Listening to Credible Speakers

I recently conducted an in-depth analysis of a statistically sound sample of a several hundred thousand domains. There was nothing special or selective about the sample and yet the results showed that contrary to many peoples believe, domain monetisation is alive and well.

Escrow.com

I attend a lot of conferences around the world and I must admit that I get a little flummoxed when I hear over and over again claims that domain monetisation is dead. The reason for this is that my company, ParkLogic, sees the actual data from right across the industry and from our perspective nothing could be further from the truth.

When I say we see data for the industry I really mean that. Any domain traffic on the ParkLogic platform is evaluated every hundred milliseconds to see which company will pay the most for it. There’s no guessing or “gut instinct” involved, it’s all about the numbers.

I have two questions to ask the monetisation naysayers:

  1. Do you have a statistically sound sample of domains that allows you to speak with any authority?
  2. What have you done differently with your domains in the last 6 months?

The first questions strikes at the heart of credibility. If you don’t personally have the data or access to the data, then on what basis are you making claims that can potentially be damaging to the industry.

A few year ago, I was publicly ridiculed in a domain forum by an individual and told in no uncertain terms that I know nothing about domain monetisation. I took the condemnation on the chin and in a private message I asked my accuser how much revenue per month they were doing. The answer was $5.

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Wolftalker
Wise words M.
26 April 2019
whizzbang
Can't wait for you to present and share some data again. It would be especially interesting to see what type of domain inventory... Read More
27 April 2019
Guest — John Colascione
Sounds to me you're dancing around in fairy tail land. All publishers I know, including myself, who are good at what they do and m... Read More
30 April 2019
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Running a Proper Domain Test

Are you getting the most from your traffic?

I’ve been in the business of managing domain traffic for nearly two decades, the last of which has been as one of the co-founders of ParkLogic. In this article I will share with you how a proper analytic traffic test should be constructed and the pitfalls that so many people fall into….which ultimately robs them of increased revenues.

Escrow.com

Let’s imagine you have a reasonable amount of traffic revenue at your current monetisation partner. By reasonable I mean at least $250 per day. For those of you that think this is impossibly high then you can stop reading hear and continue to believe that domain traffic monetisation is dead. Everyone else can keep on reading.

Let me say from the outset that if you have left your domains with the same parking company for more than a few months then I can almost guarantee that you’re leaving money on the table. For a start, we see that around 60% of all domains achieve greater results from non-Google sources.

In constructing a test, you need to have around $100/day of revenue (based on the previous month’s stats) from a couple hundred domains. Some domains should be doing a few dollars per day, while others should still have traffic but do no revenue. This will provide a good statistical sample that will help verify whether the new monetisation partner is actually performing or not.

Any new partner worth working with should then ask for these numbers. If you think you’re being clever and not providing them by asking them to perform their “best” then all you’re actually doing is delaying the optimisation cycle. The new company will have no idea where to concentrate their resources unless they have the numbers.

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Gambling on Domains

Are you gambling on domains?

I must admit that I’ve never really understood the business model underpinning domain sales. I know that in this article I may rain on your parade and for that I’m sorry….but please help me out in getting over some of my possibly faulty logic

Escrow.com

The state of the market for domain names is that it has fallen from a peak growth of 11.7% in 2015 to 1.2% in 2017. The 2015 peak was spurred on by two factors:
•    The Chinese domain boom
•    Greater release of new gTLDs

When you begin to drill down into the data it becomes even more interesting. For instance, .COM grew by 6.4% in 2015 and is growing by 2.8% in 2017. The legacy TLDs (eg. org, net etc) grew by 1.5% in 2015 and slipped backwards by -1.9%. The surprise was the ccTLDs (country codes). In 2015 they were growing by 14% while in 2017 they are beating .COM out with a growth rate of 3.9%. I must admit that I love ccTLDs and have made a lot of money from them over the years.

The sorry tale is the new TLDs. After exploding out of the blocks in 2015 with a growth of 196% they are now contracting by 14.6%. Many have stated that this is not surprising as speculators leave the market but when you consider that over 50% of the domains are parked then you’ve got to ask what’s actually happening. The simple answer is some of the extensions (eg. XYZ) are experiencing massive drops which is influencing the numbers overall…..so no panic here for the truly good extensions.

Ignoring the decline in the new TLDs the overall growth in the market is around 4.8% or approximately 9 million more domains from 2016 to 2017. This is an important number as it represents the demand side of the market and should dynamically influence the sale price of domains.

The other curve is a little frightening…..the supply curve. Since the new TLDs were released, the market has been swamped with a massive level of supply. This is not the early days of the Internet where there was .COM, the CC’s and a few others. We are now in an environment where the supply is so large that it MUST impact the sales price.

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Guest — Steven
How did you quantify that Godaddy has an aftermarket sales market share of about 34% when so many aftermarket sales are private?... Read More
10 October 2018
mgilmour
I based this roughly on overall market share. Yes, many domains are sold privately but I think not as many as people would have yo... Read More
11 October 2018
Guest — Steven
I think this estimation is the most flawed part of your post's logic (which is otherwise mostly good), and your later numbers flow... Read More
11 October 2018
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Is Domain Parking Dead?

Monetisation is NOT dead!

In this blog I’m going to be a little like Rick Schwartz and have a rant. Many domain investors make the mistake of assuming that domain parking is dead and the only real business model is available to them is domains sales. Is domain parking dead? No, it’s not dead but for a growing number of investors it’s morphed into something a lot more sophisticated.

Escrow.com

One of the strengths and weaknesses of traditional domain parking is that behind all the smoke and mirrors lies Google. Google buys a lot of the domain traffic because they have a huge breadth of advertisers. If you have a website that is about "Norwegian Knitting" then it’s likely Google can put relevant advertisements on the page.

The weakness of traditional domain parking is that Google has manoeuvred itself into an unassailable position and has then exploited this position by continually reducing pay-outs. Domain investors shouldn’t be surprised by this behaviour as it’s economically rational in a world that is driven by quarterly earnings calls….so stop complaining and just get over it.

Notice what I said earlier…..Google buys a lot of the traffic. Just because Google is wanting to buy your traffic doesn’t mean you have to sell everything to them. It would be far more sensible to only sell to Google what Google is paying fairly for and then sell to other people what they want to pay more for.

What I've found is the majority of domainers are like a person selling a bucket full of oranges. The buyer (ie. Google) asks if you can throw in your car with the deal and with a grateful smile you say “yes”. In fact, it’s a bit worse than that. Domain investors are selling oranges and Google takes the car without asking because they believe they deserve it. Remember they still only paid orange prices for your car.

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Wolftalker
And 'wow, that's amazing', you've nudged me. So I'll be bringing in a bunch of new domains and I hope we can do something. Che... Read More
06 August 2018
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Getting Into the Numbers...

I had a discussion with a domain investor today that went like this….."Michael, ParkLogic isn’t performing for my portfolio so I’m going to stop the test.” I replied, “Let’s take a look at the numbers and understand what they are saying.”

Escrow.com

We have a standard report that compares a baseline for domain names versus the most recent data. It only took a few minutes to identify the problem….it just so happened that out of over one hundred domains there were five that were pulling down the results for the portfolio.

Without the five domains there was an overall 63% performance increase. Our recommendation was to move the five domains that were pulling down the results and re-baseline them to see if it just so happens an advertising has gone missing during the USA summer period. If the domains popped back up then it was a great win for the client.

Getting into the numbers is key to assessing the performance of a domain portfolio and yet, so many domain investors don’t understand how to do this. The question that I constantly ask is “Why?”. Why are the domain not performing? Why are the domains performing? Why is company X winning the traffic? Why is the traffic going down? Why is the traffic going up? Why are/are not direct advertisers bidding on a domains traffic?

It’s asking the “Why” which leads to a fuller understanding of the overall portfolio performance. For example, without those five badly performing domains there was an overall revenue increase of 75% for domains that had at least 80% of the traffic compared to the baseline. Anyone would have to agree this was a great result!

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