VigLink Aims to Turn Links Into Gold—But Will the Golden State Force the Company Out?

6/7/11Follow @wroush

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It’s an easy way for any publisher to get into the performance marketing game. But there’s more to Roup’s vision than that: ultimately, the startup wants to give publishers the data they need to get more proactive about earning affiliate commissions. VigLink’s analytics dashboard shows which outgoing links are bringing in the biggest commissions, information that can guide business decisions about where to place outgoing links and where these links should point to get the highest commission rates from merchants.

“Every click that leaves a site and arrives at another is delivering value from the origin to the destination,” Roup argues. “Publishers generally give that value away for free. They don’t track where their outbound clicks to, they don’t demand compensation, and they definitely don’t optimize to drive the compensation up. So our market is every site-to-site click, Internet-wide. We want to be the platform by which those are bought, sold, and priced.”

VigLink calculates that if every click eligible to generate an affiliate fee were actually tracked and monetized, it would bring publishers at least a billion dollars a year in new revenues. And that’s just the money currently left on the table when existing links aren’t affiliate-enabled. There’s another potential windfall from content that isn’t yet linked, but could be. To go after that revenue, VigLink introduced an automatic link-insertion tool this spring. It can automatically turn appropriate words in a Web page into links leading to merchants with affiliate programs. Roup says this feature was a direct response to customer requests. “Within three or four months of signing up, publishers were coming back to us and saying ‘This is great, how can we do more?’” he says.

Of course, many Web pages are already riddled with double-underlined links generated by ad software from in-text ad networks like Kontera, Infolinks, or Affinity. And many readers steer away from these links, which can generate unwelcome pop-up boxes or lead to irrelevant commercial sites. Roup says VigLink’s technology isn’t intended to cheapen Web content or interfere with editorial decisions (and the links on VigLink-activated pages look just like normal ones—no double underlines). But he acknowledges that the technology isn’t right for every Web publisher; it appeals mainly to those who are already in the business of monetizing eyeballs.

“I don’t expect that Wikipedia will adopt this product anytime soon,” Roup says. “Their brand is about non-commercialism. I think, though, that commercially motivated content is more prevalent than people might initially imagine. Ask yourself why the New York Times has an automotive section. It’s not because car enthusiasts are so excited to read those car reviews. It’s because there are carmakers excited to advertise alongside them.”

Publishers have “different levels of concern” about how advertising and editorial content are intertwined, Roup continues. “Some are so concerned that they won’t be interested in our product, and that’s totally fine. But there is the countervailing pressure, which is that paying journalists to write content is expensive. If we can create a new revenue stream that allows a publication on the margin to survive that wouldn’t have survived, I would say that is a positive force.”

In April, VigLink collected $5.4 million in Series B funding from Emergence Capital, First Round Capital, and Google Ventures, bringing its total venture pot to $7.3 million. The Series B money came close on the heels of a $1.1 million Series A round in August 2010 that allowed the company to purchase a Chicago-based competitor called DrivingRevenue.

But whether VigLink will be able to continue to build its business in San Francisco is an open question. That’s because … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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