Pixazza raises $12 million in Series B

Mousing over images and getting information is getting closer to reality

Pixazza, a site whose service has been referred to as a "Google AdSense for Images" on Monday announced it's raised $12 million in a Series B round of funding. The latest round was led by Shasta Ventures, with previous investors - Google Ventures, August Capital, and CMEA Capital - reinvesting as well.

The new funds come just as the Mountain View, Calif-based startup releases a new self-service publishing tool for any publisher to monetize images on their Web site. Want to know where to get a hoodie like Mark Zuckerberg? Well, if VatorNews were integrated with Pixazza, we could "theoretically" tag that sweatshirt and a viewer scrolling over it could see a list of similar items and where to buy them.

Heretofore, Pixazza - which claims to have over 25 million unique visitors per month and is ranked among the 50 largest networks in the U.S., by Quantcast - has been focused on larger publishers, such as Us Magazine and Access Hollywood. Pixazza. Pixazza has partnered with about 75 to 100 publishers, according to Jim Everingham, CTO and founder of Pixazza.

Since inception, it has largely focused on entertainment sites where the paparazzi can easily amass photos of celebrities and their to-die-for outfits. The idea of image-based shopping is logical in that context. Recently, Pixazza expanded to publishers of houseware and sports. They'll soon be announcing the publishers they've signed up in these verticals. 

For now, they're mainly on entertainment sites.

So, how does Pixazza work? It's not dissimilar to how it works on entertainment magazines, that typically are flush with photos of celebrities with descriptions of their outfits and accessories and where to buy them. 

In like vein, on US Magazine.com, you can find out where to buy Claire Dane's Valentino dress. But what was probably an intern's job at one point - finding matching items for a celebrity's particular clothing or accessory - can now be done via Pixazza. What simplifies the publisher's job even more is that Pixazza will also bring the retailer.

Of course, that means the publishers will have to give Pixazza a cut for matching them with a retailer/advertiser.

Currently, Pixazza has relationships with 75 different retail outlets and has access to 10 million products, which it can display on images for the publishers. If a reader clicks on those images, the retailer/advertiser typically pay per click - anywhere between 10 cents to $2, said Everingham.

If the retailer prefers to pay on a CPA (cost-per-acquisition) basis, then they pay up to 15% of the sales price.

As for the publisher, they too get a cut. If the publisher fee is based on the performance of the ad, or the click-through-rate, the results are apparently better than a display ad, which typically gets about .02%. According to Everingham, CTRs for image-based ads are over 1%. Everingham said that retailers also work with Pixazza on a CPA (cost-per-acquisition) basis, but he wouldn't disclose the conversion rates.

This is no doubt an opportunity for publishers to monetize their photos without doing the extra work of finding matching items and connecting with the retailer to advertise for them. My guess is that just like Google's AdSense, these ads aren't going to drive the publisher's business, but it will be a nice supplement. 

Now, will there be potential challenges around image-based monetization? Yes. It's possible there are legal ramifications to monetizing around images of famous people or their property. That may or may not be Pixazza's problem. But it could be a publisher's problem.

Nonetheless, this way of shopping and gathering information is an unstoppable trend. I'm sure we'll see more of it.

I just can't wait until image-based discovery gets to the point where I can snap a photo of, say a tree, and know its origin, how to take care of it, and where to buy it.