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Looksmart accelerates the productization of its performance based advertising offerings

Looksmart (who finished the Q4 period with an increase to it's cash level - that's now up, to $26.9M), closed yesterday with a market cap of just $31M - That's incredible!

What's even more incredible, is the progress the Co is making to get to assist Tier 1.5 enabled Ad Networks to be able to provide their own advertisers with that ... one-stop-shop to reach significant additional audiences beyond the large search engines.

From within the CC (following the Q4 - 2010 Report posted yesterday), Looksmart have told all (who may have tuned in), that:

"In order to mitigate the impact of the ['Micro-hoo'] search alliance on revenue, we are accelerating the productization of our performance based advertising offerings that we began testing in the last few weeks of the fourth quarter."

[Digital Advertising Ecosystem 2010 - CPV (cost per visitor) gives insight to Web site owners. CPV is where advertisers pay publishers based on how many viewers of display ads, that.....they then re-visit.. Performance-based metrics aim to expose true interactions. - See slide 76/90]

Jean-Yves Dexmier, CEO: "We are now proposing the cost per visit or CPV model to our impression customers, who are [re- ?] targeting new visitors to their sites. 

We are able to select the right traffic in real time
& deliver it at a guaranteed cost per visit recorded on their site rather than a traditional CPC basis.

With that
[CPV] model, our customers do not bear any more of the financial risk of click conversion, which makes the model very attractive to them. We have already signed several customers for that model and plan on moving it very aggressively into the marketplace."

"We still need to test the algorithms related to the offerings beyond CPV and develop the market introduction plan for those models. We expect to complete the launch in the second quarter of 2011 for all those models. By the end of the year, we are targeting 20% to 25% of our revenues to come from our performance-based advertising offerings. - We are exclusively targeting direct [both] - advertisers and their agencies operating outside of the large search engines."

From the Q&A, on this topic:

Q - :   It sounds like you are going to do a cost per visit model, and then did you also say you are going to approach it with a cost per action as well?

A - Jean-Yves Dexmier, CEO: Correct.

Q - : Did I understand that correctly?

A - Jean-Yves Dexmier, CEO: Yes.

Q - : Okay. Can you just talk a little bit more about that and why it was, how that's being received, and how you look at that going forward?

A - Jean-Yves Dexmier, CEO:   Sure. So the reaction from advertisers is very consistent regarding a pricing model that is based on their direct expectation, which they can measure themselves. An action is very clearly defined, a visit is very clearly defined.

So, selling by the action or by the visit, instead of [our] selling by the clicks remove the risk, the financial risk of conversion from the equation for the advertisers, therefore this model is very favorably received by the advertisers.

On the other side what it does it shifts the risk of conversion from the advertisers to LookSmart. We believe we are now able to take that risk because over 2010, we have developed a series of guidance & modules that we have added on the top of our network of our platform that allow us to actually measure in real time - the performance of a click.

Therefore, we are able to determine which click converts in real time - a visit as measured by a client or in an action - as measured by the client.

Therefore, we are able ourselves by using our selection algorithms on the platform to target the pieces of traffic that we're bringing in the network that actually satisfy the metrics for the customer. - So overall, the model is very favorably received by customers.

It creates of course a risk for LookSmart because we are bearing the financial risk of conversion & that is the reason why we are going very progressively in the testing with select customers - because we want to make sure that our algorithms are robust in terms of predicting our own revenue and margin. As we have to prove that they are robust, we put that in production & we'll [then] become very aggressive in the marketplace.

Q -: Thank you.


And to help with expanding the [AdCenter Marketplace] distribution network:

"We took small steps last year, and the primary effort was centered on the traffic quality improvement. The most significant was the launch of our self service publisher initiative in November and we have signed up approximately 30 publishers since launching that offering."

Nice going Looksmart.


ps; Then, there's OpenX - OpenX Serves the Big Pubs

< The platform promises real-time optimization across all of publisher ad revenue channels — both direct sales and demand sources such as DSPs are managed at a single location.

OpenX CEO Tim Cadogan believes this will enhance both transparency and control for large publishers.

In addition, the new platform includes audience segmentation tools with simple third-party integration so that publisher audience data resides in the ad server. Over at AdExchanger, OpenX CTO John Linden goes into detail about the technology and other features.>

Disclosure: Long LOOK and happy to be so, too....