LinkSmart Digs Deeper Into In-Text Links With New Bidding Exchange

LinkSmartLinks may be the workhorses of a publisher’s marketing strategy, but to Pete Sheinbaum, former CEO of the online newsletter Daily Candy, they represent a multitude of opportunities.

After the publisher was acquired by Comcast in 2008, Sheinbaum founded LinkSmart, which offers tools to help publishers manage and monetize their links. AdExchanger sat down with Sheinbaum for an update on LinkSmart and its new Audience Marketplace.

AdExchanger: What problem does LinkSmart solve?

PETE SHEINBAUM: Links are something people don’t think about as a strategic option to shape and move traffic. They use squares and rectangles. They think about, what can I stick into my page around the content to get people to go places, rather than thinking about what’s in the content to then create the relationship to another article.

So in my research of the in-text linking space, I looked at companies like Vibrant Media, Kontera and InfoLinks — players that were doing something in the linking space, but they were really an advertising network. They would rent real estate on publishers’ websites, write them a check to borrow that real estate and the real customers were advertisers trying to get people to look at the ads.

Where other players took an advertiser’s view of the world, we looked at it from a publisher’s perspective. I wanted to create a tool for publishers built on my experience as a publisher, which would help editors get more information about engagement: what links people were clicking, where they’re going, what’s trending at a keyword level, link level and page level etc., and really give them a new lens to think about how people were engaging with the text.

LinkSmart provides publishers with a platform to do all of these things. Once our code is on a page, we ingest all the content. After we analyze the content, we provide it back to the publishers to show people where their opportunities are to get more out of the traffic they have. We also give them recommendations to optimize their content.

Who are some of your customers?

We’re working with some of the largest media companies like AOL and BuddyTV, as well as small companies and we’re excited that they’ve adopted us as part of their audience development system.

We had a beta launch two years ago and we brought our commercial product out last summer. We have over 100 million uniques, close to a billion page views, and that’s probably going to double over the next two or three months. These publishers understand the value of a visit and because of that our business model has been accelerating. We raised another $5 million earlier this year in venture capital, we’ve got about 20 employees in Boulder and New York City and we’re going to expand that over the next 12 months.

So what is the Audience Marketplace?

Publishers have an insatiable appetite for traffic. Many of them have come to us and asked, ‘are there other publishers you’re working with that might be interested in sharing some of their audience with us?’ So we are now launching the LinkSmart Marketplace, which is something we’ve been thinking about for several years.

How it works is a traditional auction model, where a publisher will request traffic from an audience on our network for a destination that they have in mind. We will then look through our network for publishers that have opted into participating and sharing their traffic. They will pay for this traffic on a CPC basis, we will remit a portion of that to the publisher who’s sharing their traffic and all of this is delivered via a text link so there’s no widget.

For example if the words are Tiger Woods and the publisher would like to offer that to the network, if you’re Sports Illustrated, and you would like to have that traffic, the person will go to the article, they’ll read the article, they’ll see the words Tiger Woods, they click on those words, and that will send them to the other publisher’s website to another article that’s about Tiger Woods.

Is the Marketplace similar to Google AdWords?

It’s not really AdWords because when you’re buying AdWords, you’re actually buying a word. Say I’m targeting baseball bats, because I’m a retailer. So I’ll add the words baseball bats to a keyword list, I’ll place a CPC bid and when someone searches for baseball bats, my ad would show up in the sponsored listings,  someone will click on it, and I’ll pay Google.

We don’t ask our partners who are looking to get audiences for their websites to buy words. That’s not something I think is most efficient for them. What they care about is somebody going to this particular page. So what they do is they put the destination into the system. Our algorithms look at the page, the metadata, the content, sentence structure, keywords, etc., and then our algorithm looks at the network and finds appropriate matches of links in the network in that particular page.

So if the article is about Tiger Woods not winning a major tournament and they want more people to read this article, we will go through the network and find Tiger Woods or Tiger Woods golf tournament—things that are relevant and in context for this particular destination—and we will update a link or add a link and send that traffic back to the publishers.

People aren’t buying words, they’re just asking for audiences to come and they pay for each click on a CPC basis. Our system is very smart in that we can detect where the right places are in the network to either update or add a link on a word to drive people there.

The best part of this is this is not new. Maybe the model of asking people to buy and sell traffic on this sort of method is new, but editors have been linking off of their sites forever. Since publishers have been trying to stabilize their business model since CPM rates fall with programmatic buying and selling, they’re looking for new revenue streams without having to make many changes to their current business model.

How many publishers are using the Marketplace now?

Right now, we’ve got a few select customers who are using the Marketplace. We’re still fine-tuning it and making sure everything works. We’re going to keep a small number of publishers and grow that over the next several months until October when we open the doors to anyone who wants to participate.

It’s not a requirement to run the LinkSmart platform to be in the Marketplace, unless you’re a seller obviously, since that’s what’s generating the links for the people who are purchasing them.

What’s your approach to mobile and the fat finger syndrome?

Most of the fat fingering has been on the advertising placements.

The links that we have on mobile sites or traditional web pages look and feel like regular links. When you’re reading an article on a cellphone and you’re scrolling through it, and see a text link, we think it’s less a fat finger and more a specific interest that’s driving those clicks. We haven’t had any publishers report that they think the clicks on their devices are invalid.

What’s the ideal number of links to a page?

We believe that every publisher is unique, so say some of our sites are very video or image heavy might have a small caption, and if there are 50 or 100 words in a caption, there should only be one link. After we analyze the content, we report back what the optimal link structure is for that site. That might be different for another website.

What’s the average CTR for links shown on mobile sites versus traditional websites?

The mobile rate is higher but we don’t think it’s a fat finger problem. We’ve seen an average click thru rate of between 3.5%  to 5% average on traditional desktops or laptops. Tablets mimic that. Mobile skews higher, and we’re seeing about 4.5% to 6.5%, depending on the format of the screen. There are a lot of different formats for how people are displaying their content and these ranges are from those that have optimized for mobile devices.

What trends are you seeing in responsive design?

Historically there have been third-party companies that say we’re going to take your website, mobilize it and sell your ads for you. That’s going away. Most publishers know you need an in-house mobile technology solution in a design that is married to your brand and to the type of content you’re providing.

I think the biggest trend in mobile is not necessarily just taking your content and formatting it for a small screen. I think a bigger trend is thinking about the use case of mobile versus the use case of a desktop or a tablet and tailoring your content appropriately. I see a lot of publishers thinking about this.

Looking ahead, will you also include a targeting capability for links?

As people are clicking on links, we’re collecting a lot of data. I’d classify the data as real-time intent data. For example, as somebody clicks on a link about strawberries or apple pies, we know what they’re interested in seeing on the next page and we can inform the page they’re going to about what their real-time intent is.

That data, which we’re not creating a product for right now, is something we’re providing to the publishers to better inform the content or advertising they’re trying to show around the user’s real-time intent.

As we get more integrated with publishers’ ad serving technologies or their CMS platforms, we could add a layer of information to destination choices of our system based on the economic metrics of a particular page.

So if a link was on the words Tiger Woods and we could bring in the ad server information about which page was performing better economically, you could know that a video of Tiger Woods was getting a $30 RPM and an article about Tiger Woods was getting $15. The operator could then steer the traffic to the right page for a better return.

The two big things that are probably coming from us in 2014 is doing more with the real time intent information that we are capturing and integrating that information to help our customers make better decisions.

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