One of the easist mistakes many domain investors make is paying too much attention to their average daily revenue and not really understanding what it really means. The average daily revenue is made up from all of the individual earnings of each domain in a portfolio…..which makes sense but underneath that statement is a lot of hidden meaning.

A couple of years ago I met with the CEO of a large domain portfolio and they were amazed when I began to unpack the data that made up their average figures. So let’s look at a number of the misconceptions that many people hold to around their average numbers.
 

The Law of Averages

It's best to look at an example to illustrate what I'm talking about. Let's imagine that you have two domains in a portfolio, A.com and B.com. The average earnings per day for A.com is $1 and B.com is $0.10. Obviously, the average daily earnings for the portfolio is $1 + 0.10 = $1.10 per day.

If you are able to increase the earnings of B.com by 50% (which is a lot) then the earnings become $1.15 per day....which is barely a blip on the radar for most portfolio owners. Now here's the interesting part. Most people have 10 times more type B domains compared to type A domains. This means the average daily earnings is actually $1 + 10 x $0.10 = $2 per day.

If we increase the earnings of all type B domains by 50% then the results is $3 per day or 33% increase overall in earnings. This is a substantial uplift and is ACTUALLY ACHIEVABLE....all you need to do is really think about how your domains earn revenue. Here are three misconceptions that many domainers don't really think about.
 

Misconception One - Park All Of Your Domains At One Place

The problem with most domain owners is that they leave all of their domains with a single monetisation provider. This strategy can have a dramatic impact on your earnings.

After collecting data across the last 8 years at ParkLogic we've seen that no single parking/monetisation source wins more than 25% of the traffic at any point in time. This means taht you could be getting paid more for your traffic 75% of the time!

What's interesting is that this doesn't really depend that much upon your revenue shares etc. You could be getting paid 100% and the results are still much the same. The reason for this is that around 30% of the domains move every 3 months to a new higher paying solution. Finding out which 30% should move is part of our "secret sauce".

If you want to increase your revenue then do NOT place all of your traffic domains with a single source.
 

Misconception Two – Google Pays The Most

As much as parking companies endeavour to optimise traffic they largely have their hands tied behind their backs by Google. How is this? For a start, assuming that your domain is not blocked by Google (ie. it’s not a bad domain) then contractually the traffic for that domain MUST first be monetised by Google to the exclusion of all other monetisation solutions. This means that the domain traffic ONLY gets Google’s best price and this is not necessarily the top price that a domainer can receive for their traffic.

Never forget, that although Google is a key domainer partner they are obligated to first increase shareholder value and that improving your revenue comes in a distant second place. As can be seen from the below graph, for the past ten years Google has been driving down their Traffic Acquisition Cost (TAC). The domain traffic channel is a part of the TAC.

I recently conducted a test on a small domain portfolio that were being paid less than 1RPM by Google by routing the whole lot to tier 2 providers. The result was a 37% increase in revenue. This increase would never have been realised if I hadn’t conducted the test.

The next stage in the test is to continue to route the domains that were performing better on tier 2 and re-route the balance back to Google. Finally, the optimum answer is to then automate the process so that the traffic will always be paid the highest price by the entire market….and not just the Google market.

It’s clear that by continuously driving TAC down Google has now reached the point where tier 2 providers are clearly competitive. I don’t know any domainer that wouldn’t be happy with a 37% uplift in revenue! In a future article I want to really pull apart TAC and what it means for domainers.
 

Misconception Three - The Euro to $US Exchange Rate

What many domainers don’t take into account is that the Euros/$US exchange rate can play a very real part in the average performance of a portfolio.

For example, let’s imagine that we are comparing the performance of a portfolio 30^th June 2015 against the same time in the previous year. During this time the exchange rate has decline from 1.37 $US per Euro to 1.12 $US per Euro. That’s a decline of 22% that impacts negatively the numbers of any earnings for US domainers earned in Europe. Conversely, European domainers are loving the decline in their currency as the majority of online advertising flows from the US and they get paid via the US/Euro exchange rate!

Let’s make this a little simpler to understand. Let’s image that in June 2014 a European domainer parked with Domain Sponsor (US company) and they earned $1. They would have received $1 /1.37 or 0.73 euros. Ignoring all other effects that same domainer would now earn $1 / 1.12 or 0.89 euros. This is a big change in earnings that is largely brought about by the currency fluctuations.

The massive decline in the euro has meant that European domainers are enjoying a free increase in their parking earnings courtesy of absolutely no one. So many of the German domainers really need to go and thank their southern Greek friends.

So when a baseline is taken from a previous point in time....one of the things that you may have to consider in determining the success or failure of a test is the exchange rate. You also need to think about where your traffic routes through to and whether you can take advantage of the local advertisers and exchange rates.

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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.

In every industry there are people that we all can be tempted to aspire to be like. I’ve watched some domainers desperately believe that if they follow an industry celebrity then they will achieve the same level of success. Sadly, they get swayed by a personality and completely ignore the results.

When you’re at a conference it’s really easy to get caught up in all the hype and you can fool yourself into believing that everyone is much more successful than you. Let me say from the outset that the great majority of numbers that you hear can be divide by at least three. So don’t panic and just keep your eye on your own key business metrics.

When you get home from a conference and sit there alone wondering how you’re going to pay your domain renewals, the parties and personalities seem to become a distant memory. All that counts is the bottom line.

So don’t be swayed by the personalities…..dig into your own numbers. It takes a lot of work and skill to understand what is actually going on with a domain portfolio so that you can make sound business decisions rather than an emotional ones.

Don’t get me wrong, I love having a great time as much as the next person and it’s often the personalities in our industry that make it so exciting and vibrant. But business is all about making wise decisions rather than jumping from one miracle cure to another because someone said that the new solution was just so awesome!

Always ask yourself the question, "Who is ultimately who is looking after my valuable assets?" Are they measured individuals that will treat your family’s inheritance with the respect that it deserves or will they party like there’s no tomorrow on the value of your domains?

I don’t know about you but there are some personalities in this industry that I wouldn’t let within a hundred feet of my assets! The short-term excitement of being with these individuals may be exhilarating but remember when you leap off a cliff the fall doesn’t kill you….it’s the inevitability of the ground rushing towards you that does the damage.

Our whole industry is built on numbers. Numbers of people come to our domains, numbers of people click and numbers make up our revenue. Don’t lose sight of the fact that it’s the numbers and not the personalities that we should be watching.

There's a great saying that goes something like this, "Don't speak to the butcher if you want to invest in precious stones....speak to the jeweller." In other words, find the real experts in the industry and get to know them. They are often the ones that are quietly going about do their work.

And ultimately, get inspired by others but don’t aspire to be like them…..just be yourself.

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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 been asked a number of times about who are the really good players in the domain industry. I thought that from time to time that I would highlight these individuals that quietly go about their business. They are people that are generous with their time, are absolutely trustworthy and great fun to be around…..in essence they are the heart and soul of what it means to be a domainer.

Jothan Frakes

I first met Jothan many years ago at a TRAFFIC conference and we talked into the small hours of the morning about the domain industry. During this time I gained an enormous amount of respect for him as one of the most knowledgeable people in the industry.

Our relationship really cemented at the TRAFFIC Downunder conference when he was part of a group of domainers that flew light aircraft back from the Gold Coast in Queensland to Melbourne. I was one of the pilots and it was a great time getting to know Jothan on both a professional and personal level.

Jothan has played many diverse roles in the domain industry but it is clear that he has a real gift for running exceptional conferences. From founding the successful Domain Roundtable conferences in 2006-7, to being intimately involved with DomainFest while it was with Domain Sponsor and now with the largest industry gathering, NamesCon. Jothan has developed a unique gift for conference formats, topics and promotions. Even now he is launching a series of regional conferences under the DomainFest banner – information on the next one can be viewed at doaminfest.asia.

The reason for these successes stems from the fact that Jothan consistently works incredibly hard at whatever he puts his hand to. When you speak with him you have his 100% attention and if he doesn’t have time then he’ll politely let you know.

Jothan has spent countless years attending ICANN conferences and helping raise the domain investor flag with registries, registrars and policy makers. Without his endless lobbying domainers may not have some of the protections over their assets that they enjoy today.

What many people may not be aware was that Jothan was intimately involved with the approval process for many of the new gTLDs. He conducted this extremely confidential work as a contractor for accounting firm KPMG and clock up endless numbers of air miles between the USA and India.

As you may have ascertained from his professional life, Jothan is one of the most connected people in the domain industry, knowing the domainer, parking, registrar, registry and ICANN sides of the business. If you ever need an introduction to almost anyone then Jothan is very likely able to make the connection.

When I first met him, Jothan’s one failing was his desire to help everyone and sadly I’ve seen people take advantage of his big heart. Thankfully, this exceptionally generous attitude has been tempered with wisdom as he’s continued to develop his professional career.

Personally, I count Jothan as a great friend with whom I have complete trust and confidence. More than all of these things, he is a down to earth fun person to be around that always has a great joke (seriously, he has some really good ones!) and a welcoming smile. I have had the privilege of meeting his wife and the three of us have had way too much fun together!

These are only a few of the reasons why Jothan is in my “Good Player” list. No matter how busy we both get we always make it a point of catching up at conferences to swap stories and learn from each other. He is the quintessential “Good Player” of the domain industry.

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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.

A friend of mine suggested that I watch the television series “The Newsroom”. The show is about a fictitious news show based in New York but it cleverly weaves in real life stories and issues. Jeff Daniels acts brilliantly as the anchor man and he has a staff around him that provide information for the sixty minute news segment.

The opening scene in the first episode was Aaron Sorkin (the writer) at his absolute best. Daniels’ character had always played it safe when it came to the balance between ratings and telling the truth….deep inside it was killing him. During a town hall meeting at a college he was asked to answer the question in one sentence, “Why is America the greatest country in the world.”

After a number of platitudes Daniels’ character finally cracks and gives a tirade of facts that proves that America is no longer the greatest. He finishes his speech with almost a cry from his heart that it could be again….

Now I find myself in a strange predicament….I’m Australian, watching an American show that is essentially decrying the downfall of America. I want America to be great and I am sick and tired of Americans pulling down their own country….let alone foreigners.

America was built on principles that inspire, challenge and reward individuals to believe that anything is possible. I lament the fact that America’s leaders have become so wrapped up in winning the next election that they’ve forgotten to present a big vision to the people.

A number of years ago I had the privilege of going through President John F Kennedy’s library in Boston and during that time I viewed one of his most famous speeches that he made in 1962. In it he inspired America by saying, “We choose to go to the moon…..not because it’s easy but because it’s hard.”

About ten years after that speech a six year old was sitting in the living room watching Apollo 17 lift off and I said to myself, “WOW, America can do anything it puts its mind to!” America has relinquished its place as the world leader in many fields not because of a lack of ability but a lack of desire.

I regularly go to the USA to attend or speak at conferences and inevitably the subject of politics gets brought up around the bar. Overwhelmingly there is a feeling of despair from my US friends as they talk about the future almost not being there for their country. Corrupt politicians, business leaders and justice for those with money seems to settle like a wet blanket on the conversation…..it’s sad.

So why do I want America to rise up and be great again? As I said, I’m from Australia and although I love my country, I’m also a realist. Although globally, Australia punches above its weight our population is that of greater Los Angeles.

The difference between Australia and the USA is that Australia was given birth as a penal colony while the USA was from pilgrims. Australia is a nation that prides itself on pulling down our leaders and cutting down anyone that is successful. In fact, if someone is successful then by and large we assume that they got there by doing something wrong. Yes, we have the sense of “mateship” and many other good qualities but we don’t have the vision to strive for a better humanity. For that, we really do need the USA.

You can ask my wife that whenever I go to the USA I get inspired and reinvigorated that anything is possible. I think that many people that live in the USA have become accustomed to this environment and risk looking down rather than looking up. The moment that I step off the plane in LAX I feel like there is one opportunity after another and all I have to do is reach out and grab them. Seriously, it’s the most amazing feeling you could ever possibly wish for.

As a foreigner, I actually don’t have much faith in the current crop of American leaders to pull the country around and inspire the world forward. What I do have is an incredible faith in the American people. Many of you need to reacquaint yourself with your entrepreneurial drive and stand up and say to your politicians that, “enough is enough!”

Back in the 70’s, a generation marched on Washington and filled to overflowing the area between the capital building and the Lincoln memorial. They weren’t happy with their leaders and said, “We’ve had enough!” It wasn’t long afterwards that the Vietnam War ended. My encouragement to the current generation is to stop looking at your smartphones and look at the world around you.

From my perspective, America can be great and more importantly America is still great….to all Americans, you just need to realise it. It’s an incredible country that is currently wrestling with some really tough issues. If the people that recently had friends massacred in their local church are any indication of the latent strength of character of the average American then I believe there is hope. They forgave the mad gunman and took the higher road that wasn’t down the path of revenge. What an incredible inspiration to the world!

The most wonderful thing about America in the past is that it was doing good not just for America but for humanity. It assumed the role of world leader and rose to the challenges that the world presented. Scientific breakthroughs, medical advances and technological wonders enriched the nation and provided all humanity with marvels that would appear more like magic a few generations ago.

This entire post came from a television show…..and yes, that came from America as well. You were once a great nation, you still are a great nation and will be into the future. I implore you to stop looking inwardly and set your sights on another great big vision that is inspirational to the rest of us. Let the world envy you at your audacity to “do things not because they are easy but because they are hard.”

Have a great weekend!

Here is the link to the Youtube video that has really inspired this post.
https://www.youtube.com/watch?v=1zqOYBabXmA

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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.

The other day I received my first royalty check from Amazon! I’m not about to retire but I must admit that it felt incredible to be receiving money for selling copies of my scifi book Battleframe. I normally get packing slips from Amazon so to receive a cheque was a new experience.

So what’s happening with my marketing efforts? One of the difficulties that I’ve been trying to wrestle with is the fragmentation of the science fiction and fantasy community. To personally participate in all of the different forums and subtly let people know about Battleframe is next to impossible. I would say that my hourly rate would be somewhere in the vicinity of about two cents.

To make matters “worse” my own business, ParkLogic, is going through a boom time. The result has been that I’ve backed off the majority of my marketing efforts….there’s only just so much time in the day.

So what are my plans moving forward? I’ve decided to really focus on finishing book two of “The Mindwars” and growing my readership with Battleframe (ie. Book one). My marketing goal is to build a readership base with book one and ultimately earn revenue from book two, three etc. This is great for readers because it allows them to get a taste my writing without having to outlay any cash.

My primary focus is now on completing book two. Mild spoiler alert!!! For those of you that have read Battleframe I would like say that Selfia and Acheron finally get their honeymoon. Out of all of the questions that I get asked, this is the one that I get asked the most. I read the chapter to my wife and daughter and they love it as the honeymoon is in a very unusual location. LOL! I must admit that it never occurred to me that readers would get disappointed that the two characters hadn’t had their honeymoon as yet.

It may seem a little silly but this is a really important lesson. Always listen to the feedback from your customers for whatever product you are selling. They will freely share with you some incredible ways that you can improve what you are doing and then willingly pay for it!

I put a lot of time into writing across this last weekend and I’m about halfway through the biggest space battle scene that I think I’ve ever read….let alone write. There are thousands of ships, bases, satellites and a desperate struggle…..and this will be in the first few chapters of book two! As a hint….the battle ties in to the prelude of book one…..

As you may have guessed, I’m finding that book two is really coming together. I’m planning on releasing it prior to Christmas and I can’t wait to get it into the hands of an editor. The book really expands the scope of the galactic conflict and opens up so many new possibilities in the unfolding story.

If you would like your own ecopy of Battleframe then register at SFFAuthors.com and enter the promotional code of “Whizzbang” (expires at the end of Aug 2015). BTW, if you have read Battleframe then it would be awesome if you could write a brief review on Amazon - click here.

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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.