• by Gavin O'Malley  @mp_gavin, June 26, 2007

Marking its biggest one-time deal to date, contextual ad service Quigo Technologies has secured an exclusive, multi-year partnership with Time Inc.

Quigo gains access to more than 19 million unique visitors who flock each month to Time.com, CNNMoney.com, People.com, and SI.com, among other sites.

For the first time, Time Inc. will be able to directly offer its advertisers text-based pay-for-performance ad serving across its entire network, site by site, and page by page.

With Quigo's AdSonar-powered ad platform, Time Inc. advertisers can buy space on, say, the home page of People.com, sections like "Time.com-Health and Science," along with hundreds of topics or keywords, including "Mutual Funds" or "Chicago Cubs."

"We chose Quigo because of the flexibility they offer and the fact that many of our advertisers are very response-driven," said Vivek Shah, president of digital publishing, Time Inc. Business and Finance Network. Until now, Time had divided its contextual ad duties between Google and Yahoo.

The companies estimate that ad revenues will top $100 million over the first three years of the partnership, according to Henry Vogel, chief revenue officer at Quigo.

In the competition for contextual-text-ad-serving, Quigo has been nipping at the giant knees of Google and Yahoo. Over the last two years, the New York-based company has won over a number of top-tier media sites, including ESPN.com, FoxNews.com, Forbes.com, as well as Cox Newspapers' 17 sites.

Apart from its David-and-Goliath charm, publishers have been attracted to Quigo's transparent ad placement operations, which have stood in contrast to Google's and Yahoo's more veiled approach. (Quigo gives advertisers a list of specific sites where their ads have appeared, as well as the chance to buy space on specific sites and pages.)

Quigo's strategy is proving so effective that Google earlier this month followed suit by offering placement performance reports for AdWords--allowing advertisers to see where their ads appear, as well as site-by-site performance metrics.

But Quigo's success does not rest on its transparency alone, assured Vogel.

"Our strength comes from our highly customizable and customer-centric focus," said Vogel. "This is about publishers who want control over the ad-serving process, rather than outsourcing it to a blind network."

Quigo had 13 billion impressions in May, said Vogel, who predicted the number would rise to 20 billion monthly by the end of the year.

And Quigo's business is not limited to text ads. According to Vogel, the company is busy integrating its performance-based technology into other ad formats, including display and even video ads.

"We are at a tipping point with performance-based marketing," Vogel said. "The door is now open to explore other ad formats."

According to Shaw, Time Inc.'s main interest with Quigo is text-based ads, but the company would be open to exploring other ad formats with Quigo in the future.

Contextual ads generated about $2 billion in revenue last year--or 13% of online ad spending, according to eMarketer. Google took in about 60% of that revenue, while Quigo was left with less than 10% of the pot.

Other sites in Time Inc.'s network include EW.com, InStyle.com, Golf.com, FanNation.com, SouthernLiving.com, SouthernAccents.com, Sunset.com, CottageLiving.com, CoastalLiving.com, CookingLight.com, and MyRecipes.com.