Traffic arbitrage business faces headwinds as the cost of traffic increases while revenue per visitor decreases.
Team Internet Group (AIM: TIG, OTCQX: TIGXF), a rollup of domain name and online advertising companies, announced results for the first half of 2024 today.
The company posted overall revenue growth of 3% year over year, grossing $409.7 million. The company’s adjusted EBITDA number increased by 4%, and profit after tax increased by the same amount.
Team Internet splits its business into two segments: Online Marketing and Online Presence.
Online Marketing includes domain parking, traffic arbitrage, and other online advertising businesses. Its revenue ticked up shy of 3%, and gross profit increased 5%.
The company said the Online Marketing Segment is experiencing pressure on both sides of the advertising market: it is paying more for traffic to its properties, while revenue per thousand visitors (RPM) is down. It reports RPM on a trailing twelve-month basis, and this figure has decreased from $100 to $88. That’s continuing a slide; the TTM RPM in Q1 was $91.
Online Presence includes domain name registrars such as Hexonet and Moniker, and domain registry services for companies such as XYZ. Its first-half revenue increased 6% year over year.
Online Marketing is about three times as large as Online Presence, so the overall growth is closer to the Online Marketing segment’s results.
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