This is the second part in a series on buying traffic domain names.

Once you’re comfortable that the legal side of the portfolio has been addressed then you really need to dive into the traffic numbers and do some research into where the traffic comes from.

So let’s get back to basics. You’re about to purchase a traffic portfolio. The first question that you should ask is, “Where does traffic come from?”

Traffic typically comes from the following sources:

1.    Direct type-in

Generic or short domain (eg. Beds.com, gx.com.au)

2.    Typos

Typo of a generic domain (eg. Fruit spelt fruit)

Typo of a weak trademark domain (eg. Joespizashop.com instead of Joespizzashop.com)

Typo of a brand (eg. Verison instead of Verizon)

3.    Link based traffic

4.    Purchased

5.    Hijacked traffic such as tool-bars and NXD traffic.

In the above list of places where traffic comes from I’m making no attempt to try and pontificate on whether they are appropriate traffic sources. I’m only indicating that they are sources of traffic. So please do not get upset at the mention of typo, trademark, purchased traffic etc.

Many years ago I purchased my second domain name and it failed miserably to provide any sort of return. Each and every year I faithfully registered the domain to remind myself to ALWAYS ask the question, “Where does the traffic come from?” In my case, the domain had a lot of Russian bot traffic that didn’t monetise at all. There’s nothing like a $10 annual learning course to remind you of an important lesson.

Many people have said to me that the only thing that matters is revenue.....sure, revenue may be important but it's definitely not a measure of success. So the question has to be asked....what is a good measure of success?

Let's imagine that you have a domain that is doing 100 uniques per day and $100. You move the domain to another parking provider and find that the revenue drops to $75. What is the normal reaction? Move it back! Quick! I'm losing $25 per day! That actually may be the wrong answer.

Let's imagine that on the day the domain received $75 it only received 50 unique visitors. That would mean that the new parking provider is performing brilliantly compared to the first one. The way most people compare the results is via the "tried and tested" formula of:   revenue  /   views   *   1000   or in other words RPM.

This sounds wonderful until you realise that the definition of views is different at every parking provider. There are no standards at all. So it we go back to our example, the second parking company may have actually received the same amount of traffic as the first but just reported less because they have more aggressive filtering on the traffic. This would then mean that parking company one would once again potentially be the winner.

Confused? It gets worse. There are over seven different revenue numbers that can be used each month for every domain name for your RPM equation. A couple of them are, "The estimated revenue number" or "The number confirmed two days later". To get an accurate picture of what is really happening you need to get both the revenue and the traffic numbers right or you get the wrong answer and sub-optimally optimse the domain traffic.....which is a fancy way of you saying you will be losing money.

I'll do another short blog on the solution to all of this shortly.