Figuring out Really Free vs. Artificially Free got me thinking about the Lookery’s discontinued Artificially Free* offering — our free demographic reporting. We built it to gather keyword search referrers and then sell keyword targeting just as we sell demographic targeting. Ending the service was unfortunately the right thing to do for Lookery, a low-capital startup in a down market, but I hated turning away a thousand publishers and the whole thing left a big question unanswered for me.
When will referrer processing become significant for content sites as it already is for e-commerce sites?
By Referrer Processing, I mean changing the content of the landing page based on what site the visitor is coming from. The information in the referrer is primarily a domain name (Digg, StumbleUpon, MyBlogLog), but also includes search keywords and other parameters in specific cases. Dogster’s welcome panel for StumbleUponers visiting Snuzzy is pictured below as an example. This mechanism raises site visits by 25x for certain sorts of referrers.
Dogster has learned out to get more visits using referrer processing, by increasing the degree to which Snuzzy is promoted inside StumbleUpon. We had lots of anecdotal evidence at MyBlogLog that we created longer visits than Digg, which is another lever to pull. I also suspect that visit value (i.e. conversion to revenue) could be increased as the system was refined.
Lookery hoped to accelerate referrer processing for content sites by making search keyword retargeting easily and inexpensively available. Beyond what Hittail and other companies in the sector offer, we were planning to create a keyword network across everyone running our Javascript. Today’s Quancast article in the WSJ touches on both halves of the issue, but no one vendor does.
David Zinman, Yahoo’s vice president and general manager for display advertising, says his company recently launched a new ad-targeting service that allows advertisers to show display ads to visitors who searched for certain search terms. “We have data that is only available to Yahoo, and are using it in a very specific and customized way” for advertisers, he says.
Still, some ad professionals are enthusiastic about Quantcast’s new service. “Yahoo can do many of the things that Quantcast can do, but they only see behavior on their own networks,” says Jacki Kelley, president of North America for Universal McCann, a media agency owned by Interpublic Group. She says one of her clients is testing the Quantcast media-buying program.
Quantcast is building the network but does not help marketers or publishers directly target individuals. Yahoo! targets individuals, but does not include its networks. Now that social referrers are seen as an real sector, the problem will get solved. I’d bet on Facebook Connect in partnership with Microsoft Search to walk away with it, though bit.ly** has a shot if they want it.
UPDATE: I should have noted that Lookery also stepped out the search keyword business as we believe that Google will stop including keywords in its referrer URLs. This will crush the ecology initially but eventually provide a boost to Yahoo!, Microsoft, and Ask.
*Lookery’s free demographic reporting was Artificially Free because the value creation was not simultaneous with the expense of the free service and because the value creation was speculative (though either condition would have sufficed).
** I’m on bit.ly’s advisory board.
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