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Quigo Announces Major Advertising Deal with Time Inc.
Deal Includes Grade A properties: Time.com, CNNMoney.com, People.com,
Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3378548 posted 7:34 pm on Jun 25, 2007 (gmt 0)

Targeted Advertising Company Quigo Announces Major Advertising Deal

We've gone from relative obscurity to being one of the top ad players in the U.S. in one stroke of the pen." - Quigo CEO Michael Yavonditte speaking with WebmasterWorld CEO Brett Tabke

By Lane R. Ellis
Editor, SearchEngineWorld
and Exclusive video Interview by Brett Tabke

June 25, 2007

Quigo Technologies, Inc., a privately owned Internet search engine marketing company headquartered in New York City, has successfully taken all of Time Inc.'s advertising away from leading search engine site Google in an exclusive agreement anticipated to be worth in excess of $100 million over the next three years, according to Quigo CEO Michael Yavonditte. While today started out well for Google, with an announcement from online auction leader eBay that it has resumed Web advertising with Google , the outlook for Google took a decided downturn as the company appears to have lost a major advertising partner in Time Inc. While the loss of a possible $100 million plus advertising client might not represent major damage for Google, it most certainly is a huge deal for Quigo, whose AdSonar contextual advertising program has been making steady gains in the $2 billion online contextual advertising market since 2005.
Exclusive Interview with Michael Yavonditte of Quigo
Part 1Part 2

In a SearchEngineWorld exclusive interview with Mr. Yavonditte, Brett Tabke, CEO of WebmasterWorld, a popular community of web and search engine optimization professionals , asked about the company and its steady stream of success over the past seven years. Yavonditte first made the major announcement about the Time Warner deal, however, noting, "We're pleased to announce that we've just signed Time Warner as a customer, and many of the top brands that you may have heard of before - People, CNN, Money, and Time, and a number of the other sites there are now part of our network on an exclusive basis," and went on to describe terms of the agreement: "It's a three year partnership, and it's valued at over $100 million." Quigo echoed these sentiments this morning on the company's web site, "This morning we're thrilled to announce a broad, long-term and exclusive relationship with Time Inc. Under the terms of the agreement, we'll be deploying a custom version of Quigo's private label AdSonar platform across Time Inc.'s leading digital brands." The brands involved are Time.com, CNNMoney.com, People.com, EW.com, InStyle.com, SI.com, Golf.com, FanNation.com, SouthernLiving.com, SouthernAccents.com, Sunset.com, CottageLiving.com, CoastalLiving.com, CookingLight.com and MyRecipes.com.

Quigo History

Quigo was founded in Israel in 2000 by Yaron Galai, now the company's Senior Vice President, and Oded Itzhak, who developed the proprietary search solutions AdSonar and FeedPoint. Last fall, ESPN switched from Yahoo to Quigo, and shortly before that Cox Newspapers moved its 17 web sites from using Google's AdSense program to Quigo. Additionally, FoxNews.com stopped using the Google program and moved to Quigo.

A Serious Threat to Google

In a February 26, 2007 New York Times article by Louise Story entitled, "An Ad Upstart Challenges Google," Ms. Story notes that the success of Quigo "has apparently persuaded Google, which is accustomed to calling the shots in all aspects of its business, that it has to change the way it sells the sponsored link ads in the future."

An Interview with Michael Yavonditte

Online advertising company Quigo is, according to CEO Michael Yavonditte, "Quietly amassing a pretty large ad network," and has for the past five years "focused on helping publishers monetize their traffic." Yavonditte told Mr. Tabke in an exclusive interview with SearchEngineWorld that he is, "very excited about the company we're building," and spoke about the history of Quigo. The company's first investor " was Highland Capital, which was led by the former founder and CEO of Lycos Bob Davis, and then the folks at Disney - Steamboat Ventures came in and invested in the company," and Yavonditte noted that, "The company has been in business seven years, and we are now firmly planted in the top ten ad networks in the U.S. We serve over 20 billion ads a month." Company founders Galai and Oded began working on the systems which would make the company what it is today early on, when they "started playing around with artificial intelligence and semantic algorithms, and started to hit on some ideas to use their technology to extract information from web sites," according to Yavonditte, and soon the governments of both the U.S. and Israel became interested. "The National Security Agency ended up asking them if they could license the technology," Yavonditte noted.

Yavonditte described Quigo as doing "some behavior targeting, some demographic targeting, and some contextual targeting. We have pioneered the art and science of selling site-specific, page-specific advertising in an auction environment, and now do it for hundreds of sites," and also noted that, "The niche we've carved out is [that] we work with real sites, quality sites. They can be small, five person companies, they can be two person operations, but if they are real sites and real companies, we'll want to work with them."

Yavonditte spoke of Time Inc. as having "a huge collection of great brands and great sites. This is really one of the first times that they've started networking them together. For publishers and media companies that want to network their sites together and create a unified buying experience, we're the company to work with." When asked how Quigo differs from the competition, Yavonditte noted, "We have a great ability to monetize traffic at a very high level. We have thousands of advertisers. We have a very sophisticated yield system. We have total control on the advertiser's side - they can pick exactly where they want to be, literally down to the placement, and each placement has its own marketplace, its own pricing. So, the home page of CNN Money might be worth $10 a click and the bond section might be worth 32 cents a click, and our system will figure out the theoretical values for each one of those placements, and drive that marketplace. And, we let them sell into it." According to Yavonditte Quigo is, "a very technology-oriented company - a very math-oriented company," and notes that despite being based in New York City, "we're a very hardcore Silicon Alley company. It just happens to be that a lot of our folks are from Silicon Valley, transplanted to Silicon Alley." The company also maintains a video laboratory in San Jose, California, where former early Apple Computer employee Randy Wigginton is leading a team working on what Yavonditte describes as "a killer video product that is very different from anything you've ever seen before," also noting that the company is "soon to have some exciting video products to announce."

With the success the company has had over the past several years, it has become "one of the largest players in paid inclusion, and one of the largest ad networks in the United States," Yavonditte noted, and went on to explain that Quigo already has many large and well known clients. "We've worked with some of the top brands already - ESPN, Forbes, Career Builder, the Chicago Tribune, The [New York] Daily News. This just adds to the war chest of the sites that we work with on an exclusive basis." Describing the Time Inc. deal Yavonditte noted, "We've gone from relative obscurity to being one of the top ad players in the U.S. in one stroke of the pen," and expressed excitement over the deal, stating, "We're obviously excited about it. We're no longer a secret. Every advertiser and publisher in the United States should want to work with us."

When asked when Quigo might become a publicly traded company, Yavonditte said: "There is a lot of interest in the company right now. We have options. You'll see us continue to build new products - build our core competencies within our network. You'll see something in the video space coming from us. You'll see more products in the graphical ad space coming from us. Whether Quigo goes public in six months, or gets bought for a sizable amount of money, I'm not sure which is going to happen, but we feel good about where we are."

With Quigo entering into an exclusive long-term agreement with Time Inc., one of the largest content companies in the world, the future looks bright for a company that has been in existence for less than eight years.

Editors Note: You will be hearing more from Lane over on SearchEngineWorld in the coming months. We had this story and it was too good not to cover. -brett tabke

 

Web_speed



 
Msg#: 3378548 posted 1:20 am on Jun 26, 2007 (gmt 0)

Don't you just love it how big mighty G are getting some of their own medicine.

They've been so busy killing so many web sites this year...hearing about the exsudos of some of thier big advertisers/publishers is great news to the webmaster world.

Compworld

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3378548 posted 2:03 am on Jun 26, 2007 (gmt 0)

Eh, the are still nothing to be concerned with. Sure, you can do this with Time Publishing, but can you do it on a big scale like Yahoo! or Google? Doubtful. Selling on a select number of sites is much easier than a group of thousands of sites. If Quigo is unable to get thoe advertisers to pay those very lofty rates, this could seriously shoot them in the foot. I am sure they have guaranteed minimums within their agreement. It would be interesting to see how well they are selling out all their CPC inventory from .32 - 10.00. Doubt they can do it.

weeks

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3378548 posted 3:02 am on Jun 26, 2007 (gmt 0)

Compworld's analysis sounds right to me. Contextual advertising in relation to the news is difficult, even financial news. Simply look at the newspaper in your hometown. It is the same with much of what Time, Inc. does.

G's traffic in contextual advertising has come mostly from their own website--the number usually quoted is about 80 percent or more. Then the rest of the traffic comes from very vertical websites, such as for travelers to Europe, who are visiting that website for a reason.

So, add that up: The marketers are not interested in much of the context that Time, Inc., has to offer (audience, yes; context, no), and add to this that there is not a lot of traffic going to Time's websites that would be interested in most contextual ads, and you can see the problem for Quigo.

BUT, having said that, Quigo does have a great client in Time, which is very aggressive on the web. Time, for example, understands the value of opening up their archives. This will help Quigo a great deal. Does a widget marketer want to be on a Time website where Time covered widgets in-depth, even if it was years ago? I would think they would.

What has not been done and what many of us in the news biz would like to see Quigo do is go after some markets which should be interested in selling in context to the news. Reporters and editors are not as scared of this as they were a few years ago.

More importantly, Time and Quigo need to come up with some research that shows something like, "people who read Golf travel articles in the archives are more likely to buy new equipment in the next 12 months."

Good luck to Quigo and Time, both.

iThink

10+ Year Member



 
Msg#: 3378548 posted 9:56 am on Jun 26, 2007 (gmt 0)

Sure, you can do this with Time Publishing, but can you do it on a big scale like Yahoo! or Google? Doubtful. Selling on a select number of sites is much easier than a group of thousands of sites.

It is a safe assumption that 80-20 rule or something like that is applicable on online advertising too. I guess Alexa top 1000 sites have 80% share of all CPC inventory available on the web today. Looks like Quigo is going after these top brands (sites) to capture a significant chunk of that 80% revenue first. They don't need to go after sites with few thousand page views per month to capture significant market share from Google and Yahoo.

Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3378548 posted 12:59 pm on Jun 26, 2007 (gmt 0)

> but can you do it on a big scale like Yahoo! or Google?

They aren't too far behind Yahoo in ads served right now.

ByronM

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3378548 posted 1:06 pm on Jun 26, 2007 (gmt 0)

Glad to see some competition from a 3rd party finally (that isn't a bottom feeder!)

Swanson

10+ Year Member



 
Msg#: 3378548 posted 2:21 am on Jun 27, 2007 (gmt 0)

Compworld - "but can you do it on a big scale like Yahoo! or Google?"

I suppose I am backing up what Brett said, but it really cracks me up when hearing things like that - there is real ignorance about the state of the textual advertising market, and ironically it is "reverse" knowledge that is causing this.

The webmaster community created Google by telling everyone how great it was - and then the masses believed.

And now the masses are telling webmasters that there are a select few ways to get to these masses as they all use the "big" search engines that they have been told to use!

Well as we play out over the past year and project into the next few years we need to realise that textual advertising is much more diverse, creative and innovative than purely "sponsored listings".

The harsh reality is that big publishers are looking for an alternative to google adsense, and for the first time there are real competitors with the guts to go for it - and the simple fact is that big advertisers are NOT exlusive, they will bend over backwards to advertise with ANY company that offers traffic on a CPC basis.

That means there is a huge scope for companies to take on "the big 2" - advertisers have NO loyalty and users have no long term loyalty either. That is what makes this next few years the most interesting in the recent history of the commercial internet!

Traffic is the currency of the web they say - however the beauty of the CPC model is that ANY adwords or Yahoo advertiser will take a punt on a company with zero traffic as they don't pay until they get a click. It is then up to that company to deliver quality clicks - and for that you need a publisher base.

Now if you could just get a publisher base and a good sales team then you might have something.................

......a $100 million contextual deal might help

Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3378548 posted 2:37 am on Jun 27, 2007 (gmt 0)

> publisher base

They are quietly feeding a huge chunk of the old school media sites. Newspapers, TV, and even some LA studios. They have a select publisher base.

I think they got this deal for one reason : effective CPM. They were able to (my figure) double what Google was paying out to the publisher (I think I am actually quite a bit low in that figure). Google is a giant corporation with hands, policy, and red tape everywhere. While Quigo is mid sized and takes care of its premier accounts with personalized and very human attention. I think there is massive potential there.

Compworld

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3378548 posted 5:27 am on Jun 27, 2007 (gmt 0)

To each their own. but Quigo is no a viable option for the masses. Not crazy about Yahoo or Google either. A mix from several different providers would be ideal for anyone. All major sites work with third party networks now a days, it is nothing special. I guess in a year we will see how they do.

Januuski



 
Msg#: 3378548 posted 5:48 am on Jun 27, 2007 (gmt 0)

I hope that more and more publishers (especially smaller publishers) will dump AdSense. I guess the main reason behind this is that Quigo and other networks are not hiding commission structure and it is clearly set how the revenue is shared.

With Google we have to be guessing and do calculations based on their financial reports. I did my tests and it was clear that Google was keeping at least 75% of the revenue from every click.

Google is great for search but I wouldn’t recommend AdSense to any publisher.

old_expat

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3378548 posted 7:08 am on Jun 27, 2007 (gmt 0)

This may not make too big a dent in Google, but it should be a loud wakeup call.

I wonder if Bill Gates is circling anywhere in the neighborhood?

I'm glad to see it. The industry needs variety.

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