On April 9th, Looksmart publicly announced to the world that they had, as of that day, made the transformation from human edited directory, to a pay-per-click search engine. Shortly after, we also received a phone call from them explaining that since our company SubmitExpress.com is a valued partner of LookSmart they wanted to tell us about their new program first hand. They spent about half hour with us going over the details of the new program and also informed us that we will no longer receive commissions on referrals to them though our site and were asked to remove their banners.
With absolutely no notice, Looksmart changed from their standard $149/$299 one-time paid inclusion fee to a new program based on a $49 setup and standardized click through rates of 15 cents per click. Additionally there is a minimum account deposit of $150 to initiate a new account.
What began as a bold step into the pay-per-click realm for LookSmart, has officially backfired with extreme prejudice. The new program not only created a stir in the search engine marketing community, it managed to confuse nearly every business currently indexed in their system. Reports from individual webmasters to major search engine news publications are criticizing the new system saying that it is an unethical bait and switch.
Most of LookSmart’s advertisers paid $299 for what they believed was a lifetime membership into the Looksmart directory. With LookSmart’s new PPC program, advertisers were sent an email with an option to upgrade to the new program and were offered $300 in free clicks or to be permanently removed, making it seem like advertisers are getting a great value. The offer seems nice at first glance, however there is one catch the $300 free clicks will be spread out over 20 months, meaning advertisers will actually get $15/month credit or 100 clicks. Furthermore, if the $15/month budget is not spent, it will not roll over to the next month.
Advertisers are given until July 11th to convert to the new program. Those who decline to do so will be removed and if they decide to get back in later, they must pay a $49 setup fee.
We decided to activate one of our accounts, which had over a hundred of our client domain names. Several of our clients reached their maximum monthly limit within a few days. We received an email notification every time each client reached their limit saying that they will be removed or we must allocate more clicks/funds to the account. To our surprise these sites were never dropped, even tough we did not allocate more clicks/funds. It turns out that we are given free clicks until July 11th, no matter if the account has been activated or not, so there is no real benefit of waiting until July 11th to activate your account.
Looksmart also informed us that each new account would get to provide 10 keywords. This was sort of a good news as now we would be able to come up better in the search results. However, come to find out, existing accounts will have to pay $49 to provide the 10 keywords and any additional changes in the future will also be subject to a $49 editorial fee. Boy, were we upset! LookSmart tried to make us feel better by offering a $20 off coupon to use towards the update fee. This coupon is part if the email sent to existing advertisers.
Many Looksmart advertisers will receive far more than 100 clicks from Looksmart and its partners (such as MSN) each month. This is important to note, because a click from a Looksmart partner also costs 15 cents. There are several reports from unsatisfied advertisers who claim that they received far less traffic from LookSmart and its partners than LookSmart has charged them so far. An explanation could be that search results from Inktomi are also counted towards the clicks. As you may know, Inktomi has partnership with LookSmart. Inktomi uses the title and description provided by LookSmart. It is thought that search results in Inktomi are also subject to the 15 cents per click charge. This was not confirmed by LookSmart. We have sent an email to our contact at LookSmart enquiring about this and we will have an update in our next issue. If this is true, it would mean that Inktomi id double dipping advertisers, by charging a paid inclusion fee and also charging CPC charges via LookSmart.
Looking further in our account, we found that the LookSmart tracking was very poor and not to our satisfaction. It simply states the number of clicks received. No explanation of which of the partners these clicks came from or what keywords were used. If better tracking was provided, it may help the advertisers in deciding to continue with the service or not.
Our recommendation to our readers who are current LookSmart advertisers is to renew their account at least to receive the free $15/month clicks and also voice your complains by sending an email to expsub@looksmart.net. Although, it is highly unlikely that LookSmart will go back to the old system. Maybe we can hope that this will result in additional free clicks. Ultimately, it comes down to this: is 15 cents a click worth it for your site? Many people were upset when Overture (formerly GOTO) raised their minimum cost-per-click to 5 cents from a penny. No doubt, that many sites will not be able to afford 15 cents a click and will discontinue their service with LookSmart.
Looksmart has clearly made this unforeseen change in an effort to boost revenues. The move should work if they can retain enough of advertisers. Unfortunately, there may not be enough advertisers who place that much value on a Looksmart listing.
Article by Pierre Zarokian of Submit Express. http://www.submitexpress.com/ Pierre Zarokian is the president of Submit Express (http://www.submitexpress.com) and a search engine optimization expert. Submit Express provides search engine submission and optimization, opt-in email advertising and press release services.
