When it comes to online product advertising, retailers are typically constrained to several channels: marketplaces, comparison shopping engines, paid text ads, Pinterest, etc. However, the reality is that instead of starting searches on Google, Bing, or Amazon, many shoppers start their research on the websites of big retailers like Walmart, Target, Newegg, or Sears.
HookLogic has added another dimension to product advertising with the introduction of its proprietary retail search exchange, which allows brands to advertise their products directly on the websites of major retailers.
We caught up with HookLogic’s CEO Jonathan Opdyke to discuss how retailers can take advantage of “paid search on retail sites.”
Describe HookLogic in 50 words or less.
Jonathan: HookLogic is a unique performance marketing platform that drives sales for product brands, marketplace sellers, hotels, and auto dealers. By partnering with the world’s leading retailers, travel agencies, and automotive companies we’re able to offer high-performance, native search advertising with a full view into sales attribution.
What does the process look like once an advertiser gets the ball rolling with HookLogic?
Jonathan: Take a product brand as an example, say LEGO. Their marketing department or their search agency can log into our Retail Search Exchange, deposit funds, and go to a bidding screen that is pre-loaded with all of the products they sell online across various retail channels. If they place a bid on Star Wars Lego products, those products immediately move to the top of relevant product search results on major retailers like Target and Walmart, ahead of competitors. It’s as if the brand took over a large area of the shelf in a physical store.
So if a shopper searches for the word “Star Wars” on a retailer site, the first products they see are LEGO Star Wars products, shown as a sponsored or featured listing. Plus, Lego only pays when the shopper clicks on its products. It’s like Google’s Product Listing Ads, except those are designed to drive traffic for retailers whereas our ads are designed to drive traffic for product brands within retailers. The beauty is that we have the ability to see all purchases that are driven by the advertising, meaning we can tell a brand they spent $1,000 and saw $10,000 in sales as a result. Brands that rely on retail channels to distribute their product never see that kind of performance data. Here it is in action on Target’s site below:
What are some ecommerce trends that you’re particularly excited about?
Jonathan: From our own perspective, we feel that the idea of including advertising in an ecommerce site has finally become mainstream. Everyone from Amazon and eBay to Walmart, Target, and Expedia serves advertising on their sites. Most retailers now have a dedicated team focused on media monetization.
That has opened up a huge new opportunity for brands to take advantage of the performance that bottom of funnel advertising can drive. It has also expanded the business model and profitability of some of the highest traffic sites on the internet that previously only made money from the 3 to 5% of traffic that converted.
In general, I think real-time bidding has been a game changer in leveling the playing field among publishers and turning display advertising into a performance medium for ecommerce. Those with the best data and most valuable audiences can now take greater advantage of them. This bodes well for companies like HookLogic that have access to unique data sets to make smarter decisions and measure performance.
What 3-4 advertising channels do you recommend product brands check out to drive ecommerce sales of their products?
1. Amazon. I’d put us first but that would seem too self-serving. Amazon is the undisputed king of ecommerce and brands should be working with Amazon as a media property.
2. HookLogic. I like to think of us as the performance marketing channel to reach in-market shoppers everywhere else besides Amazon. Our exchange approach has enabled us to partner with the widest array of leading ecommerce sites in the industry.
3. Triad Retail Media. Triad is the largest seller of display advertising and customized creative solutions in the retail space. Their programs are less performance-oriented, but they are able to provide a rich branding experience, particularly for larger brands.
4. Google Product Listing Ads. Google offers a great tool for shoppers to find the best store to buy a product from. But I only recommend heavy investment from a product brand if it maintains its own store that actively competes against channels, for example Levis.com or HP.com. Otherwise, the brand is better off competing against other brands through Amazon or HookLogic.
What do typical results look like for an advertiser and in what timeframe?
Jonathan: Our goals are to drive sales and increase market share for the brands that advertise with us. We’re usually able to achieve sales increases with a strong return on ad spend (ROAS) in a matter of a few days to a couple weeks. Durable goods brands that go all-in with uncapped budgets and their full product assortment will often see product lines sell out much faster with a strong ROAS in the 5x to 15x range.
Consumer packaged goods, on the other hand, typically see a lower ROAS on initial purchase, but are happy because their goal is to win a customer and establish repeat purchases with a high lifetime value.
To learn more about advertising in the Retail Search Exchange, visit HookLogic.com.
Jonathan co-founded HookLogic in 2004 on the idea that marketing closer to consumer decision points would not only be more effective for marketers, but also more useful for consumers. Under his leadership, HookLogic has grown from a boot-strap start-up to a global enterprise powering integrated, native advertising and promotional programs across many of the internet’s most recognized ecommerce sites.
In earlier roles, Jonathan led internet strategy for Xerox Corporation and international operations for online ad pioneer, Beyond Interactive. He holds Masters and Bachelors degrees in Industrial and Operations Engineering from the University of Michigan Tauber Institute for Global Operations.