Which is the most important domaining metric?

Most people would answer this question with a smirk on their face and that the obvious answer is “revenue”. Although revenue is vitally important to any business, I would like to say that when it comes to domain traffic monetisation it is not THE most important.

The problem with revenue is that it’s a very one-dimensional number that doesn’t tell you how your domain traffic is actually performing. If you only pay attention to the revenue, then it is very likely to be buffeted by traffic volume and this will distort your perception of performance.

Some people may leap to Earnings-Per-Click (EPC) and Click-Through-Rate (CTR) as being the most important metrics…..but they would also be wrong.

EPC is a representation of advertiser demand and CTR represents user engagement. The problem with both these numbers is they are dependent upon how a click is counted….and this varies between every different monetisation provider in the world!

You then have Revenue-Per-Thousand visitors (RPM). The definition of this metric is revenue / visitors x 1000. Although this is a better number that incorporates both revenue and views the question that immediately comes to mind is, “Who’s version of a view?”

Due to lack of standards in the domain industry there isn’t a single “view” definition that has been adopted by everyone. This means that I can claim to payout the highest RPMs simply by discounting back the number of views I count…..which makes RPM a bit of a meaningless metric when you’re trying to compare one company versus another.

In fact, I would go as far as to say that RPM is one of the most misunderstood metrics that is used by the domain industry. In many cases, due to weird and wonderful filters views are counted completely differently from one domain to the next.

So far, we’ve eliminated revenue, EPC, CTR and RPM as metrics for measuring performance. If you log into your domain parking account it’s very likely that you won’t see any other numbers…..but wait, don’t give-up! There is a solution which is actually a derivation of RPM…..we call this a normalised RPM or at ParkLogic the plRPM.

A normalised RPM has the following formula:
nRPM = revenue / (raw traffic) x 1,000

The difference between an nRPM and a traditional RPM is that the traffic is unfiltered. How is this difference important? With a nRPM we can now directly compare the performance of one domain versus another as well as the performance of one monetisation source versus another.

By counting the individual traffic that is sent to each monetisation provider and incorporating the revenue that is earned by that traffic we can get an nRPM for every provider for every domain. We then know beyond a shadow of doubt that monetisation partner B is performing better than monetisation partner A. It’s no longer guess work or “gut reaction”….it’s based on fact.

I should say the nRPM is only the tip of the iceberg in measuring performance. After more than a decade optimising traffic we’ve developed some very sophisticated algorithms for routing traffic at ParkLogic. Needless to say, I hope the article has helped you in your own understanding in what it means to optimise your domain portfolio.