This past week I saw my son Timothy come alive. I’d just stepped into the house after the 30 hour journey from ICANN, Dublin and he told me that he’d just been found out that he’d got a job. This wasn’t just any job but one that involved him going from school to school teaching children English through theatre in Italy.

After competing for the position from applicants from all over the world he’d managed to secure the position and he was over the moon! I was so happy for him and it wasn’t long before the whole family was caught up in his enthusiasm.

As a part of his application Tim had to put together a “show reel” for the company in Italy which showcased his acting talents. I must admit that it was hilarious and that his Russian and Irish accents for the big bad wolf and three little pigs was a scream.

There’s something really special about achieving a goal. Whether it’s getting a new job, building a business or achieving something personally in your life. It’s more than a tick….it’s an inner sense of satisfaction that causes you to smile on the inside…..and then let it burst out on your face.

For the past eighteen months the ParkLogic team have been completely redeveloping our entire platform from the ground up. Several weeks ago at “The Domain Conference” we released a sneak preview of the dashboard (you can see this at http://next.parklogic.com) and just this past week we completed migrating our complete hosting infrastructure to a new environment as we gear up for Next.

The redevelopment was a big audacious goal that had a lot of risks with it as the team balanced the needs of the existing platform with the new development. The good news is that we can now see the light at the end of the tunnel….and it’s not a train coming in the opposite direction.

ParkLogic Next will be released in early 2016 and like my son I’m going to have a great big smile on my face at NamesCon. It’s not just that the platform is much better than our legacy system. It’s the fact that a goal will have been achieved and what's inside will reflect on my face.

Have a great weekend!

I regularly dive into "big data" to try and better understand what is happening with the performance of a client’s account and to determine whether action needs to be taken. It was at this point in time that I was faced with some very puzzling numbers to muse over.

It was always assumed that the click through rate (CTR) was an indication of user intent. The goal of any optimisation strategy was to maximise the CTR by making the advertisements more relevant to the domain so that the user then clicked. This seems to make logical sense but it’s clear from the recent round of data that something else is at play.

Likewise, the Earnings Per Click (EPC) was a measurement of advertiser competitiveness. The greater the demand for the keyword the higher the price paid by advertisers….it’s essentially a reflection of the Google auction process.

In the past, domainers would select higher paying relevant keywords to maximise both the CTR and EPC. For example, I may set “Mortgage” as the keyword rather than “House Auctions” for a real estate domain because “Mortgage” had a higher EPC and around the same CTR as “House Auctions”.

This whole context sensitive mapping of the domain to the keyword was effectively thrown out when Google migrated to psychographic user based targeting. In other words, Google is now trying to match advertisements to the user and not necessarily the domain.

For example, if you’ve been searching for vacations in Bali recently then when you can go to parked golf related domain you will often see vacation advertisements. This seems to make sense until I pulled out the stats for a couple of accounts…..and this got me questioning what is really happening.

Both samples have thousands of domains and lots of traffic and are not being distorted by a single domain. The lines are a level 4 polynomial trend line for both CTR (blue) and EPC (red). Incredibly, both charts have a similar profile where the CTR and EPC effectively mirror each other and create an inverse impact. So what does this all mean?

Around two years ago Google migrated all of their parking partners to using what is now known as Custom Ad Frame (CAF). Essentially this means that all parking pages are now largely served by Google and not the parking companies themselves. The goal of this change was to open up Google’s premium advertisers to the domain channel….which is good news for domain investors.

The problem I have is that the CTR component of the graphs suggest that Google is playing a really strange game. They appear to be constantly moving from accurately targeting users with advertising to doing it really badly. Although some variations are expected, the wild swings from May to Sept are a bit perplexing. This seems to fly in the face of the Google ethos to always provide the user with better and more accurate results.

In both cases the overall CTR since May has dropped significantly while the EPC has risen! What this suggests is that during the summer people click less often but advertisers pay more. This is the reverse of what I would expect. During the summer period I would expect users to click less (distracted by the sunshine) and since advertisers are on vacation many of them would exit the auction process. This reduces demand and you would expect EPC rates to decrease and the traditional summer downturn would result.

What the data suggests is that as better quality advertisements (ie. higher paying) are displayed then people click on them less. This seems unlikely and combined with the shapes of the graphs it suggests a level of manipulation of the data behind the scenes.

So the question really needs to be asked, "What is CTR and EPC?" Unless we now live in a world where users can discriminate their clicking behaviour by magically known the EPC rates then there has to be something else at play.

I plan on unpacking this further in the next articles in this series as I explore what is actually going with domain traffic.

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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.

I’ve recently engaged a number of domain brokers to assist me with the sale of a few domains. The first thing I said to them was, “What do you think the domains are worth?” Despite my years in the industry I am unlikely to know what the “sales” market is saying right now. I’m a domain traffic specialist, not a full-time sales broker.

What I’d done is bypass the question of, “What I think the domains are worth” and jumped straight to getting the professional advice. In many respects, I’m an ideal broker customer. I want their advice and I will then accept it…..so the domains are priced to sell!

I’ve received a number of offers for my domains from the brokers and they all seem to be asking whether I want to sell. In my opinion, this is a little silly. The reason why I engaged the brokers is to GET their advice. What I would like to see is an email which says, “Here’s the offers Michael, based on my experience and current market comparables I recommend that you accept.”

What I’m really saying is, “How the heck do I know whether I should sell or not?” I want the broker to provide me with their professional recommendation. Once I have this recommendation my reply would be, “Done! Let’s go through the escrow process.”

This brings me to a VERY important point. I personally would only use Escrow.com for escrow services with domain brokers…the reason being is that I know they are completely legal and regularly audited by governmental agencies. Yes, I know they’re a regular sponsor of my blog but I would only allow sponsors that I’m happy to recommend. Using an escrow service is particularly important when you have no idea who the buyer is.

Once a transaction is completed some really stupid domainers go and research the buyer and then offer additional domains to them. Their whole goal is to cut the broker out of subsequent deals and save the commission fee. This is the most idiotic behaviour I’ve ever heard of!

Let’s unpack this…..the domainer is placing no value on the broker’s professional advice. Despite the broker having a network of potentially thousands of buyers the domainer is placing all of their eggs in a single buyer’s basket. The broker has no incentive to ever work with the domainer again.

I can’t say this for a fact but I wouldn’t be surprised if brokers talk and warn each other of working with certain domainers that try this practice on. Whatever you do….don’t try and go around your broker. They play an important part in the domain ecosystem and you’ll ultimately end up by eroding both your reputation and your ability to sell your assets.

Forget all of the above reasons for not going around your broker and just consider this simple statement. This type of behaviour is what is known as, "acting in bad faith". In other words, it's conduct that you really shouldn't be associated with and is likely to really damage your reputation as a domain investor.

I wish all of the brokers and domain sellers the best of luck with the sale of their domain portfolios. Feel free to leave a few comments below of your own experiences with selling your domains. I should also mention, that I DO NOT broker domains for anyone so please don’t ask me to do so.

When you really think about it, professional domain brokers have one of the most difficult jobs in the world. They have to manage both a domain owner’s and a potential buyer’s expectations and walk a tightrope whether they get paid or not. I’ve been doing a lot of thinking about the brokering industry and thought that it was about time I wrote an article or two on the topic.

Domainers, engage the services of a domain broker because they want a domain(s) sold. The reason they do this is that to date they have not been able to sell their domain at their anticipated price point. They then pass their domains to a broker in the hope that by engaging the services of a professional they will succeed in attaining a great big windfall.

So what’s the first thing that a domainer does? They tell the professional what their domain is worth. How stupid is that???? The reason why they’ve just engaged a broker is to get their professional advice on the value of the domain. A good broker is a person that should have the pulse of the market….not the domain investor that has, to date, fundamentally failed to sell their asset.

Here’s the difficulty for the broker. In most cases, the domain is worth precisely what someone is prepared to pay for it. Sure, they can guesstimate, but a more professional broker will more often than not say they need to do some research on the sale price. What they are really saying is I need to make some calls, rustle a few bushes and see what falls out. This makes perfect sense to me.

More often than not, the domain owner has completely unrealistic expectations on the price. If you ask 99% of domain owners for a valuation of one of their domains they will ultimately guess. There’s no science or numbers behind what they want….they just want it. That’s all very well but what they want for the domain and what the market is prepared to pay are two entirely different things.

For example, you may want to sell one of your domains for millions of dollars but if the market is telling you it’s worth $10K then you really need to revaluate at your expectations.

The problem arises when the broker looks at what the market is telling them and then the often crazy number that the domainer wants for their domain. If the numbers are way apart then the broker knows they will never sell the domain and make their commission….so why bother starting.

If the numbers are closer together then the sale is more likely to happen and the broker can either do a quick sale or try to push things upwards. They are now wrestling with maximising value rather than whether they will put food on the table.

For example, let’s imagine that a domainer values their domain at $100K (ie. the reserve price) and the broker values it at $20K. Put yourself in the broker’s shoes for a second…..deep down they know that it will be highly unlikely if they are able to meet the seller’s price…..so why would the broker waste their time? On the other hand, if the reserve was $20K then the broker is now working towards a $30K+ sale value to move the domain on and maximise their commission.

What I don’t understand is the number of brokers that are still doing deals where they only receive a commission on the sale of a domain…..this is what I would do if I was a broker.

I would say to the seller something like, for every $1,000 that we are apart on the domain valuation you need to pay me a retainer of $10/month in advance. If we look at the above example this means the seller can either reappraise their $100K reserve or reduce it to the broker’s valuation. If the seller refuses to budge then they need to pay $800/month for the broker’s time.

What this model does is:

1.      Pay the broker for their time attempting to sell at unrealistic prices.

2.      Incentivise the seller to reduce their expectations in line with the market.

3.      Ultimately start to increase the liquidity of domains as more are sold.

We can argue about the price points and whether it should be $10/month/$1000 or some other figure but the model seems to stack up pretty well.

In the next article in this series I’m going to share some of my own experiences with engaging the services of a broker and also some of the stupid practices of sellers.

Once again I’ll be heading off overseas to meet up with a gathering of individuals that are entirely immersed in the world of domains. This time my trek leads me to the fair land of Ireland and a people that seem to sing their words rather than speak. This is a fact that my wife absolutely loves about the Irish!

So after a short hour or so visit to Dubai and twenty-four hours in a flying tin can I’ll arrive in Dublin. After surveying the conference agenda, the first thing that has struck me about ICANN is the crazy number of acronyms. I’m a programmer and also a private pilot and let me assure you that ICANN has managed to surpass even these two noble pursuits with the number of abbreviation they inflict on everyone.

A classic example is on Sunday. I’m trying to work out whether I should go to the GAC, ICG, RySG-CEO TLDs, GNSO or ALAC sessions? Of course there is always the ccNSO or ccNSO SOP or BC-BRG as options as well. Seriously???? It looks worse than my kids texting their friends!!! I must admit that there is one session that looks particularly good…..”lunch break” J

So why am I going to be attending ICANN? It’s really simple, ICANN is a place where business gets done. It’s full of potential ParkLogic clients and the information that you can pick up from talking to individuals is nothing short of brilliant.

Like any organisation, it will take some time to get to know the ropes but this isn’t my first and I know a lot more people who attend ICANN than I did a few years ago. It will be great catching up with them to find out how many of the rapid changes to the Internet over the last 12 months are impacting their own businesses.

In the meantime, I’d better go and pack otherwise I’ll miss my flight….see you all there!

Cheers!

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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.