Lookery, a company that sells advertising on Facebook, other social networks, and other web sites, has been scraping the bottom of the social network advertising barrel, and growing fast. Starting at the end of January, it began guaranteeing Facebook applications and any other web site or widget a cool $0.125 per thousand ad impressions for any traditional banner ad it ran — a trivial amount for so-called cost-per-mille (CPM) ads.

Lookery’s plan was to hit one billion impressions by April, then introduce demographic-targeting features that allow for better targeting of users, and for higher CPMs from advertisers trying to reach specific types of users. This plan is notable because it signifies the increasing value of social networks, despite the often superficial skepticism about social networking monetization found among many in the media.

The plan is ahead of schedule, for what it’s worth. The company has gone from less than 200 million impressions in January to 640 million impressions in February, and last night, it hit the one billion impression mark (and there’s still a third of March left).

Of course, the arithmetic says that at a twelve and a half cent CPM, the company is making (a minimum of) $125,000 total for its partners — the company offers higher CPMs on some applications, and it neither discloses its total revenue figures or how much it is making from its ads.

So where’s the money (and the privacy)?

If an advertiser can buy advertising that only reaches the people they want to reach, then the ads are more effective, and worth more, especially to brand advertisers that still spend the lion’s share of their ad budgets on traditional media — that want to reach social network users.

Yes, Lookery isn’t yet making significant money from running banner ads on its social networks. But if it is able to build a successful way of targeting its ads, its bottom-scraping strategy could pan out to reveal more than fool’s gold. The company is collecting information on users across Facebook and its other sites, sometimes through cookies, sometimes through javascript that identifies demographic information. It collects basic information, like sex, age and general geographic location of a web user, and anonymizes that data. (more…)