Just one day after Salesforce announced the acquisition of Data Management Platform (DMP) Company Krux, Criteo has publicized its planned acquisition of HookLogic, one of the leading performance marketing service providers in the industry. In its announcement, Criteo said that the deal would be closed for a total of $250 million. And, expectedly, there is a lot of optimism about what will become of the planned acquisition.
This announcement comes as big news since HookLogic will be Criteo’s second acquisition in a matter of days, but until now many people have not heard much about the company. So, who is HookLogic and why is the company worth that much? Here is everything you need to know about Criteo’s latest acquisition.
HookLogic – A Brief History
HookLogic was founded in 2004 by Mr. Vardaan Vasisht and Mr. Jonathan Opdyke. It has its headquarters in New York City, NY. Since its foundation, the company has attracted a lot of funding to the tune of about $39 million to date: it raised about $9.5 million in its Series A round, $14 million in the Series B round, and finally $15.5 million in its latest round. It has also attracted a lot of clients, some of which are the biggest players in the digital world. Its clients include Microsoft, Intel, and Marriott.
To date, HookLogic has hired 190 full-time employees and it is projected to generate $130 million in revenue for the current year. It was also expected to gain significant ground in the market in the coming years, and there is no doubt that the merger with Criteo will only boost the projected growth.
A Brief Company Profile
The foundation of HookLogic was based on a costly shortcoming associated with online marketing and advertising; the actual return on investment for ads placed online. Although marketers place a lot of importance on ads and make great investments totaling billions of dollars, for a long time they lacked the capability to know just how effective their ads were in driving sales. HookLogic boasts of being the first platform to overcome this shortcoming. HookLogic’s innovational platform seeks to overcome this shortcoming by collecting sales attribution data from cites of which ads are placed.
This helps the company’s clients to determine which ads are popular and how much sales they are really driving. It also helps them refine their marketing campaigns by focusing on popular ads, which in turn maximizes sales force and gives a better understanding of what the customers want. What’s more, ads that are shown to be ineffective in generating sales are identified and done away with to minimize wastage of money and other resources.
Since it was founded, HookLogic has made great strides in its growth and now operates in the U.S. and Europe. It has its headquarters in New York City and has branches in Michigan, California, London, and Paris.
HookLogic under New Management
HookLogic has not only won the confidence of investors, but also caught Criteo’s eye, and the recent announcement of its acquisition by the latter proves this without a reasonable doubt. As mentioned earlier, Criteo is planning to add HookLogic to its inventory of acquisitions and is willing to pay $250 million for it. The deal is expected to be finalized by the end of the fourth-quarter when the last portion of the payment will be made. However, it is not yet clear whether the payment will include issuance of shares. Expectedly, though, HookLogic’s senior executives may retain positions as the start-up is their brainchild and, as such, they are best equipped to see the merger through.
What Criteo Stands to Gain
To understand how Criteo stands to gain from its planned acquisition of HookLogic, it is important to first understand what it is and how it operates. Criteo is one of the leading companies in the performance advertising market. The company stands out for its strict policy of value for purely post-click sales. This means that clients get value for their money by paying for only ads that drive sales rather than paying in bulk without a clue of the return on investment. Criteo has been so successful in this industry that in just over 12 years since its foundation, it has become one of the leading players with revenues exceeding $1 billion.
Coupled with HookLogic’s ability to collect information on ads that attract attention and drive sales, Criteo stands to refine its platform even further and improve its service provision. Criteo will now not only be able to offer accurate feedback on sales generated but also collect much more data and use it to maximize revenue generation for its clients as well as itself.
In addition to the integrated platform that it wishes to build with HookLogic, Criteo will add a lot of valuable clients to its portfolio if it can retain their confidence (as it most likely will considering its position in the market). Consequently, it will not only generate a lot of revenue from them but also boost its ranking and appeal among potential clients; considering that HookLogic is projected to generate about $130 million in gross profit by the end of the year, then there is no doubt that Criteo’s investment will pay off soon.
HookLogic also stands to gain substantially from its jointure with Criteo. To start with, it will have greater access to the market since Criteo is a dominant player. Additionally, the technology already produced by Criteo will help it refine its current platform and offer better services; in fact, Criteo says that it intends to integrate its ad-targeting software with HookLogic’s platform to build a better digital performance marketing platform.
Criteo, a leading force in the performance advertising market, is expected to get an even stronger foothold thanks to its planned acquisition of HookLogic. HookLogic has already proven to be an upcoming leader in the digital performance marketing industry, and its close similarities with Criteo’s services will help both companies build a refined and better platform. With a projected revenue generation of about $130 million for this year, Criteo’s acquisition of HookLogic for $250 million is expected to have great returns on investment.