CEO Sheinbaum Says LinkSmart Automating Publisher Link Strategy, Driving Yield

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linksmartPete Sheinbaum is no stranger to the power of "the link." When he led the popular newsletter Daily Candy (acquired by Comcast in 2008) and was looking to scale users and revenue beyond the email inbox, the rich media possibilities of Daily Candy’s website beckoned with demanding advertisers in pursuit.

He says that his latest startup, LinkSmart, is – in some ways - the solution he needed to drive web traffic at Daily Candy and keep hold of advertising budget that was thinking of moving elsewhere.

In a discussion recently with AdExchanger, Sheinbaum elaborated...

PETE SHEINBAUM: At Daily Candy, we found that if an editor wrote an article about food and they mentioned Mario Batali, for example, and we had an archived article about him opening up a restaurant, they would put a link on the words "Mario Batali" and people would consistently click through - and we'd get that extra page view on the web.

Because our audience was so big and engaged in the email box, we could drive some significant traffic. Then on the website itself, programming to get traffic to flow between the different editions, going from New York to San Francisco to LA, and exploring more content was important because we wanted to get more inventory as measured by pages per visit and time [spent] on site and so forth.

The challenge with all this was that it was very manual. To do this, editors would have to do the homework, go into the CMS system, hand‑code or re-code a particular keyword or keyword phrase. And then, once that business rule or that opportunity has expired or changed, they would have to go back and unwind those relationships to point people in new directions.

For example, if we had built a special advertising section for Neutrogena, I would want to find all of the inventory, keywords, phrases and content related to skincare, sunscreen or whatever was the content in that section. Users couldn't get to it organically because it wasn't part of the native navigation.

We would try to get people to go there by using all the tools at our disposal. The most effective was in‑text linking, but it was also the most manual because we didn't have an ad server or some a widget tool that would do it for us.

And so, fast forward to LinkSmart which was created to solve these problems for publishers: provide them analytics and insights into what's going on in text; and to give them management tools to dynamically recirculate traffic and optimize traffic based on user flows in and between content, and in and between websites that they own or operate; thirdly, to help them compliment articles that don't have a lot of text links in them.

The point is to increase engagement, get people to go deeper into the site, increase pages per visit, and give them the opportunity to move users into high value areas from low value areas while supporting their existing business models rather than having to add new ones, which is what the other players have offered.

How long has the company been in existence?

We've been up and running for probably close to two years, testing on a variety of large and small publishers. We were not public with what we were doing because we think it's a very interesting and powerful new angle at an old, boring thing - the simple text link.

We were happy to announce our coming out party a couple weeks ago with the launch of the product Total Link Management and with the announcement of the fundraising that we've done to date.

We're based in Boulder, Colorado with our technology team, but we have people in New York as well as we're building a team on the West Coast. We’ve got 15 people and open positions.

And, we're not publicly talking about our current customers because they've asked us to remain anonymous for a little while longer because they feel this is the competitive advantage for them.

What’s LinkSmart’s revenue model?

The model is a subscription model - we're not charging people on a CPC basis or a CPM basis. We charge publishers a flat, monthly fee based on the size of each domain that they want to run the code on. They can get efficiencies if they're running multiple instances of LinkSmart across a variety of titles, too.

If you think about it, every link on every content web page on the Internet is potentially a LinkSmart partner. And being able to aggregate and coordinate the actions of all those links is powerful. You could drive a tremendous amount of traffic in an organic and endemic way for publishers.

They're spending hundreds of millions of dollars, if not billions of dollars, on SEO and SEM every month and every year, and once people come to their websites after buying traffic or optimizing for traffic, they're spending one or maybe two pages per visit. They could have the LinkSmart system leverage and enhance those visits by presenting the visitors with smarter links to drive them deeper into the site, and into places where the publishers could generate some revenue in exchange for giving the content away for free.

We believe that this subtle, simple thing – the link – is something everybody's forgotten can drive huge volumes of traffic in and between owned and operated properties or even between different properties across the Internet. All of this can be done in real time as a service in the Cloud.

You’re focusing on large publishers, correct? This isn't for the long tail?

We wanted to build an enterprise‑class system, so those are the publishers that we've been talking to first, but as we get more stability in the business, get some recurring revenue streams and feel more comfortable with our position we absolutely have plans to offer a product for some of the longer‑tail publishers who might not have 10, 20 million or 100 million or a billion pages a month, they might have 100,000 to a million pages a month - or even smaller if they wanted it. We'd have to change the support model a little bit, but it would still be compelling for them. We'd also have to change the pricing to make sure that it fits within their budgets. But, it is absolutely on our road map to work with both publishers large and small.

At what point do you make this into an advertising solution similar to a Vibrant or Kontera?

Well, it's definitely not our current focus to build an ad network. The people that were building ad networks were reasonably successful, but their customer was the advertiser.

We want to make sure that we're satisfying the needs of the publishing community first and foremost, and become part of their daily workflow and processes, to not just publish stories, but to give this tool to audience development, yield managers, ad ops and so forth, to support the programs that they're trying to run.

Once we build a large enough network of publishers using the system - and it's already starting to happen that some of our publishers are asking us to provide introductions between properties - it's something that we can easily do, but right now it's not our primary focus.

The content marketplace business is booming, and our platform in a content marketplace would perform better than the existing players, because it's endemic, it's above the fold, and it's in a place where users are engaging.

Let's take a hypothetical use case. Can you envision down the road providing your subscription service, let's say, to competing big publishers? Big media companies that will end up linking to each other because it just makes financial sense? "Frienemies?"

There is a difference between a promise of the system and a desire of the publishers themselves. Right now, a publisher can program the destination of a link anywhere they want it to go. It can go from one title to another title that they own and operate, or it can go to an independent third party. It's easy to ink that [third party] deal, but how do you actually make it work? What are you doing on your website to drive 100,000 people to mine? Are you changing your navigation? Are you running house ads that say, "Go check out Pete's site?"

In practice, it's hard. In principle, it's easy. What happens is that these deals die on the vine, they never get renewed, and they say, "Wow, I did all that work and it didn't yield anything for us."

LinkSmart is the way forward for those types of deals. Using your "frienemies" example, if two large, competing publishing platforms or publishers decide that they want to use our system for good and trade traffic back and forth, they absolutely can - if that introduction was made amongst themselves, I'm not going to stop them from how they want to program their links. They both have to be using the system, obviously.

Is there an SEO benefit?

Currently, Google is not officially following JavaScript, though they do follow it a little bit. The SEO benefits work is if we take a website that doesn't have a lot of links and help them with the placement and management of links, we could decrease the bounce rate, get people to go deeper into the site, engage more of the content. Google notices this. They see bounce rate. If the user goes to a website from SEO, organic, and they bounce right after, then Google probably puts that into their 250 different signals about the value of that website.

Secondly, if Google starts to follow JavaScript, and we're putting good links on good anchor texts and going to other pieces of content in and around their site, then Google is now discovering more content, potentially putting it in the index, getting more organic search results and traffic, which could be a benefit.

Again, we're not stating and putting the flag down that we're an SEO tool, but that could be a benefit at some point when Google starts following more in‑text JavaScript links. We're not doing it to be disingenuous or cloaking or any of that stuff. We're completely above board and transparent. In fact, we've tried to reach out to Google and tell them what we're doing, and they understood it and they've nodded their heads and said nothing.

Looking out 12, 18 months, what can you share in terms of things that you would like your company to accomplish in that timeframe?

First and foremost, we want to be seen as a vendor that provides some of the best service to the publishing industry. I want people to remember that LinkSmart people are professionals, timely, responsible, and provide an offering that not only works well, but they do it in a very standup way.

Second, we want to make sure that we are constantly iterating on the product and take all the feedback that our publishers are giving us and incorporate it into a coherent and sustainable product road map.

In the next 12 months, we want to make sure that we're successfully scaling the business, of course, and make sure that the model that we build this under is sustainable and makes money.

Our goal is to provide a foundational technology to the publishing industry, which they'll use for a very long time.

Follow Pete Sheinbaum (@sheinbaum), LinkSmart (@linksmart) and AdExchanger (@adexchanger) on Twitter.

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