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Transparency - The Key To Increasing Domain Value

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Jul 29, 2011
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I’ve been beating the drum about the domain industry becoming more transparent for more years than I care to admit. A fundamental feature of any mature market is to provide those wishing to invest into the market with a level of transparency where they can judge an investment on its merits.

I remember a number of years ago I spoke at the TRAFFIC conference in Las Vegas on transparency. I began my talk by tossing a coin into the air and I said to the audience, “You may think that I’m tossing a coin into the air but actually I’m trying to work out what I’ll get paid next month.” There was a bit of nervous laughter. Nervous because it may well as been true.

I’m going to say it again. The entire traffic monetisation value chain has a lack of transparency and this is hindering the large influx of capital that we all desire. Why do we get paid what we get paid for traffic? Why isn’t it more? Why isn’t it less? These are questions that have been begging answers for over a decade now.

From the advertiser spending money, right through to the domain owner for providing the traffic, there are organisations taking a cut from the pie. The major problem is that they just don’t declare it. There are so many ways to defraud the system that no one actually believes the numbers anymore and I believe that most domainers now assume that their monetisation partners are not paying what the traffic is really worth. I love the domain industry and it really makes me sad when I see this attitude of mistrust gaining a foothold time and time again.

Eight years ago I decided to found ParkLogic with the goal of being as transparent as we possibly could. We decided to declare ALL earnings in the interface and also our own commission in the accounting. This means that a domain owner actually knows how much we earn for working on their traffic. If the amount we take doesn’t work for them then they can leave or discuss the matter. It’s open, it’s honest and it hides nothing.

Business isn’t about tricking a customer into using your services. Business is about providing value so that the customer wants to keep on using your services. The philosophy at ParkLogic seems to have struck a chord with many domainers because we are still here and keep on growing each day.

So why did we decide to do this? It’s really quite simple. Let’s imagine an analyst in a private equity firm identifies that the domain industry is the place to invest a serious amount of money. They stand before their board and say, “We need to do this!” The board gets really excited and then asks, “So why do domains earn the amount that they do?” The analyst hangs his head and leaves embarrassed because in the current domaining environment they can’t answer that question.

A number of years ago I chaired the online advertising task force in Australia for setting advertising standards. Back then, advertisers had no idea how traffic was measured, clicks were counted or even the difference between RPM and CPM for that matter. During the various meetings there were massively competing agendas amongst the advertising agencies but somehow we managed to come to a consensus that by setting standards it would attract more advertisers. Shortly after the standards were adopted the online advertising industry boomed and now has more than fifty times the amount of dollars flowing through it.
It’s time that Google, Yahoo, parking companies and any ancillary players actually declare what they earn from the traffic that they are monetising. Not as a percentage but as an actual dollar value. When this is done we will have the beginnings of a transparent


industry that has the potential to grow in leaps and bounds.

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