Many domain portfolio owners get so focused on their parking statistics that they forget about other factors that impact the overall performance of their portfolio. In this article I would like to unpack the effect the Euro/US exchange rate has had on a portfolio and to illustrate that all is not as it seems.
I was recently looking into the performance of a particular portfolio that does a little over $20,000 per month in revenue. Given the size, I was confident that it was statistically significant for my analysis.
What I was investigating was the RPM (Revenue Per Thousand Visitors) trend so that I could try and understand what is going on with the overall performance. The reason why I was interested in the RPM is because the measurement effectively removes the impact of any fluctuations in traffic.
Since Sept 2014 the RPM for the account had dropped 6.5% from 13.85 to 13.00. Many portfolio owners have experienced some downturn across this period of time but I thought that further investigation was warranted. It just so happened that the portfolio had a large amount of European traffic and this got me thinking.
It wasn’t long before I had the below graph of the Euro/US exchange rate for the same period of time. The Euro had effectively depreciated by around 20% and this is what had contributed to the adverse results.