Lookery.com

In early ‘07 , I wrote a few posts on CPA, SMO, etc., while trying to figure out what I was doing after MyBlogLog. At MBL, we did a good job of spurring adoption, but Yahoo bought us before we ever had to look at monetization. To build a lasting company (like Lookery we hope), one needs to do both well.

AT MBL, we achieved adoption by solving a real problem for a good-sized group of people who adopt new web technologies quickly. Most importantly, our service addressed both emotional and economic needs. When asked why people were using the service, Eric and I became fond of answering, “For Love or Money.” Online publishers want to know their users better, whether for personal or economic satisfaction. At MBL, knowing users better meant as individual readers; and at Lookery we hope that demographic composition carries some of that same weight.

One reason that I didn’t mind selling MBL so early was that I had no concrete idea how we’d make money. I might now. The lessons I’ve learned at least mean that one post, Inventory for CPA Ad Networks, has completely the wrong premise. The post discusses social profiles as if they will become high-value pages (measured by eCPM) on which to put ads. They aren’t high-value now, and they won’t be in the foreseeable future. They’ll remain below $0.20 eCPM. Beyond just the profiles, the huge majority of pages on social network sites don’t and won’t do any better. The exceptions to that rule are passion-centric communities like Dogster, single-topic social applications like many Lookery publishers, and vertical content aggregations like Fotolog Groups. A few of these exceptions (notably, travel pages) can be worth $2 and higher eCPM but the vast majority are in the $0.20 to $0.50 range.

Premium CPM campaigns aside, high-value web pages are ones where the information they contain is valuable for automatically displaying ads right on that page, i.e. where automated processing of local content (in the software rather than geographic sense) leads directly to high eCPMs. Keyword search ads are the gold standard in this area.

Social profiles have economic value, but as remote targeting data, not as local targeting data. The information they contain is useful for ad targeting but on pages/sites other than the social profiles/networks themselves. In MBL’s case, they know what blogs people read in what combinations. In Lookery’s, we know basic, anonymous demographics (age, gender, and location only). It’s similar to what the behavioral ad networks like Tacoda have been doing for years, but we are depending on concrete user info, rather than mathematical derivation. Their mathematical targeting is impressive, but too expensive for us to attempt.

[Please note that this is the exact opposite of Facebook Beacon from a privacy perspective. I'm talking about taking small amounts of public profile data without identifying the user and using it invisibly on sites where the user is anonymous. Beacon imports behavior from third-party sites that people expect to be secret or anonymous and publishes it in Facebook News Feeds for all the world to see.]

So, social profiles are not inventory for CPA ad networks; they provide targeting data for all sorts of situations.