When HookLogic announced in June that it would extend its platform by allowing advertisers to bid on product listing ads running on Google's and Bing's shopping platform and through an unnamed retargeting platform, few would have thought that platform -- which turned out to be Criteo -- would eventually acquire the company.
Criteo has been slowing teasing information about a site search strategy for years. In June, equity analysts began asking Criteo CEO Eric Eichmann for more details around its search strategy. Some thought Criteo would become the M&A target -- especially after the company's first-quarter 2016 earnings call in May, where Eichmann spoke about working on a "proof of concept" -- but that he expected to release more information later this year.
That information came Tuesday with the news that for $250 million in cash and $377 million on the balance sheet, Criteo would acquire HookLogic -- which, with its latest technology, acts as a real-time bidding ad exchange, where brands like L'Oreal, Kraft and Coca-Cola bid on Sponsored Product ads on sites such as Macys.com, Walmart.com and Sears.com.
"The combination of the engineering and data resources of the two teams should help augment existing products and innovate on new products over the coming years," wrote Raymond James Equity Analysts Justin Patterson and Aaron Kessler in a research note published Tuesday.
During the call with analysts and investors, Eichmann said it would take four-to-six quarters to integrate R&D teams and move into "a good position" to start delivering" on the benefits of integrating technologies and teams.
HookLogic allows Criteo to enter new markets for performance marketing and brand manufacturers. "Criteo’s core business significantly broadens Hooklogic’s base of retailer partners for the mutual benefit of brand manufacturers and retailers alike," Eichmann said in prepared statement.
HookLogic also brings an expertise in predictive bidding and product recommendation, which allows Criteo to build on existing products and performance.
RBC Capital Markets Equity Analysts Andrew Bruckner and Dylan Haber believe this deal makes strategic sense. "We continue to view CRTO as creating one of the largest cross-device advertising mouse-traps, which would complement advertisers’ ability to measure performance outside of FB & GOOG," they wrote in a research note published Tuesday.
While programmatic became a focus for HookLogic CEO Jonathan Opdyke early on, during a Q&A published in MediaPost last June the topic turned to how ecommerce continues to change the consumer products goods sector and how search fits in.
Opdyke offered up insight into how ecommerce continues to change the consumer product goods sector and how site search fits in.
While Opdyke delved into a variety of topics related to taking CPG brand products direct, one of the more interesting points covered was merchandising. The ability to create online product content and imagery that leads to complex questions like "whether to display the product in or out of the standard store packaging, in prepared versus raw form, or standalone versus being consumed by a satisfied customer," per Opdyke.
With the acquisition of HookLogic, Criteo gains a different type of thinking that helps the industry move past traditional Web site sales into online merchandising and true ecommerce.