LookSmart Looking To Sustain Profit, Grow Revenues Says VP Gill Brown

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LooksmartGill Brown is vp of ad sales for LookSmart, an online advertising network. The company recently reported second quarter 2010 financial results. Click here (PDF).

AdExchanger.com: What is LookSmart’s core focus today?

GB: The core focus for LookSmart is growing our PPC advertising network to the benefit of both our advertiser clients and our publisher partners. On the publisher side, we’re focused on optimizing current traffic and actively seeking to acquire new traffic sources, which will help bring quality and volume to our advertisers. On the advertiser side of things, we continually strive to deliver the best quality traffic to our advertisers to meet their search metrics and goals, whether that be unique visitors, conversions, pageviews, or other metrics that matter to them. And, of course, we maintain a commitment to provide best in class customer service – we allocate dedicated account teams to ensure clients meet their goals.

What is LookSmart doing about a data strategy that will enable advertisers and inventory suppliers?

We have a dedicated science team focused solely on data strategy, led by Chief Scientist Dr. Vincent Granville. Dr. Granville has more than ten years of experience in predictive modeling, data mining, machine learning applied to Internet search technology, keyword and business intelligence, online advertising, web analytics, fraud detection, and market research.

We focus on the measurement of traffic quality, which to us, means being able to grade traffic and grade clicks and offer clicks at a price that relates to their quality. We take a very granular approach to traffic quality measurement, and aim to better match supply and demand through right pricing. As an example of this, we create a customized distribution channel for our advertisers – so they receive the traffic that performs well for them – driven by behind the scenes data analysis. We also use intelligence about our network driven by analytics.

Can you see an opportunity for real-time bidding on paid search inventory? In other words, letting advertisers bid according to who the user is (via a cookie) in addition to a keyword request in real-time?

This raises the issue of privacy, which is a big topic in Congress right now, and also a concern to us. We don’t collect a lot of demographic data, the reason for this being that search advertising is keyword based, and the user is already signaling intent. That being said, there are certain data sets, such as location, that are very useful in regards to understanding what the user is searching for. Knowing some demographic data does increase the relevance, and it makes sense to use it because a more relevant match is a win-win for everyone. However, the match needs to be done taking privacy and privacy laws into account.

Who are LookSmart’s key advertiser clients (verticals, horizontals or specific companies)? And on the inventory side?

Our advertiser clients and traffic sources span many verticals. We have ones that perform especially well for us – including finance, insurance, travel, and health – but our coverage is across the board.

One of the things we do really well is helping retailers and other conversion-based advertisers showcase their products to a unique audience and drive additional sales and sales leads. We also have had great success helping publishers drive new, interested visitors to their relevant content.

In terms of our inventory, we aggregate a number of diverse traffic sources, including meta-search engines, toolbar, direct navigation/domains, and in-text advertising.

Is creative evolving in paid search today? Or can it?

With the advent of more sophisticated testing options available, there is definitely some room for creativity there. At LookSmart, we offer a feature called SmartRotation, which allows advertisers the ability to test different creative within an ad group, and serve the ad creative with the best CPA in a campaign.

In addition, we’ve also seen advertisers take a creative approach to their PPC campaigns by using social media to boost awareness and drive more search queries about their brand or product.

Finally, as the needs of advertisers (such as pharmaceutical companies) shift, we need to adopt new creative opportunities such as multilinking within the text ad to meet evolving needs.

Does it make sense for LookSmart to get into graphical display, online video, and mobile in the future?

At LookSmart, we’re constantly evolving, and always like to keep our options open. Expanding into other advertising formats offers more opportunities for clicks on ads, so this is something we’re interested in exploring in the future.

Specifically, we are looking at graphical display opportunities, which would require the adaptation of our ad formats to meet the requirements of our advertisers and publishers. We’re also interested in how LookSmart can potentially add value for our advertisers in the evolving mobile advertising space.

Is malvertising or malware an issue for LookSmart? What is LookSmart doing to ensure quality?

LookSmart stands apart from other paid search networks with our industry-leading commitment to traffic quality, which permeates every facet of our business. We are relentless about quality.  Click fraud and malware are unfortunately pervasive, unavoidable issues in the search advertising industry. We’re a traffic aggregator and because there are people and companies out there who abuse the system, we have to look out for our partners’ best interest.

LookSmart tirelessly monitors its network for traffic quality through proprietary processes, built-in AdCenter controls, and click scoring technologies. Our goal is to protect our advertisers and their campaign performance .

With $20 million in cash at the end of Q1 2010, are strategic acquisitions a possibility for LookSmart?

Yes, but the question is - what would make the most sense? We have cash and stock, and if/when the stock price increases, this will give us even more currency to leverage for acquisitions.  We are focusing on what disruptive advantage the acquisition would bring to LookSmart.

A year from now, what milestones would you like to have seen the company accomplish?

Sustained profitability is a goal that is top-of-mind. Next is revenue growth, which can be best achieved by bringing on more quality distribution partners, and advertisers to bid on their traffic. We’ll achieve those goals through specific additions to our teams, including building out our publisher acquisition team, our analytics team, and our sales team, among others.

Follow LookSmartSearch (@LookSmartSearch) and AdExchanger.com (@adexchanger) on Twitter.

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