Today one of our portfolio companies, LinkSmart, has come out of stealth mode and unveiled its product, Total Link Management and $4.7M in financing led by Foundry Group. My partner Seth Levine sits on the board and wrote about his view of LinkSmart. The investment was an obvious one for us as it fits squarely in our Adhesive theme given the deep relationships LinkSmart has with big media and web platforms as a provider of analytics and traffic management software.

Even though the Internet and web has evolved since the mid-1990s, the most prolific web properties on the Internet all generally follow the same process: advertiser relationships are created with a publisher. This publisher then runs a never-ending fire drill with their sales, SEO and yield management teams to fulfill those obligations with their advertisers. More ad units are inserted on pages, marginally better eCPMs negotiated for, but yet the profit margins continually come under pressure as publishers scramble to generate even more traffic to support the advertising expectations.

LinkSmart has built a system that fixes part of this challenge. The technology LinkSmart’s founder Pete Sheinbaum and his team have assembled is analogous to many of the solutions we’ve seen and invested in for search engine optimization (SEO) such as SEOMoz. However, while SEO directs visitors from the open web — via search engine results — to a publisher’s site, LinkSmart takes those same readers and provides the publisher team with the means to use hyperlinks to more deeply engage the visitors, keep them on site longer, or send them to the properties the publisher wants them to visit.

If it costs a dollar to bring a reader to a site and they bail after the first page, that’s a dollar not optimized or even wasted. If that same dollar is spent and LinkSmart moves the reader three pages deeper on the site, triggering more revenue or visits to affiliate or partner site, the cost per acquisition has dropped dramatically and in many cases will improve the RPM geometrically.

Beyond the link optimization, there’s an enormous amount of valuable data generated by LinkSmart’s system. The data answers questions such as what are readers clicking on? What is their path while on site? What is the optimal number of links 100 words of written content should have to guarantee highest click-engagement? How many readers are leaving your site in a single click and where are they going? LinkSmart helps a publisher look deeply at that data to surface many things including the real-time intent of a reader when on-site.

We are psyched about what LinkSmart is launching today. If you are a publisher, check it out — it’s just the tip of the iceberg.