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EXCLUSIVE: HookLogic Launches Retail Search Exchange, RTB for Retail

Written on
Mar 26, 2013 
Author
Richard L. Tso  |

ADOTAS – Google recently announced that its product listing ads (PLAs) are now viewable on smartphones in all markets, given that the ad campaigns are upgraded to “enhanced” on the platform. PLAs are a popular advertising format for retailers and brands, offering them a prominent and seamless way to showcase their products. According to Google’s Commerce Blog, “When a user enters a shopping-related search, a commercial format that displays products in a single unit may appear above organic search results. This ad unit is labeled as a ‘Sponsored’ and displays rich product images, prices, retailers, and more.”

Although Google seems like one of the only providers of this type of search-based product advertising, one company called HookLogic has already been doing this form of shopper advertising for some time. HookLogic recently launched its Retail Search Exchange to fuel paid search ads on retail sites. This operates similarly to an ad exchange that allows brands to bid on “sponsored” top placements across a network of eCommerce sites.

Many of the brands on the exchange are quickly moving PLA dollars over to product ads on retail websites. HookLogic was created for retailers to tap into a whole new revenue stream. The Retail Search Exchange is a cost-per-click auction marketplace that enables brands to win the top placement in the search results of a growing network of eCommerce websites including BabyAge, Rakuten.com Shopping, and the largest baby and toy retailer online.

Brands and their media agencies log in to the Retail Search Exchange to bid on relevant search and sort placements across the entire network. The user interface enables them to add funds, select the products they wish to advertise, and then set maximum bids they are willing to pay for clicks on their products.

“Our algorithms and machine learning take it from there by automatically optimizing every campaign for the highest ad relevance and performance,” stated Steve Elson, VP of Search Media at HookLogic. “Brand ads are only shown on the retail sites they sell on; therefore, everything clicks-in to the site, just as clicking on any organic search result would do. Advertisers are then able to see their advertising dollars working through clear insights reporting that show clicks, page views, and actual sales attributed to their ads, enabling a real-time view of return on ad spend.”

Benefits of Retail Search Exchanges for Brand Advertisers

  • Retail Search Exchange represents an accountable, measurable way for brands to increase their share of voice and drive market share. For example, brands whose products don’t appear on the first page of search results can now bid their way to the top of the first page of results – driving new exposure and sales.  And brands whose products typically do gain first page position can bid to “defend” their category leadership and use the Retail Search Exchange to promote specific products, achieving a measure of control over which products are featured to shoppers.
  • The placements that retailers assign to the program are only available through Retail Search Exchange, so even if a brand already has significant exposure in search results, Retail Search Exchange represents incremental exposure.
  • Retail Search Exchange drives results. Right now we’re seeing Return On Ad Spend (ROAS) ranging from 300% to over 1000%, with large shifts in market share for advertised products.
  • Participation is easy; there is no ad creative or keyword research needed, unlike other advertising or search marketing campaigns.
  • Retail Search Exchange provides a better way to spend search dollars. For example, a stroller brand can place bids within the stroller category of the Retail Search Exchange for a much lower price than bidding on the keyword ‘stroller’ through Google – with the added benefit of a buy button right next to their ad.

RTB for Retail

Retail Search Exchange takes the retail environment and puts it up for auction. It basically shifts the focus, power, and efficiency of programmatic buying and aims it directly at active shoppers. It’s kind of like how brands compete for better, wider, and more visible shelf space in physical stores, only now they compete in a real-time auction where the shelf can change second by second for each individual shopper.

“Google’s PLA program was primarily used by the direct sellers of products like retailers and brands that operate their own eCommerce storefront,” said Elson.  “Most brands sell the majority of their products through 3rd-party retailers, so Google PLAs are not actually that useful for them.  And if a brand does operate its own eCommerce store, they have to compete against their retail channels that are also buying Google PLAs. HookLogic’s Retail Search Exchange is actually a different and parallel marketplace where brands compete with one another for placement within retail stores, with the added advantage that shoppers are already one step closer to the shopping cart.”

According to eMarketer, product research now begins on retail websites over search engines like Google, making this offering extremely attractive to brand advertisers.

The future is a ubiquitous platform for brands to connect with shoppers in the act of shopping. Most advertising technology relies on historical proxy data to predict who may be an in-market shopper. HookLogic is bringing marketing to the moment of truth, the time and place where decisions are actually being made.

“The market is heading towards universal accountability, as brands are demanding real performance measurements for their marketing spend,” Elson added. “One of the reasons brand dollars have been slower to move online than direct marketing dollars is that it has been hard for brands to measure performance because their products are often sold by third parties. With platforms like the Retail Search Exchange, a performance marketing layer is appearing for brand marketers that will help draw new marketing budgets online.”





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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