A true epoch of ad tech has passed<\/p>\n\n\n\n
Criteo\u2019s retargeting revenue was less than half the company\u2019s total earnings in Q3, a first for Criteo, CEO Megan Clarken told investors during the company\u2019s earnings call on Thursday.<\/p>\n\n\n\n
Criteo\u2019s net profit ticked up a smidge \u2013 from $6.5 million in Q3 2022 to $6.6 million last quarter \u2013 and headcount is down 1%.<\/p>\n\n\n\n
But the market doesn\u2019t appear to care about Criteo\u2019s retargeting-related milestone. Shares were down more than 10% after the company reported its numbers. That\u2019s because Criteo\u2019s retail media and IPONWEB businesses are passing retargeting as it\u2019s on the way down, having decreased 7% in a year.<\/p>\n\n\n\n
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The new pitch<\/strong><\/p>\n\n\n\n Criteo has been reframing its business away from retargeting for the better part of a decade.<\/p>\n\n\n\n In 2017, after The Trade Desk went public, Criteo pushed to be seen as a DSP. It was mar tech after that, followed more recently by a pivot to commerce media.<\/p>\n\n\n\n But Clarken elaborated on some of Criteo\u2019s differentiators in the commerce advertising market.<\/p>\n\n\n\n For one thing, in an overcrowded field of retail media solutions, Criteo is an established name and often considered a key partner for the open web. For instance, Clarken cited Criteo\u2019s integration with Shopify Plus, where it\u2019s the only open internet advertising partner alongside Google, Meta, Pinterest, Snap and TikTok.<\/p>\n\n\n\n Then there\u2019s Criteo\u2019s core ad tech edge. Its identity graph, according to Clarken, has more hashed emails than any other alternative ID provider. These hashed emails (Criteo calls them HEMs, but who needs another acronym?) are the \u201cinteroperable match keys\u201d that will pay off most \u201conce the industry moves beyond third-party signals.\u201d<\/p>\n\n\n\n Criteo is also the largest and most committed name aside from Google Ads that\u2019s working with Chrome to test the new Privacy Sandbox advertising and measurement APIs.<\/p>\n\n\n\n The pushback<\/strong><\/p>\n\n\n\n One reason investors are nonplussed by the subordination of Criteo\u2019s retargeting revenue is that it\u2019s a more profitable type of revenue for the business.<\/p>\n\n\n\n Criteo\u2019s gains in retail media \u2013 and, particularly, with the largest retailers \u2013 tend to be more SaaS-type tech licensing agreements that are based on mostly fixed rates. And Commerce Max, Criteo\u2019s retail media DSP product, which launched publicly in September, is self-service, so the take rate is smaller there, too.<\/p>\n\n\n\n Criteo is \u201cevolving our pricing models,\u201d Clarken said, to meet the needs (which is to say, the demands) of new, large retailer clients.<\/p>\n\n\n\n Those large retailer clients may help secure Criteo\u2019s footprint in the commerce category, but they aren\u2019t willing to give up a percentage share of growth in a space with so much potential. To avoid sharing a growing portion of their ad businesses, the big chains can insist Criteo take a fixed rate, with preset incentives to reach certain growth numbers.<\/p>\n\n\n\n \u201cThese are the things that we\u2019re working through as we\u2019re relatively early in the stage of building up this marketplace,\u201d Clarken said.<\/p>\n\n\n\n Another sticking point is that, while Criteo\u2019s leadership in terms of Chrome Privacy Sandbox product development is one of the company\u2019s three main pillars for short-term growth, that investment is also a risk.\u201cFrankly, we wanted to make sure we were transparent with all of you as we go along this journey,\u201d Criteo CFO Sarah Glickman told investors in reference to why the company wasn\u2019t providing specific guidance for 2024, other than to say it\u2019s lowering growth ambitions for next year.<\/p>\n\n\n\n \u201cThe uncertainty includes Privacy Sandbox,\u201d Glickman said, since it\u2019s unclear how the products will fare as third-party cookie deprecation rolls out to general Chrome users beginning next year (not to mention that Google has delayed the deadline twice). We\u2019re now more than a year past the original deadline for third-party cookie removal, and Criteo hasn\u2019t been rewarded for its continued investment in the product toolkit, since third-party cookies are still abundant.<\/p>\n\n\n\n The dynamic is not unlike how an athlete trains every day, even twice a day for years on end, to achieve something that may \u2013 or even may not \u2013 happen years and years later, Clarken told investors.<\/p>\n\n\n\n That\u2019s something Clarken knows; she was a seemingly surefire Olympics-bound track-and-field athlete from New Zealand before a knee injury sent her on a different career path (i.e., becoming a media exec).<\/p>\n\n\n\n The same goes for the Privacy Sandbox, she said. \u201cAnd it\u2019s the same story with our positioning as the ad tech provider for commerce media. It is eye on the prize.\u201d<\/p>\n\n\n\n Source: <\/em>https:\/\/www.adexchanger.com\/marketers\/criteo-is-finally-not-a-retargeting-company-anymore\/<\/p>\n","protected":false},"excerpt":{"rendered":" A true epoch of ad tech has passed Criteo\u2019s retargeting revenue was less than half the company\u2019s total earnings in Q3, a first for Criteo, CEO Megan Clarken told investors during the company\u2019s earnings call on Thursday. Criteo\u2019s net profit ticked up a smidge \u2013 from $6.5 million in Q3 2022 to $6.6 million last […]<\/p>\n","protected":false},"author":11,"featured_media":5073,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"_links":{"self":[{"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/posts\/5071"}],"collection":[{"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/comments?post=5071"}],"version-history":[{"count":3,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/posts\/5071\/revisions"}],"predecessor-version":[{"id":5105,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/posts\/5071\/revisions\/5105"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/media\/5073"}],"wp:attachment":[{"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/media?parent=5071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/categories?post=5071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/s1.agency\/wp-json\/wp\/v2\/tags?post=5071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}