Please click on the below link to view the first two parts of A History of RPM:
Part 1 - A History of RPM
Part 2 - A History of RPM

The volume of domains being dropped was so high that Verisign found it was being buffeted by the Google margin grab. During this time, you could track the impact a one cent PPC drop would have on Verisign’s revenue line.

I remember conducting an analysis that concluded it would be financially viable for Verisign to underpin the entire domain investment industry so domains weren’t dropped. From memory it showed that every domain dropped cost Verisign $73 of market capitalisation. By underpinning the PPC payouts by diverting marketing dollars directly into the monetisation companies Verisign could halt the tsunami of drops from marginally profitable domains.

Several years after the GFC Google had reached rock bottom with the margin grab. I can only surmise that if they kept on increasing their margin then the partner network would essentially collapse. This would not be a good thing to happen right in the middle of rumblings about monopolistic behaviour at the legislative levels.

What we shouldn't miss in this whole saga is that Google's behaviour has been completely economically rational. They have the interests of shareholders to consider and not the domain industry. Those domain investors that moaned about what Google was doing needed to make changes to their businesses and do something different.

This is the second in the series on "The History of RPM" and refers to the forumula discussed in Part 1.

Please click on the below link to view Part 1 of a History of RPM:
Part 1 - A History of RPM

A number of years ago, one domain parking company (Domain Sponsor) controlled a HUGE volume of traffic and ruled the industry. Using their market power, they began to dictate terms to Google. Although I wasn’t privy to internal discussions, I could view Google’s response from an external perspective.

Since a contract was in place Mg was VERY HIGH and Google was bound to pay a bonus for what they previously thought would be impossible high traffic levels. This created a virtuous spiral for Domain Sponsor. As payments increased, they sucked in more traffic, climbed the tiers and they then increased payments further etc…..well, you get the idea.

What did Google do? They shattered the market by issuing a whole lot of new contracts (eg. Parking Crew, Internet Traffic, Voodoo etc) and wrote contracts that provided sunrise clauses to new players, so the traffic was sucked out of Domain Sponsor and the tail was no longer wagging the dog. They then rewrote the contracts with shorter terms and different values for Mg.

For those of you that are familiar with Domain Sponsor you will also know that it no longer exists. This could be blamed on a whole variety of reasons from bad management and VC driven outcomes through to Google but the fact remains that the once king of the domain industry was dethroned and ground into the dust.

About 8 years ago I wrote an article outlining many of the aspects of domain traffic monetisation that really frustrated me and what needed to be done to overcome them. Don’t get me wrong, I love monetising domain traffic but in its current form it’s both a blessing and a curse.

One of the really nice things about traditional parking is that it’s easy to implement. You set your nameservers, pray for a click and watch the money roll on it. This also makes domain parking incredibly scalable. You don’t have to worry about anything other than getting more domains and hoping Google doesn’t decide to exit the business.

As one of the founders of ParkLogic, we took this to the next level by putting a real-time auction system for each piece of traffic reaching a domain. The goal of this approach was to extract the maximum amount of value from the domain traffic and then compensate the domain owners accordingly. This worked and revenue increases of 80% not out of the realm of possibility.

Despite a great result I was still annoyed about the fact that traffic monetisation involved everyone hoping for clicks to generate revenue and then throwing the users away. It just seemed a silly business model that was leaving a lot of money on the table.

Have you ever wondered why advertisers keep on paying for domain traffic year after year? Despite all the naysayers out there saying that domain traffic monetisation is dead it seems to keep on getting better….yes, you just heard me right.

Domain monetisation isn’t just about views, clicks, RPM and the like. Domain monetisation is all about matching advertising to user intent and this is why it’s so valuable for advertisers. When a person goes to a domain name, they have an intent behind their query about what they are looking for and this is incredibly powerful. The user has already passed from wondering what to look for to seeking to find.

The great majority of people who are in a seeking to find mode are wanting to purchase when they find what they are looking for. The difference between looking up something on a search engine versus domain traffic is that a person looking up something on a search engine is seeking information while a person typing in a domain name is seeking to buy.

Many years ago, I read a report that Google produced outlining that domain traffic produced better results for advertisers compared to search traffic. It was at a time when Yahoo reigned supreme in the domain space but it wasn’t long before Google aggressively went after the domain industry as the traffic converted for advertisers.

This is the third in the series on running a traffic test. The first three articles in the series can be viewed at:
Part 1 – Baseline Data
Part 2 – Focusing on Performance
Part 3 – Improving the Revenue

In the previous three articles I’ve been taking readers through an actual traffic test that a real prospective client is doing with ParkLogic (I'm a co-founder). I have not doctored the numbers or done anything to make them look better. They’re the real deal.

The traffic test is now at the stage where we are looking at really putting the foot down to maximise the revenue. Overall, there has been a 36% uplift in revenue, which for most people this would be an outstanding result. Once you begin to dig into the numbers the results look even better.

The following chart compares the performance of the latest week’s data versus the baseline as a percentage for various traffic levels. For instance, for domains where we saw at least the same level of traffic as the baseline there was a 46% uplift in revenue, for domains with at least 80% of the traffic, an overall 43% uplift. This continues on until for all domains it’s just shy of 36%.

 All domains will have varying traffic levels over time and what this chart displays is the performance of the traffic test at the different traffic levels. Since domains with less traffic take longer to optimise then it also suggests that the low traffic domains still have potential upside that is yet unrealised.