      Traffic Leakage
There is a propagation delay each time you change the DNS and this creates more traffic leakage and no new information. In some extreme cases where the TTL (Time To Live) for the domain is long the DNS may not update for months for some users.

The Cost of Information

Some investors believe in splitting traffic equally across multiple solutions and then at some point in time sending all the traffic to the monetisation company that pays the most. This is one of the worst ways to optimise domain traffic and here is the reason why.

There are a lot of strategies around sampling but they basically boil down the single question, “What did the information cost?” In other words, if I was earning one dollar with one company and then sampled another company and found they were paying 90 cents then the information cost me 10 cents.

Minimising these "information costs" is crucial to optimisation. From the example domain, A.COM, in the previous article if we sample the traffic equally across the different parking companies then the portfolio would have earned $1611 versus $2217 or 38% less overall (ignoring direct advertisers).

Every domain needs its own sample regime. At the most simplistic level domains with less traffic should be sampled less often compared to domains with high levels of traffic. In each case, what you are after is a statistically significant result that allows you to decide where to route the traffic. If you don’t have a statistically large enough sample, then you’re guessing.

Real-Time Decision Making

All traffic routing decisions need to be made on a real-time basis. Based upon the data, decisions need to be made literally milli-second by milli-second. I can only speak for my company, ParkLogic, as we use dynamically changing data from multiple inputs to alter not only the routing decisions of traffic but what is displayed on the page and ultimately which advertisers are engaged.

As an example, we track over 250 different metrics for every domain every day and process this data to alter how the traffic is routed. Layered over the top of this daily data we then can then incorporate external dynamic data such as geo-based weather.

Everything must lead to a decision....otherwise it's just intellectually interesting but pointless.

Winning Solutions Constantly Change

If you sample other solutions (however you decide to do it) and then lock that solution in for an extended period of time, then you will be losing. The data from the previous article clearly shows that even for a single domain the winning parking company changes constantly (see below table).

For example, if we routed ALL the traffic through to Voodoo (average winner) and applied Voodoo's payout rates each month then Voodoo would have paid out $436 for the ten-month period. The domain actually earned $4531 for the same period of time (including direct advertisers). The reason for this was a combination of an advertiser paying a lot for the traffic in May-Jul and other parking solutions beat Voodoo the majority of the time.

This doesn't mean Voodoo is bad....as they actually did win for a couple of months. Remember the data is summarised on a monthly basis and can only testify to the fact that the same behaviour exists at the daily and even changes milli-second by milli-second.

Benchmarking Results Must be Done Simultaneously

I mentioned this point briefly when discussing the problems with sampling via DNS but it is important to reiterate it. Testing new solutions must be conducted at the same point in time otherwise distortions in the results will occur and incorrect decisions made.

Let’s imagine I used the domain’s revenue results in June as the baseline data and compared this to any new parking company in September. I could erroneously conclude that the new company was hopeless! Remember that A.COM (in the previous article) is a travel domain and has extraordinary performance in June.

Understanding Data

I’m in a discussion right now with a customer where about one hundred of their domains just aren’t performing. I’m not worried about this customer leaving ParkLogic as we are both working through the data to understand why their performance is down.

Too many domain investors immediately bail on their existing partner and whip their domains out somewhere else in the vain hope they will perform better. This syndrome has a saying, “The grass is always greener on the other side of the fence.” In other words, you will always think somewhere else is better than where you are.

My advice is don’t do a knee jerk reaction and move your domains. Sit down and dig into the data and really understand what’s going on with the traffic. We are in an industry that is built upon data and if you wish to get abnormal returns then it’s vitally important that you get your arms around it or work with a partner that can help you do so.

I hope the few items I’ve raised here in this article will help give you a fresh perspective on your own domain portfolio. Over the years I’ve found that earning more from domain traffic is not always the solution that investors are after. What they want to know is they are maximising their returns and there is proof that this is being done.

Anyone can have a good or bad month but knowing that there are systems and experts in place that are monitoring and understanding the results is really where it’s at. This is particularly the case if you must report to investors or a board. Having the data to confidently know that everything that can be done is being done often alleviates the concerns of the most aggressive directors!

We’ve recently been working with a client to better understand the underperformance of a number of their domain names compared to a few months earlier. What we discovered when we conducted an internal forensic analysis of the data was quite surprising.

The domain we will look at in this article has been renamed to A.COM for privacy purposes. Since the beginning of the year it has had a monthly revenue ranging from $183 to $1221 and a normalised RPM (revenue per thousand visitors) of $75 to a high of $488. So what was going on with this domain?

Upon closer inspection we found that A.COM was a domain from the travel industry. People were looking for the services the domain offered from May to July and this dramatically pushed RPM rates higher as advertisers competed more aggressively for the traffic during this time. In fact, the peak numbers were achieved by a direct advertising travel company.

So let’s imagine you bought the domain based on those very high July numbers? It wouldn’t be long before you discovered your investment was under water as the typical monthly revenue retreated to 20% of the peak! Our client isn’t unscrupulous so they would never do this…..but always remember, buyer beware!

So now we know we are dealing with a domain that is seasonal but the second question that needs answering is whether it is being properly optimised during the entire year? The only way to answer that question is to look at where the raw traffic was sent and examine the revenue it generated.

The first table below shows the traffic sent to the different monetisation providers (Ad networks are aggregated) over the period of twelve months.  Remember this is the raw unfiltered traffic and is not impacted by any filtering algorithms the different monetisation providers may apply before displaying the views in their interface.

The two letter codes at the tops of the columns represent the parking companies the traffic for this domain was sent through to. In order they are; Sedo Domain Sponsor, Voodoo, Bodis and Parking Crew.

The second table is the Revenue the traffic generated from the above traffic and the third table is the normalised RPM. Don’t forget the definition of a normalised RPM is the revenue divided by the raw traffic multiplied by one thousand. This metric will allow us to accurately compare one monetisation provider against versus another and know beyond a shadow of doubt who is performing the best.

For simplicities sake, I’ve removed all mention of the direct advertising networks from the Winner table and concentrated on the traditional parking solutions that were sent traffic.

Starting in January this year we can see that Voodoo was winning with normalised RPM (nRPM) of 68.94 and close on its heels was Parking Crew with $65.69. Logically, Voodoo received the lion share of the traffic followed by Parking Crew while Sedo and Domain Sponsor received enough for sampling purposes.

In February, circumstances have really changed with Sedo shooting to the winning position and snagging a lot more of the traffic for both February and Mark. And so it goes, month after month we can examine the numbers and see who is winning the traffic at every stage until we have the below table.

Sadly, for A.COM, Domain Sponsor wasn’t the overall winner in any month but it’s not uncommon to have one monetisation company not win for a long time and then suddenly spring up. What is clear in the tables of data is that the “winner” is constantly moving. I didn’t do the analysis but my guess is if I got down to the daily level then the flow of traffic between winners would be even more dynamic.

So how did this analysis help the client? They needed to report to their board with confidence that everything that could be done was being done to optimise their domain traffic to the highest paying solution at any point in time. This data proved this was the case.

The data also provided them with the necessary information to back-up the supposition that some domains fluctuate all over the place. It’s one thing to suggest seasonality or variability and quite another to prove that it’s the case. Once again, the data provided the necessary information to support this hypothesis.

The final question that needed answering was whether A.COM was actually performing less than twelve months previously. The answer was a resounding no. The RPM twelve months ago was $115 while now it was $146. What triggered the investigation was the previous month the RPM had dropped to $95. Remember it’s a seasonal domain, no one wants to purchase travel services at the end of summer. So this domain clearly experience a post-summer slump and then quickly rose out of it.

So analysis is a lot more than just mobilising a lot of numbers. It’s also about interpreting what they are telling you about a domain so you can understand whether you are actually getting the best performance at any point in time.