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.

My daughter Elise had her first game of netball for the season on Saturday. For those of you that don’t know what netball is, it’s like basketball with no backboard and you can’t dribble. She played brilliantly and the whole team just seemed to come together so they ended up winning.

I’ve heard many parents (myself included) fall into the trap of saying to their children. Winning isn’t important, it’s the fact that you play the game. There is a certain amount of truth to this statement but if winning isn’t important for the little darlings then why do we keep score? As parents, we think that are kids are so stupid that they don’t realise the fallacy of our encouragement.

The fact is that in life winning IS important. It’s important because it inspires you to try harder, push the limits and think through problems.

Could you imagine if Alexander Fleming, who developed the antibiotic penicillin, just pottered along rather than strive to do something that had never been done before? Or how about, Gordon Moore that developed the first microprocessor with Andy Grove at Intel. My guess is that we’d all still be on 4 bit computers.

The whole essence of our education system is to ultimately produce people that do doctorates (plus educate the masses). Doctorates are only awarded to individuals that have broken new ground for the whole of humanity. They aren’t just playing the game, they’re playing to win in their field of study. By the way….there is no reason why you have to be at university to win the equivalent of a “doctorate”.

My wife and I were chatting over breakfast and I was telling her that we are setting some new records at ParkLogic. In passing I mentioned that I was looking towards the next goal. She asked if I was ever going to be happy. Of course I’m happy I responded, I’m happy that I can now push onwards even further.

I love goals because they determine whether I’m winning or losing. I’m not comparing myself to other people (that is really wrong), I’m comparing myself to me. My goals inspire me forward and get the creative juices firing to push past problems and challenges. They are inspiring.

I’ve used the term losing quite a lot in this article but I think that I should say that I actually don’t believe in losing. You see, losing is a mindset. You only lose if you haven’t learned.

For example, when my kids brought home the results from a maths test then I’d talk about the questions where they’d lost not where they had won. So if they achieved an 80% result then we would rejoice in the 80% and work on the 20%. This means the “loss” really isn’t a “loss” at all. It’s a learning opportunity. What’s the point in focusing on the 80% that you already know when you need to learn about the 20%?

If you approach losing as an opportunity to learn then losing suddenly becomes a “win”. This is REALLY important. In life, you can never lose if you truly believe that everything is an opportunity to learn. Granted, sometimes this is tough to do but it’s better than getting depressed.

In business, profit is your scoreboard. If you don’t have any profit then many people think you’re losing. It’s better to think of it as an opportunity to learn, be creative and get that scoreboard turned around.

Winning all the time is actually a big trap. What many people do in business is continuously repeat what they are doing, over and over again until when? Until they fail. What’s the point of innovating if you’re winning? So learning isn’t just for when you lose it’s also when you’re winning.

Andy Grove of Intel coined the phrase, “Only the paranoid survive.” He wasn’t trying to say that we all need to become mental basket cases….he was trying to emphasize that in an innovative industry you had to constantly reinvent yourself whether you’re losing or winning.

So let’s bring this all back to the domain industry. For many years, traffic monetisation was like picking gold up off the ground. It was everywhere! Everyone was winning and partying like there was no tomorrow.

Now look at where we are. Payouts are dramatically less and if you go onto any of the forums people are complaining that PPC revenue is doomed. The majority of domain traffic owners are basically doing the same thing today as they were five years ago…..I hate to say it but you’ve continued to do what was successful in the past until you’re now losing.

There are a few domainers that began to innovate and try different things. They dug shafts 3 miles deep into the earth to find the seam of gold to monetise their traffic better. I know a number of these individuals, they halted the downturn and even increased their earnings. While the majority of the industry was complaining these individuals were innovating. They then picked up a lot of portfolios for a song! Paying a multiple on the depressed prices and monetising at higher than 5 years ago rates.

Yes, the fact that you’re playing the game is important. You can’t win without playing but let’s never lose sight of the fact that you should be playing to win. My advice is to use “losing” as an opportunity to learn and try something different so that you can view every loss as a win! Who knows where this new mindset will lead you…..

I just had a great time with Jonathan Tenenbaum and Scott Pruitt from Domain Masters radio. In the show we covered a huge range of topics, starting with my own personal story and how I entered the domain industry. It took me down memory lane and caused me to reflect a little on the journey over the last 14 years.

We then moved on to how to extract the most value from domain traffic. Times have changed in doing this, you can no longer just pick the gold up from the ground. I relate how ParkLogic is like drilling a mineshaft three miles down to find the seam of gold for each domain.

We finally discussed domain development and how it's so important to start with a business model and move on from there. Many people start with building a website and then try to make money....it's the wrong direction to head.

I want to thank Jonathan and Scott for the opportunity to be a part of the show. They do a great job! Here are the links to the live cast and the archive.

Live Podcast

Archive Podcast

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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.