The concept is simple enough. When you’re shopping online, you’re showing "intent" to purchase. And so it follows that display media placed on an ecommerce publisher’s site can guide consumers, positively affect conversions and drive awareness for hungry advertisers.
This was the premise for Florida-based Triad Retail Media way back in 2004 when CEO Greg Murtagh founded his company after years in the packaged good industry and as a digital marketer.
Today, Triad Retail counts among its clients Walmart.com (Triad’s first client), eBay and eBay Motors as well as a host of larger ecommerce publishers. Last week, the company along with its main investor, H.I.G., decided it was time to sell to investment group Rockbridge Capital, owned by Quicken Loans founder Dan Gilbert, who also owns a majority of the Cleveland Cavaliers basketball team. Read the release. Murtagh says that Rockbridge will help point Triad to a future that brings data and analytics to bear in a retailer media business that is going increasingly programmatic.
Clearly, with content, ads and commerce converging, publisher and marketer roles are becoming increasingly hard to define - and, ad technology companies and agencies stand to benefit.
According to Murtagh, his company saw a 40% growth rate in 2012 with revenue topping out at $171 million (even as a media revenue number, it’s still impressive.).
AdExchanger spoke to CEO Murtagh and COO and President Roger Berdusco about the transaction, their company’s future and industry trends.
AdExchanger: You’ve said that Triad brings “digital media to retail sites.” Does that mean standard IAB ad units or more customized approaches in advertising on e‑commerce sites?
GREG MURTAGH: The answer is both. We started out with convincing retailers that they needed to implement standard IAB sizes in order to be a relevant player and look like other publishers. We then added custom content and what we call shopper marketing, which is when a big brand starts to do something with a big retailer. They'll create a program for both brands driving the equity of the advertising brand within a specific retailer’s online store.
It has evolved into a custom approach, which has served us well.
ROGER BERDUSCO: The way a lot of our campaigns work is that it's an IAB standard ad unit that would have a call-to-action to the shopper, and then that would bring the customer to a landing page full of rich content and interactivity within the retailer's umbrella. Brands love that shoppers are spending an average of 1.5 to 2 minutes engaging in rich content once we get them there.
Is Triad Retail profitable?
GREG MURTAGH: Yes. When I started the company in 2004, we didn't take on any debt and we were profitable in the first year. We took on one round of venture capital back in 2009 with HIG Ventures out of Miami. And they came in as an equity partner here injecting venture capital. Since then, we've doubled the size of the company in 36 months.
I think that was one of the other things that attracted Rockbridge to us is that - we're not only growing the top side, and we're not “the shiny new object.” We're the real deal.
What's going to happen to you both and the whole team at Triad in light of the transaction?
GREG MURTAGH: Roger and I remain equity holders in the company. And we are absolutely staying on. The only changes to staff at the company is we're going to be hiring a lot more people over the next year or so as we grow.
ROGER BERDUSCO: We're excited, too, about our growth plan. As Greg mentioned, we've doubled the company over the last three years; our plan is to do that again in the next three years, and we have a lot of confidence and conviction that that's very achievable, especially now with the new relationship with Rockbridge.
And were you guys able to take some money off the table with the Rockbridge transaction?
GREG MURTAGH: Yes.
Industry-wide, where would you say we are in e‑commerce publisher adoption of a media strategy?
GREG MURTAGH: The companies that we work with are early adopters, especially Wal‑Mart, because Wal‑Mart saw this opportunity to reach their shoppers with branded advertising and relevant content way back in 2005. Over the years, they've evolved in a big way as well with the marketplace, to the point where today they have all the different opportunities for brands to tie in with them - from display to custom content to video to promotional incentives to social to mobile. Other clients are at different stages of evolution - good stages - and every year that goes by, they can increasingly see the value of doing what we're talking about.
But, there's a whole set of really big retailers that aren't there. They quite frankly are missing the boat, because of all the people who come to e‑commerce sites, at least 96 or 97% don't buy anything – so, an average conversion rate for a big e‑commerce retailer is in the 3 to 4% range.
By adding a good, relevant, and contextual monetization program to their site, they are taking advantage of that traffic and monetizing as they should. But, a lot of retailers who aren't doing it today are looking at ad networks as their yardstick. And they're saying, "Why would I want to put ad network ads all over my site?" And they're right, they shouldn't. But they're not taking the next step, either, which is, "Well, is there a way that I can do it differently?”
I think what you'll find is over the next two years or so a lot more big retailers who aren't doing advertising programs, will start to do it. Because as we say, "Content drives commerce.”
Has programmatic buying affected your business at all?
ROGER BERDUSCO: Yes, it's becoming more and more part of our business – it’s a positive development, especially for our large retailer partners as we look to creatively bundle that inventory into packages for our advertisers. So, yes, we're building out our capability there, and we see that as becoming increasingly part of the mix. It’s not an either-or.
Of course you're familiar with the “retargeting” tactic that companies like Criteo, TellApart and eBay’s Fetchback, among many, have been pursuing. Is retargeting something Triad will get into?
ROGER BERDUSCO: We do some today, but we’re looking to do more in the future for sure, because that’s in an advertiser’s interest. The quality of the data that we have across all of our sites is compelling and our advertisers are looking for more creative ways to leverage that data both on our retailer sites and then off the sites as well.
Can you give me a sense of the client on the advertiser side? Who are they? Are they agencies? Are they direct marketers? Is it trade budgets? You tell me.
GREG MURTAGH: That's a million dollar question, right there. One of the core principles of retail media is that the funding for the advertising comes from advertising budgets, not from trade, not from co‑ops. Trade and co‑op budgets are the venue of merchants within the retailer. Where we play is in the national media sales strategies. The people who we deal with are all the national media agencies such as MediaVest, OMD, Digitas, et cetera.
We also work closely with individuals called shopper marketing specialists, for each of the big brand companies. These are separate divisions within the advertisers, whether it’s a Procter & Gamble or any other big advertiser – where there are people whose job it is to do specific equity‑building, marketing programs and media programs for retail departments. Whereas, the media agency is charged with the efficient and effective study of national media dollars.
Industry-wise, what about the brand view on advertising on retailer sites? Has it evolved?
GREG MURTAGH: The whole notion of brands advertising on retailer sites is still relatively new, especially to the major media agencies.
That's been a big part of our mission over the last couple of years - evangelizing the opportunity. We talk internally that every digital media plan should have a retail media component on that plan. That's our goal - make sure that every media planner is thinking, as they put the plan together, "This is retail. I've got to reach the shopper when she's in the shopping mindset." That's where we play.