Publishing

Luminate Opens Up Its Ad Platform


When former Netscape executive Bob Lisbonne looks at images on the Web, he sees vast amounts of wasted space. Most don’t even have a caption, let alone tags to identify specific objects within the picture. “Images are like the dark matter of the search universe,” he says.

Three years ago, he and fellow Netscape alum James Everingham started Pixazza to change that. The Mountain View (Calif.) company, which changed its name to Luminate on July 27, has designed software that scans trillions—yes, trillions—of photos on the Web. They’ve used that data to craft algorithms that can automatically recognize specific objects and products within a photo, from the brand of sunglasses worn by Lady Gaga to the bike used by this year’s Tour de France winner. For Web publishers, that means new opportunities to sell advertising. More than 4,000 websites, including tvguide.com and those owned by Hearst Digital Media, use Luminate’s technology. When they post a photo that includes, say, a new pair of Keds (PSS), the startup’s software can overlay the sneakers with a link to a shoe store. Retailers such as Gap (GPS), Macy’s (M), and Zappos promote their products through the service, and Luminate shares the revenue with publishers.

Now, Luminate is taking a page from Apple (AAPL) and Facebook, two companies that built hugely successful products in part by allowing outside developers to create applications using their technology. Later this year, Luminate will invite techies to use its platform and enrich images in new, non-ad-based ways.

To demonstrate the potential, Luminate has built a few of its own apps, which it released on July 27. The company’s Wikipedia app, for example, lets website owners automatically link Wikipedia content to photos. Post an image of the First Family, for instance, and the app could recognize President Obama’s face and display his biography when a user rolls his mouse over the image. Another app lets visitors click on a particular object, like a pair of earrings, and then post a link to Twitter. Any Twitter users who click on the link would see the photo with an indicator that calls attention to the earrings. Lisbonne hopes companies such as Netflix (NFLX) and Amazon.com (AMZN) find ways to link their products to Web images using Luminate’s technology.

Not everyone will be excited by a world riddled with more ads or by pictures saddled with Wikipedia articles and invitations to tweet. Elliot Schrage, vice-president for global communications and public affairs at Facebook and a Luminate board observer, stresses that the company’s technology gives publishers control over how and where to use it. “If you don’t want to experience it, you can turn it off,” he says.

Others are pursuing similar strategies: Image Space Media in New York was founded in 2008 and claims to have 10,000 publishers using its in-image ad technology. GumGum in Santa Monica, Calif., has been around since 2006 and says it is now serving billions of image-based ads every month. “As advertisers start to experiment with it, they see that it’s better-performing than” alternatives such as text ads, says Image Space Chief Executive Officer Jesse Chenard. For Lisbonne, all the activity suggests that interactive images are an inevitability. “A year or two from now, if a consumer mouses to an image and nothing happens, they’ll think the site is backwards.”

The bottom line: Luminate, which specializes in image-based ads, is allowing developers to use its object-recognition technology.

Levy is a reporter for Bloomberg News in San Francisco.

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