It's been a year since photo ad network Pixazza morphed into Luminate, which a wider platform for sharing, indexing and monetizing publishers' online images. The four-year-old Google Ventures-backed Mountain View company has steadily been rebuilding itself from an "AdSense for Images" into a platform for consumer-facing image apps, as Chief Revenue Officer Chas Edwards tells AdExchanger.
AdExchanger: What's changed with Luminate over the past 12 months?
CE: What's changed is that the wind has gotten a little more behind us. The rise of Pinterest as the third biggest social network, along with Facebook's purchase of Instagram has made it clear that images are a central part of the internet experience. While photos have always been important, searching for them and being able to monetize them has not be a major business function.
Why is that?
As an example, Facebook, arguably the most important website launched in the past 10 years, is built around photo-sharing. publishers such as yahoo derive more traffic from photo content than from their articles. however, time spent per page in photogalleries was pretty low and that means lower consumer engagement and lower ad revenues.
But Instagram and Pinterest have made scrolling through photos okay. Publishers have caught on and now they're promoting their photos as something to be proud of. That has helped Luminate increase its conversations with publishers.
Image-views are the foundational metric that our ad revenue is built on. We look at how many premium images in our system, and we saw a billion image-views in May and have grown it from several hundred million. The month before May, we at 870 million. In July we will do 4 billion image views on premium sites.
How does time spent engagement metric get transferred to images? After all, a picture is worth a thousand words and one image versus another doesn't take any longer to see.
Right. As humans, we can process photo info more quickly than text. The other problem, when you as a consumer find the same photo interesting, it is hard to equate a particular value to it. Context is everything. For example, say the photo we both see has a guy's sneakers that I like, while you like the DJ. We are both interested and we both have to leave the website the picture is on to find out more. So I get sent to Zappos by clicking on the sneakers, while you go to iTunes. With the indexing and tagging system Luminate has built, we can place apps on an image that bring out the relevant content to those individual interests.
The clear e-commerce play from indexing images certainly sounds valuable. But does it drive the engagement that brand advertisers want to see, as opposed to a lower cost direct response position for the images?
Fundamentally, what we're all doing is bearing out the richer experience to each image. An image with Luminate's apps on it, on average, leads consumers to spend 6 second in incremental time spent per unique per photo. To put that in context, we all spend 1 minute per pageview on the internet. So we're making the internet more engaging and we're doing that with photos.
How many photos has Luminate indexed? And how does that work for advertisers?
We process 20 million new photos each month. our ad product is called visual targeting. in the same way google put relevant targeted ads on a page based on text, we deliver relevant content and ads to an individual image. we have a huge library of images. let's say a hair color marketer wants to target women who want to change the color of their hair. We can place ads on images of blondes and redheads and make those images more valuable for the publishers whose sites their on, for the consumer who's searching for a image of the color hair they want and for lastly, for the advertiser who wants to reach a specific kind of consumer.
How about retargeting? Is that where you see a lot of the business gains?
Yes, but in a way than conventional retargeting. An advertiser who sells shoes, is more interested in behavioral targeting. So the 150 million uniques who engage with Luminate, we know which users are drawn to entertainment, sports. With that information, we're able to deduce from the images what a person is looking at. Ultimately, it helps us get us more sophisticated about targeting in general.
Is Luminate more about direct response versus brand advertising? Or do you see the two as inextricably linked, especially when it comes to images?
That's the money question of our whole industry is facing. Direct response is how most new media platforms are monetized. Then, brand advertising comes in when the platform is evolved. The reason is that a new medium reaches a new audience faster than its industry can figure out a new ad solution. When cable television was launched, most of the money was direct response because they had to have a mathematical equation as to whether the advertising was working or not. As cable and broadcast began to resemble each other, premium brands started to approach both similarly. Cable wasn't the negative it once was. People tend to forget that evolution.
The thing about the internet is that it has worked so well as a DR medium, and as such, that part of the business has matured much more quickly, mostly thanks to Google's success. As a result, marketers and publishers have been spending more time chasing DR dollars, instead of making the stuff inside a standard display ad more interesting.
We see the opportunity to help brands that have photo assets, that have their own Tumblr pages, Instagram feeds, things that are more image-heavy than text-heavy, and we see brands are starting to develop an image strategy for their advertising. If we can marry that with better distribution and ad strategy, we can help bring them a business model for their gallery content. The ultimate winner is the consumer. After all, television is still the biggest single ad medium and that's all about images. At the end of the day, brands that want to talk to someone in image mode, and with the internet, much of that conversation is starting to happen around photos.
By David Kaplan