As we discussed in Part 2, what’s vital in running a traffic test is understanding the performance, both positive and negative. The data is the data but interpreting what it’s telling you is far more important if you are wanting to develop long-term value from your domain traffic.
So how is the real live test portfolio progressing so far? The following two charts show the overall trend lines are all heading in the right direction. Despite the time of year and the typical overall decline in advertising spend over the northern hemisphere summer, revenue is continuing to trend upwards.
The second chart clearly shows the reason for this is due to the normalised RPM (or plRPM as we call it at ParkLogic) is also trending upwards as the optimisation algorithms continue their work. For those of you that are unaware, RPM stands for Revenue Per Thousand - more of per thousand what shortly. It’s at this point that I’m going to take a little detour to explain a few things about plRPM and how it differs from RPM.
At first glance the two formulae below look very similar to each other, the only difference is the denominator. For RPM it’s views while for plRPM it’s URLs and there is a VERY IMPORTANT distinction between the two of these numbers that help us understand a lot about optimisation.
Views is what a monetisation provider reports after they have applied any of their own traffic filters. Because RPM depends upon these filters every monetisation company will generate a different denominator and as can be seen by the formula this completely changes the value of RPM.
Let’s imagine I wanted to become known as the company that pays the most per thousand visitors. All I need to do is filter the traffic more aggressively and voila, I’ve achieved my goal. I’m not suggesting any monetisation company does this BTW.
What this also means is that since everyone applies different filters to the traffic you cannot compare one monetisation company’s RPM versus any others. Too many domain investors have fallen into this trap and this has resulted in poorly optimised portfolios that produce substandard results.
The denominator of the plRPM variable is URLs and this is VERY DIFFERENT from views. URLs is what we see and can confirm coming through our servers. It does not depend upon different applied filters.
As a part of our optimisation process (and it’s only a part) for every domain, we count how much traffic we send to every monetisation provider and then the revenue that provider generates from the traffic. Since we know the traffic and the revenue, we can then calculate the plRPM for every domain for every monetisation source for any point in time.
In fact, we know exactly who is performing the best at any point in time for every single domain. More than that, we have the mathematics to prove our claims.
We then take this data and alter the routing rules for the traffic on the fly to extract the maximum amount of value from it for our partners. Remember that we refer to clients as partners....because that's really what they are to us. This means that every individual piece of traffic is effectively optimised to reach the most effective destination for every single domain and all points in time.
Compare this approach to changing your nameserver from one company to another. For a start, you don’t have a normalised RPM and secondly, since they are different points in time which means the test is effectively null and void. Every traffic test must be conducted SIMULTANEOUSLY the possible monetisation solutions to get the most effective optimisation.
I'm a co-founder of ParkLogic and we have been monetising domain traffic for over 12 years. I don't mean to brag but during this time we’ve become the experts at understanding domain traffic and I think you would be hard pressed to find anyone better at monetising domain traffic than us. I should state that we do not accept everyone onto our platform. We typically only work with domain owners that have a reasonable amount of revenue per month…..the reason for this is that we get very “dirty” in the numbers and our partners value our very hands-on approach.
I think for the first time in my long blogging history I’ve used capital letters a number of times in this article. The reason for this is that after over a decade of blogging the great majority of domain investors still don’t get it and end up leaving huge amounts of money on the table. I hope this article helps provide you with some insight into what it takes to turn your revenue trend upwards rather than downwards.
In the next article I will prove with real live numbers how traffic routes to the highest paying solution over time. More than that, I’ll also prove that ALL monetisation solutions are valuable and contribute to the overall performance of a domain portfolio.