Lookery.com

Image by niallkennedy via FlickrLike everyone else, I’d love Michael to include a prediction about TechCrunch’s 2009 revenue in this morning’s pessimistic, yet realistic, post. I’m not holding my breath for openness at that level.

There are three levers that publishers and ad networks can pull to increase revenue in a down at market: Pricing, Frequency, and Reach. We sold our ad network when we realized that Lookery is better suited to help others build and pull these three levers than to pull them ourselves.

Pricing. This lever would more precisely be called Effective Pricing. As Todd, Claire, and I run around acquiring data and selling user-targeting services, we talk to hundreds of ad networks, ad agencies, and vertical publishers. CPM ads are down for almost all of them, both on pricing and volume, but performance advertising volumes are healthy. For the performance advertising pros, business is actually up year-over-year. The question is how to join the performance marketing surge — and quickly.

Making good money (i.e. high effective CPMs) on performance advertising requires user targeting: behavioral, demographic, or search. The trick is to put performance ads in front of the people most likely to act on them. The largest behavioral targeting categories of mortgage-refinance and auto-purchase intention are not good sectors to invest time or money right now, so targeting on Age, Gender, Location, and Search History are where one can build expertise and improve revenue now.

Frequency. Publishers with valuable vertical audiences (TechCrunch, Pet Owners, Prime Borrowers, Skiers, Golfers, etc.) can make more money by putting ads in front of their audiences more often — outside of their own web sites. Two specific tactics work, both of which require only sales resources, not technology resources. Either audience owners build and sell their own behavioral targeting data, or they sell bigger campaigns to existing advertisers and retain the right to deliver the campaigns off-site. Same valuable audience + more audience touches = more $.

Reach. The third lever is finding more valuable users just like one’s core audience. It is straightforward for vertical category leaders know what other targeted sites their users frequent. Verifying which of those individuals behave most like that core audience and selling access to those individuals follows the same path as Frequency above. It’s a data or advertising sales job that results in mo’ Money soon.

No matter what the total market size, the online ad market in 2009 will be just as seasonal as every other year. Use Q1 to get better at building performance advertising revenue.