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Longstanding investor in Looksmart (and a 70 yr old ex-tradesman), who has a passionate interest in the problems of newspapers along with their success in all their monetisation attempts made, on the web. For the "times are indeed, a changin", I feel. [17th of Aug, 2011 - Print media... More
  • Facebook Will Buy Microsoft's Atlas - Here's Why 1 comment
    Dec 9, 2012 2:03 PM

    .
    From within my post script added to my previous instapost:

    < ......... Facebook (through it's own Exchange access partner and Microsoft's gatekeeper, AppNexus) would already have that access to Microsoft's inventory, no?

    ....In having Facebook do so (via AppNexus), Microsoft avoids that precious 'data leakage' of any sort. >

    This is answered in this paragraph (in a response to Microsoft's own Jay Seideman, Director of Sales/Exchange Targeting, Microsoft Advertising), in an article from AdExchanger:

    < Paul, ExchangeWire says: (December 5, 2012 at 1:57 am)

    Nice piece Jay.

    ........... One thing to question on is around the ad networks that are thriving. From what we see, the biggest Appnexus clients, which are networks, and which comprise the 8 out top 10 buyers from Microsoft exchange, are not necessarily differentiated by access (which you mention).> bit.ly/YyqCdy

    In a previous comment I had noted Microsoft's Jay Seideman as saying:

    < "This year, as exchanges further democratized access to display inventory for all buyers, proprietary data and multi-screen executions turned out to be the hottest differentiators.

    Players who have rich data at scale, from sources like search or an active user base, hold a massive advantage.

    ....Companies who can articulate and execute against multiple screens to find audiences across display, video, mobile and, in our case, Xbox, will thrive." >

    The Webmaster Radio interview (at SES SF - with LookSmart's Benoit Vatere) just about 'covers' that, above ...... bit.ly/pcRKQs

    And according to a 'Job Description' for the advertised Director of Sales Midwest - they advise that the company is now processing over 5 Billion search queries a day. http://bit.ly/HtFeSQ

    I guess my main POV is that not only do Looksmart already have access to the majority of exchange inventory (as we're told on July 17th - when introducing Display Capabilities. tiny.cc/gkh1ow), should Facebook buy the Atlas ad server, all targeted users or audiences - those based on RT search queries/search intent (with that real time data being provided by all Looksmart's search partners - that's 5 billion search queries/day), can then be directly found on any of Microsoft's inventory.

    This means that each individual Microsoft impression can (effectively) be accessed by Facebook's own advertisers through Atlas' compatibility with and via a totally INDEPENDENT role the Looksmart AdCenter marketplace will further evolve into.

    This then eliminates the middle-man (exchanges/AppNexus) providing a greater return for all the publishers involved! Through Atlas (connected into Looksmart's marketplace), Facebook's own 1 billion or, so users become available to even Google and Yahoo advertisers, targeting user intent. As do Facebook advertiser gain access to (through Invite Media), users found on Google's own publisher network.

    Viewable Impressions

    [From the Co's Form 10-K/A amended annual report, Mar 29, 2012

    LookSmart operates in a large online search advertising ecosystem serving ads that target user queries on partner sites.

    .......We operate in the middle of this ecosystem, acquiring search queries from a variety of sources & matching them via the keywords of our search advertising customers.

    Our largest category of customers has been Intermediaries,the majority of which purchase clicks to sell into the affiliate networks ...of the large search engine providers. ... Another category of customers are Direct Advertisers and their agencies - - whose objective is to obtain conversions or sales from the clicks, while others want unique page views. The last category of customers is Self-Service advertisers that sign-up online and pay by credit card.]

    It doesn't get much clearer, I believe. But all, only my own opinion.

    LC

    Disclosure: Long LOOK

    .

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  • LookingConfident
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    Author’s reply » .
    On page 21 of Looksmart's amended report (linked above), the company explains the following:

     

    < Traffic Acquisition Costs

     

    We enter into agreements of varying durations with our distribution network partners that display our listings ads on their sites in return for a percentage of the revenue-per-click that we receive when the ads are clicked on those partners’ sites.

     

    [Looksmart pay it's search partners this share - for RT keyword search intent.]

     

    We also enter into agreements of varying durations with third party affiliates. These affiliate agreements provide for variable payments based on a percentage of our revenue or based on a certain metric, such as number of searches or paid clicks.

     

    TAC expense is recorded in cost of revenue, and is based on a percentage of revenue. >

     

    Yes ...." in return for a percentage of the revenue-per-click that we receive when the ads are clicked on those partners’ sites."

     

    Traffic acquisition costs (TAC) for LookSmart's Ad Networks were recorded as being 60% in the third quarter of 2012. The company had sneakily declared (only) a $300,000 Q/Q increase in advertising networks revenues.

     

    Looksmart's stated Average Advertising Network RPC for Q3 of 2012 was $0.066. -This to me is clearly a matrix type calculation. Looksmart says, "a certain metric"? [CPC+eCPM] And a revenue number that's calculated, after [which] the average TAC of 60% has to be paid out to those search engines providing the search intent associated with all billable paid clicks or, eCPM impressions had.

     

    In fact, I had stated that:

     

    The total paid clicks for the third quarter of 2012 were 55 million x's $0.066 ='s $3,630,000 & from this total coming from the Advertising Network comprehensive income received, TAC is then paid.

     

    http://bit.ly/UUucXe

     

    And as was pointed on in my post (linked below) there's another $522,000 added to it's debtors (compared to Q2) or, in total, some $0.82M more revenue than the $3.6M had in Q2.

     

    http://bit.ly/SK2NJL

     

    Sooner or, later this market is going to realise that Looksmart are 'pulling the wool' over people's eyes, in just how revenues are now being declared. (Being, Comprehensive Income.)

     

    ..Advertisers are paying publishers direct (for billable impressions had in Looksmart's marketplace) and Looksmart then pays TAC to it's search partners (60% of $3.63 in Q3), from the revenue-per-click that it receives.

     

    I feel it represents a total 20% of the total advertiser's spend.

     

    This would mean that ($3.63 + $0.522 =s $4.152 X's 5 ='s), some $20.76 million was spent by advertisers in the Q3 period. That's a considerable rise when compared to the ($3.6M X's 5 ='s) $18M that advertisers spent in Q2 !! An increase of $2.76M Q/Q, thank you.

     

    LC
    .
    9 Dec 2012, 09:05 PM Reply Like
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