Building a Silicon Valley Style Company from Australia: ROKT CEO Bruce Buchanan (Part 3)

Sramana: Can you give me a use case for your product?

Bruce Buchanan: Let’s assume you are on eBay and you have done a transaction. We will present you with what we call an engagement asset which is past the transaction. Typically, it is something that the business partner is trying to promote. It could be as simple as inviting the user to sign up for an eBay Rewards account and if they do, they will get a special discount on their next purchase. It is a value add for the consumer and they have to opt in to engage that merchant. We use that opportunity to present them two or three other relevant offers.

Sramana: So the deal would need to start with eBay?

Bruce Buchanan: It is all on eBay. We offer an upsell, cross-sell, and personalization tool for the partner. It is also an ad network with a very unique inventory that sits in the transactional environment as well.

Sramana: Are you authorized to place third party transactions in that transaction stream?

Bruce Buchanan: Yes. That is the unique thing. We get access to the information in that transaction stream and use that to present both internal offers as well as third party offers.

Sramana: Which translates into revenue sharing with the transactional stream?

Bruce Buchanan: Yes. It is a very transparent offering.

Sramana: That is a very interesting idea.

Bruce Buchanan: We are one of the few businesses that sits behind the firewalls of businesses like eBay, Groupon, and other major transactional players. We are embedded in all the major transactional engines in Australia.

Sramana: Are you only working in Australia?

Bruce Buchanan: No, we expanded last year to Singapore and New Zealand. We opened our New York office in January of this year and in March, we started our US platform. Over the past month, we have started to launch with partners over here.

Sramana: Who are some of the major commerce players you are doing this for?

Bruce Buchanan: One of our biggest partners is eBay. They are obviously a significant player. We work with eBay in Australia and we just started working with them in Singapore. We will launch with them in the US within the next 8 months.

Sramana: How large is the transaction volume you are dealing with?

Bruce Buchanan: We deal with 10 million transactions a month overall in our company. We work with daily deal and flash sites in addition to sites like eBay. We also work with a lot of the travel and airline sites. We work with OTAs and Airlines. We also work with real estate, cinema, ticketing sites, and automotive sites.

Sramana: If you were to break down the economics of the business, how much upsell or cross-sell activity does each transaction generate?

Bruce Buchanan: It varies by partner. Typically, we can generate effective CPM revenue for our partners in the range of $500. Compared to the alternatives such as display, the revenue performance is dramatic. We can generate considerable benefits in other ways. We can improve take-up rates for products they are already selling by 10% to 20%. Operating our system at the lowest level, just to optimize creative, can be a very powerful thing. Most e-commerce experiences are vanilla and set. If you can optimize creative just for the gender, you will see improvement in take-up rates.

An example would be an airline selling travel insurance. That is a key revenue driver. Airlines typically loose revenue on the airfares. Having run an airline for many years, I can tell you that they are not terribly profitable. The secret to success is making the add-ons such as insurance, car rentals, hotels, and everything else a successful transaction. If you can improve take-up rates by 20% on travel insurance, you can have a tremendous impact on the overall profitability of an airline.

This segment is part 3 in the series : Building a Silicon Valley Style Company from Australia: ROKT CEO Bruce Buchanan
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