This week showed a VERY unexpected change in the stats and one that I personally was very surprised to witness. It signals a potential massive change in the domain monetization industry so hang onto your seats as I dive into the data.

I also couldn’t help noticing that Facebook is going through a whole heap of pain as major advertiser after major advertiser has stopped advertising on that platform. The question I ask myself is where will the advertisers go to attract the Gen Z and millennial eyeballs?

Google? Unlikely. Twitter….they have their own kind of pain. Whatever happens, I’m sure the data will begin to reveal the activities of major corporate advertisers.

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This past week saw Google announce a slowdown in the growth of their online advertising business. At ParkLogic, we have seen increased volatility and what looks like the beginnings of a contraction after a period of rapid growth in normalized RPM. What does all this mean for domain investors?

In this video I discuss the broader online advertising industry and a key statement that the CFO of Google released that suggests a more turbulent future. There appears to be a tussle between big business that has largely exited the online space and the rapid rise in small to medium enterprizes entering the market in search of new customers.

In addition to the regular slides I’ve being discussing each week I’ve added several more that show some of the trends on a weekday basis. These are absolutely fascinating to unpack and reveal some great weekly trends for investors to take advantage.

I am for the data I provide in the videos to provide a clear picture of what is happening in the online advertising space with the goal that it will help you to making better decisions for your business. Don’t forget to subscribe, like or sign-up for the push alerts so you don’t miss out on future blogs/videos.

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.

In this series of articles, I plan on sharing my insights into RPM and how this metric has impacted all our lives in the domain industry over the last decade. I hope you enjoy the articles as much as I have writing them.

For those of you that are unaware, RPM means Revenue Per Thousand Visitors. I find that very few people understand how this universally accepted measurement term is calculated and how it can vary from one provider to another. During the following articles I will be referring to how RPM has shaped the history of the domain industry….

Most people would be aware of the formula for a domain’s RPM looks like the one below:

This looks simple enough until you begin to dig into it. The reality is that a sustainable market RPM formula it looks something more akin to the following:

For many years people have been making proclamations that the domain monetisation industry is dead and yet….it’s still with us. There is a really simple reason why a number of individuals have been so successful in the domain monetisation industry. Domain traffic is valuable because it converts like no other source of traffic available to advertisers.

Yes, it’s that simple. Quality direct navigation is like 24 caret gold for advertisers that care to investigate what traffic sources are actually generating their profits.

When you think about it, it’s pretty obvious. If a person goes to beds.com guess what? They want to buy a bed! This gold standard of traffic is what also contributes to driving up the price of high end premium domains.

Many years ago, I read a report released by Google that outlined how domain traffic converted better than search traffic. Not surprisingly, the report quickly vanished…. Everything comes back to advertisers…..and guess what, they want this traffic and they want it bad!

Given domain traffic is so valuable, why is it that many domain investors have been experiencing a decline in their traffic revenues? Once again the answer is simple…..if you depend 100% upon Google to provide you with your revenue then don’t be surprised if they reduce payouts.

I’ve seen domain investors get all upset about their revenue declining but do nothing about it. Go figure? The domain traffic IS valuable but someone else is just taking your lion’s share. What’s the point in getting angry with Google and then doing nothing?

The Google domain management team is doing EXACTLY what they should be doing….maximising Google’s profits. They are not interested in maximising your profits. In fact, if any of them weren’t putting Google first then they would be fired…..

So the question I would like to leave you with is also simple, “Given domain traffic is so valuable shouldn’t you take charge of your own profit line?”