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.

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.

We recently had a new client that does a significant amount of domain traffic revenue come across to ParkLogic (I'm a co-founder) for a test. They were previously with a single parking solution and I thought it would be interesting to share with you the results as a case study in why domain traffic optimisation works.

After 6 days the overall results a 20% uplift in revenue…..which is quite a good given the short time frame. It's still early days for the optimisation process to kick in and effectively route the low traffic domains to the highest paying monetisation solution.

When you begin to unpack the data a little further an even better outcome is just on the horizon. For instance, for all those domains that have exhibited at least the same traffic levels as the previous month’s baseline the uplift in revenue has been 39%.

If we hand back to the client, the bottom 10 worst performing domains out of nearly 4,000 in the test then the results completely change. Overall, the performance is a 41.2% revenue uplift with a 75% increase in revenue for domains that had at least the same traffic as the baseline. This is a HUGE result where the revenue line has nearly doubled!

I wouldn't be surprised if the revenue line continues to increase over the next 6 weeks as the optimisation process hones in on the best performing solution. From that point onwards, optimisation will continue every second of every day.