This articles continues directly from the previous in the series on conducting a traffic test (click here to view). I then create a summary tab which pulls all of this data together so that at a glance you can see what’s going on. Since we create these packages of analytics for clients on a regular basis you’ll have to excuse me if I refer to the testing company as ParkLogic.

In the summary, you need to know the total amount of revenue (daily) earned by the testing company and the baseline. This will provide the lift above the baseline. In the case of the screen capture there is a $190.94/day increase which has then provided a 127% uplift versus the baseline. This is quite a good result.

I then like to find out what was the maximum amount that ParkLogic was winning by per day. This is so that clients that wish to take all of the domains away can then leave the winners with us. In this case it’s $457.54 per day which isn’t that bad considering the baseline for ALL of the domains was $715.40.

In fact, if you leave the winners with ParkLogic and send all of the losers back to where the baseline source then the result should be $1172.93/day versus a total baseline of $715.40. In this case the result is a 64% uplift in revenue and only assumes that the baseline produces the same results as previously attained.

I’ve been a parent for over a couple of decades now and during this time I’ve learned a few things about bringing up our children. The biggest challenge that I had to overcome within myself is to let my kids fail.

Since my own children were born, all I wanted to do was protect them from whatever may happen. Be that a stubbed toe, bullies at school or what they watch on television. A switch went off in my head that said, “I need to shield my kids from anything that can harm them.”

The problem was that as the years went by I found that I couldn’t and shouldn’t protect them from everything. In order for them to grow up into adults of character they needed to experience the consequences of their actions and not be constantly protected by Mum and Dad.

For example, when our kids were little they would be fascinated by fire. I would tell them not to touch it and they wouldn’t because it would burn them. If my 21 year old son picked up a burning stick then I’d now tell him he was an idiot.

When I talk to my friends, what we all seem to have in common is the challenge of moving from a “parent/child” (do what I say) to “parent/advisor” (I have wisdom) role. I’ve always advised people that when they have a problem seem somebody not just anybody to receive wisdom.

When I was speaking at NamesCon in January I said that I would like to show the attendees the best computer game I’ve ever played. It has all the aspects of both a tactical and strategic game with a bit of time travel for good measure. Everyone leaned forward with expectation…

I then put Excel up on the big screen in the room. It’s safe to say there was a bit of laughter. Let’s think about it for a second, Excel allows us to answer questions about the performance of our domains like no other application can. We can view the past, compare it to the present and even predict the future.

Right now we are going to mobilise the data that we have arrayed from the previous articles in the series so that we can understand what is happening with our domain traffic. This will be a VERY high level view of our traffic test but I believe that it will help get some answers to our questions.

The first thing we need to do is to ensure that all of the baseline data is in the same currency as the testing monetisation source. Once this is done then we then need to convert everything to daily data. The reason why we need daily data is that it gets rid of the problems associated with 28/30/31 days in a month and also allows us to later compare the data against daily from the new testing source.

Next, create another tab in Excel and call this “Latest Data”. When capturing data make sure that you have multiples of 7 days so that any variability caused by the weekends can be minimised. All of this data needs to be brought back to a daily format so that we can then compare it to the baseline.

Make sure you check the DNS settings of EVERY domain in the test so that domains not pointed correctly can be removed. There’s no point in penalising a test by having domains with baseline data and no data from the testing source.

Now create a tab called “Analysis”. In this tab you need to add you complete list of domains in column A, Column B, C and D are for the baseline views, revenue and RPM. Columns E, F and G are for the new monetisation company’s views, revenue and RPM.

Now that the data is sorted out you are now in a position to conduct some analysis.

I’ve finally completed the final rewrite of my debut science fiction book, Battleframe, in the Mindwars series. I’ve paid an editor to read the manuscript and mark any obvious errors. This should be completed later this week.......so hopefully it won't be long until I have my finished manuscript ready for publishing. Hooray!!!

My wife, Roselyn, happening to be sitting next to me at the time I and I turned to her and said, “It’s finally done.” I don’t know who was more relieved, her or me!

It’s been a twenty month journey getting to this stage and it seems that the last 10% of the book has been the hardest and most time consuming to complete. For those of you that are wondering, Battleframe is around 110,000 words....it's a decent size.

So what has to happen now? After the editor comes back with any fixes (hopefully not too many) I’ll use a standard paperback template provided by Create Space (an Amazon company). I’ve already purchased my ISBN numbers so I’ll add them to the document for the electronic and the paperback version of the book.

I just have to clean up my biography, rework the blurb on the back and ensure that the artwork is good to go for the cover. I think that there will only be a few tweaks here and there for these items.

Once the book is actually published I need to update my Amazon author profile, website (michaelgilmour.com) and let everyone know that it’s available. I have a very modest marketing campaign ready to go and with any luck I’ll get a few positive reviews.

OK, here is the shameless plug…..I would like to encourage everyone to please sign-up to michaelgilmour.com and participate in the forum. You can ask questions about me, the book, characters, plot or just about anything! The more the merrier. I’m also making available restricted content of maps, diagram and sneak previews for anyone that signs-up.

Fingers crossed that the editor won’t be too horrible to the manuscript. 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. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.

In the previous articles in this series I discussed the importance of baseline data and what you should be measuring. I’m now about to dive into the most important metric that you can ever use to evaluate the success of a traffic test, the normalised revenue per thousand visitors.

I want to apologise to all those readers where mathematics isn’t your strength….that’s OK. I will try and make this article as simple as possible so that it gets across the point.

Many domain owners have learned to pay attention to the revenue per thousand visitors (RPM) that is produced by the various parking companies. The reason for this is that it takes into consideration the variation in the traffic levels for each domain. So really what is RPM? The formula for RPM is the following:

Revenue / visitors x 1000

This makes sense until you get under the both revenue and visitors. For a start, visitors is actually filtered traffic and since each parking company filters traffic differently than this number changes for each company. Another way of viewing visitors is:

Raw Traffic x Parking Company Filter

Then there is the Revenue number. What revenue number should you be using? The estimated numbers, the number confirmed 2 days later, the number less clawbacks, the number less account adjustments etc. There are about 7 different revenue numbers that need to be examined for each domain!

For example, over the years we found that some monetisation companies would say that they will pay more for domain traffic during the month and then do an account adjustment at the end of the month. This meant that they were effectively bribing the traffic routing algorithms to during the month and then taking all the money back at the end. To understand who the winner is you need to take this type of behaviour into account.

So let’s look at our formula for RPM now:

(7 Different Revenue Numbers) / (Raw Traffic x Parking Company Filter) x 1000

Because we don’t know what the parking companies use to filter their traffic let’s imagine that we can actually count the Raw Unfiltered Traffic that we send each company for each domain. Let’s also imagine that we are able to sort out the revenue and with a bit of magic work out the actual revenue number for each domain each day. The formula then simplifies and looks like the following:

(Adjusted Revenue)  /  (Raw Traffic)   x  1000

This is the normalised RPM (nlRPM) and it allows you to directly compare any monetisation company against another. What we do is count each bit of traffic that we send each company each day and then measure the adjusted revenue that the traffic generated. When you do this for all companies you get a number for each company so that you can then know which one is actually paying the most.

Let me say from the outset that this starts to get REALLY complicated! This is also what you need to consider if you want to know who is actually winning your traffic at any point in time.

Thankfully, at my company, ParkLogic, have servers and algorithms that all the automatic mass calculation of all of these numbers. We then use these numbers to route the traffic to the winning company. Each day, we have servers that all they do is process data for about 15 hours to get to the nlRPM.

So let’s imagine that we have a domain that has a huge nlRPM and it’s smashing the baseline data out of the ballpark. Do we claim victory? Heck no! Even when you have the normalised data you need to understand WHY the domain is winning.

For example, let’s imagine that you have an education related domain and you are comparing the baseline data in July versus September. I can almost guarantee that the nlRPM will be higher in September as school’s back and this will attract the educational advertisers!

To put everything into context, the nlRPM is like the science of domaining….you have to have this number really know how you are doing. Understanding why the nlRPM is changing is the art….this is where experience comes into play.

I think that the gold rush provides a really good analogy for traffic monetisation. In the past, there used to be gold lying on the ground everywhere and you didn’t have to do anything to pick it up. Today you have to drive a shaft 3 miles deep and run side passages that follow the seam of gold. This is what I’m talking about with the nlRPM. The gold is still in the mine but you just need to dig it out and this is what I do day in day out.

Please leave a comment or send me a message if you would like me to run a webinar on how to run a properly constructed 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. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.