Jonathan Opdyke is CEO of HookLogic, an eCommerce media company.
AdExchanger.com: Please share a bit of background on you. And, what inspired HookLogic?
JO: The co-founders and I met during the dot-com boom at Beyond Interactive, one of the first digital advertising agencies, now part of Mediacom/WPP. As an Industrial Engineer with a strong background in statistics, I quickly developed a passion for the measurability of digital advertising – that every action and reaction could be tracked and optimized.
The initial inspiration for HookLogic came from probing the question of how to influence the decision point, the moment of truth when a shopper crosses the line to becoming a buyer. Online shoppers behave differently than offline shoppers, fluidly bouncing from product to product and store to store to inform and narrow their decision set. How could a retailer or brand apply the right “hooks” near that decision point to ultimately win the customer? The concept developed into placing a value on and effectively monetizing that decision point.
What problem is HookLogic solving?
Every visitor to an e-commerce site is a valuable shopper, actively considering a purchase. Yet most retail sites only derive revenue from the small portion of shoppers (typically under 5%) who actually make a purchase. HookLogic helps retailers generate revenue from 100% of visitors by introducing a new source of revenue from media.
At one level, this is a no-brainer – marketers love to reach in-market consumers and retailers have lots of un-monetized media inventory. But retailers recognize they could be taking a significant risk – both to their conversion rate and customer experience. The key challenge we solve every day at HookLogic is creating media programs that protect – and even enhance – a retailer’s core transactional business.
Who's in the competitive set? -how will you differentiate your company?
At a high level, we compete with companies that create media programs for online retailers. Some companies offering related services include Triad Retail Media, RichRelevance, and DijiPOP.
For retailers, HookLogic provides a comprehensive approach to e-commerce media. We help retailers to define their strategy, implement media products, and sell those media products to advertisers. Our approach includes both enabling retailers to create their own in-house products to leverage vendor co-op budgets and providing turn-key products to attract external advertising budgets. Our technology platform is the most advanced media management system for the e-commerce space, combining the functionality of a publisher-side ad server with advanced merchandising functionality designed to promote conversion. Rather than offering a single one-size-fits-all model, we tailor the right approach for each retailer – with solutions ranging from IAB standard display banners linking to dynamically-generated on-site landing pages to pay-per-click auctions for featured product placement. Through our close relationships with major ad agencies we’re able to build the profile of our retailer partners as media properties and access budgets of both endemic (vendor brands) and synergistic non-endemic advertisers, such as financial services providers and entertainment companies.
For advertisers, HookLogic provides highly targeted opportunities to reach in-market shoppers in the context of shopping. By working closely with retailers, we’re able to make available previously unattainable media inventory near the consumer decision point. Our solutions often go “beyond the banner” to create highly integrated sponsorships and promotions that yield exceptional response rates and brand recall. Our solutions are fundamentally focused on relevance to the consumer to yield performance for both the retailer and advertiser. For endemic advertisers, we even measure the direct effect an advertisement has on transactions within that retail site.
How does pricing work for your clients?
We primarily operate on a revenue share / commission model based on the volume of media sales.
What are your thoughts about how audience-based buying uniquely fits into your model?
At a fundamental level, one of the reasons an e-commerce site is so valuable to endemic advertisers is that it already represents a highly concentrated audience of consumers actively shopping for their products. In other words, our context is one of the best defined audiences a marketer could hope to reach.
At a broader level, shoppers generate an immense amount of behavioral data as they browse and buy different types of products at retailers. This data can be of immense value to audience-based buyers seeking in-market consumers, as well as other attributes such as specific brand preferences or products already owned.
What types of data sets do you use or offer to your clients for targeting?
At a base level, we start by structuring media placements around the taxonomy of a retail site, to enable contextual targeting of categories and product sets. We then build out a cookie-based targeting set that typically combines user behaviors (categories, brands, products shopped and bought) with retailer profile data (user preferences and attributes, purchase history, segmentation, etc.). We intentionally do not collect or use personally identifiable information for targeting purposes.
How do you handle creative?
When possible we seek to automate creative production using templates that are dynamically populated by product and brand content. This approach is especially effective for endemic product ads (e.g. featured products at the top of a sort list) and for landing pages for on-site linking banner campaigns. The HookLogic platform also includes a configurable creative builder for easily creating appropriately sized banners based on the retail site style sheet and aesthetic.
Our platform also excels at creating integrated promotional programs where a brand’s offer is messaged in various places throughout the shopping path, generally indistinguishable from typical merchandising. An example of this may be a gift with purchase sponsored by an advertiser, where the offer and sponsor are called out during the shopping and checkout process.
When richer brand content is called for, we typically use or re-purpose agency-provided creative or work with agencies to determine an effective approach that maintains a positive experience for our retail partners’ customers.
Is the company self-funded? Any plans for venture or strategic investment?
Aside from early seed capital from friends and family, we’re entirely self-funded. We don’t have any immediate plans to accept outside capital.
How do you scale the opportunity and performance for a company like Shoebuy (see release)? Is it all about cookie-based retargeting?
The core of the e-commerce media opportunity lies in effectively monetizing the site traffic a retailer already attracts, particularly around the categories and products that shoppers are browsing. While re-targeting is valuable, we find that context is the most valuable form of targeting. Few retailers have many paid media placements available on their sites, so the contextual opportunity is rarely scaled. We typically start by working with the retailer to design and test media products that fit into their sites and attract different types of media budgets. Often this means rolling out initial media products, then layering in additional products to further grow the program. We do develop cookie-based shopper profiles to enable more granular targeting for advertisers, to optimize performance-oriented programs, and to broaden the inventory beyond context.
Looking out one year from now, what milestones would you like HookLogic to achieve?
Our goal is for HookLogic to be the undisputed leader in e-commerce media. That means growing our base of retail and brand partners by providing exceptional new revenue generation for our retail partners and achieving strong return on advertising spend for our brand partners.