The Open Platform & The Big Opportunity

It has been a good year for the global technology company, Criteo. Just in numbers, in its Q3 2021 earnings report, Criteo’s media spend activated by the commerce media platform for marketers and media owners was over $2.5 billion in the last 12 months and close to $615 million in Q3 growing 23 per cent. It delivered the highest growth in its new solutions in four quarters at 66 per cent year-over-year, now representing 28 per cent of total revenue (ex-TAC). The retail media revenue, on similar terms, grew 65 per cent year-over-year.

“We achieved yet another strong quarter of double-digit growth, driven by the acceleration of our new solutions and healthy performance in retargeting,” comments Megan Clarken, the Chief Executive Officer of the company, adding. “As a global powerhouse in commerce media, we are focused on delivering the best performing commerce audiences at scale for our large and growing base of 22,000 marketer and brand customers across the open internet. The sustained momentum in our company transformation and solid execution of our commerce media platform strategy positions us well to drive long-term sustainable growth and shareholder value.”

Clarken, who joined the company just ahead of the 2020 pandemic, can be credited with some radical changes in Criteo’s positioning and product strategy that has led to its comeback. 

The Right Data Strategy

A major boost that did come for most players in the sector was the rise of ecommerce itself. However, Criteo’s focus on connected commerce, and the positioning of ‘commerce media platform’, builds more on its access to first-party data. Explaining the advantage here, Clarken says, “This is the data we collect from our clients. On one side of our business, we have access to 21,000 marketers and on the other side of our business, we have more than 5000 media companies, and access to their data as well.”

At the centre sits Criteo’s proprietary technology and expertise that allows it to take these datasets and connect them, creating intelligence commerce data from it. “We then use it to fuel the ability for marketers to get to the right people, at the right time, on the right platforms and right devices. This is what we do. We have access to data like shopping behaviour, or websites that they like to go and so on. Our ability to put these things together is much more sophisticated and precise and this differentiates us from everybody else,” Clarken elaborates. 

Therefore, in the past, Criteo was about just retargeting but now it can do offer broader targeting capabilities across many different platforms. Clarken believes this is an important reason why the company continues to find relevance in an otherwise cluttered ecosystem. And she cites the phasing out of third-party cookies as a reason why this specific point becomes critical.

“The reason why this is important now is that with third-party cookies are going away. Marketers will grapple with how to address the right people when there is no access to third-party cookies. And, first-party data, which is what we have, is hence queen. This ability means we can move past the world of third-party using first-party data and go to the source. This is to say we have permission from people to use their data to make sure that what they see is relevant to them and creates the right experience,” Clarken informs. 

As customer experience becomes the key battlefield for companies, and changes in the digital landscape pursue, marketers will have to lean on adtech providers to navigate the changes. Clarken believes this exactly is the opportunity for platforms such as hers to connect the dots in the bigger picture.  

A New Criteo

Earlier this year, the tech company supported its new positioning and product stack with a fresh brand identity, its first overhaul since inception. The new logo aims to capture the present ethos of the company but as per Clarken, the timing also aptly marks the company’s growth and continued transformational phase. 

“We have gone beyond the legacy retargeting company to a platform that utilises all of our assets to make a larger difference. We stand for something different and we speak a different language now. The way we engage and look after our clients is different; the products we offer are different. There is a boldness to the way we stand up for our principles of openness, transparency, supporting the open internet, creating optionality for marketers, opportunities for media and people. And so, we changed the logo we had for 15 years. Our new identity reflects who the new Criteo is and we love it. It was exactly the right time to come forward and make a statement, which was why we did it this year,” Clarken remarks. 

The sectoral growth globally too allowed for the right timing for Criteo’s new product strategy to be more relevant. Reflecting on the sector’s growth, Clarken says, “It was seamless and fantastic that it went in that direction. Ecommerce is growing at 24 per cent globally, excluding the China market, and it will continue to keep growing.”

The ecommerce boost was predominantly fuelled by the pandemic but it is a behaviour pattern that is unlikely to reverse. Clarken points out that Criteo already had relationships with retailers, marketers and media owners. For the company, it was about building the moat around the assets that it had. “There is nobody else in this space. Amazon advertising is there, but they don’t service the open internet. We are the best-placed to service the open internet. We are not a retailer ourselves, we’re no threat to anybody and we produce the services that enable a thriving ecommerce marketplace outside of the walled gardens. It has become a natural progression for us. That being said, we have done a lot of work to identify it. This certainly is well and truly the right place for us to go.”

It is evident that moving forward, marketers will have to rely on first-party data in the next normal, which is why Clarken emphasize it as the queen. She says, “We have access to it. More importantly, we feel like protectors of the open internet. We want to make sure that open internet remains a healthy, vibrant place for consumers. It’s critical beyond belief. The phasing out of third-party cookies has many implications on the publishers and marketers on the open internet.”

The Open Internet

As uncertainties rise in the digital ecosystem, especially in context to new rules or regulations –– India, for example, too saw the final report on the Data Protection Bill in November 2021 that is expected to impact across sectors given that India is the largest open internet market in the world with nearly 800 million internet users –– and the likes, the all-important question is how will consumer experience change. 

Clarken cautions that it can go “either away”. “If cookies go away and nobody is ready, then it can even take a turn for the worse because the consumer experience will be terrible. The future of the open internet is very questionable. Let’s assume all is in place and everyone is ready for the new order, ultimately, the digital environment is one where people have access to choice, and their experience can only get better over time as technology gets better and as we learn more about what consumers like and don't,” she observes.

Some may be in a panic mode but ecommerce will play a bigger part in people’s lives, according to Clarken. Eventually, adtech companies and marketers will get better at understanding the consumer and making sure that the right choices are made about what is served to them both from an ecommerce and media owners’ perspective, and how adtech services consumers. This is a result of technological evolution over time. 

“Using first-party consented data and applying AI technologies across it will help us learn, and we will be at a place, where the experience is not disruptive or pervasive to the consumer. We will create experiences that they feel is theirs and belong to them,” Clarken says, adding, “It would also be done in such a way that people don't feel threatened by the use of their data. All of this is possible. We see consumers listening to Alexa and Google Home. It is because it works and it feels safe in that environment. This spills up to the open internet.”

Way Forward

Clarken’s pursuit is broad when on the industry but focussed when it comes to Criteo. Her future agenda continues to ensure staying on a growth trajectory. She says, “We have created a strategy where we see an opportunity, which is the commerce media platform, and the commerce on the open internet. This means we have to get everything lined up to move from a retargeting business to a commerce media platform business be that technology or people or our clients. Growth for us is about making our numbers and putting in place what we need to do to execute against the commerce media platform strategy.”

The second priority is execution. She sums up, “We are in transformation mode, we've got to get things done, and the third point is around our laser focus on first-party network, which puts us in the driver's seat for our business in the changing adtech market.”