Throughout Criteo’s first quarter earnings name in Might—and the primary for newly-appointed chief govt officer Michael Komasinski—the corporate was nonetheless reeling from two massive consumer losses that might price the corporate $100 million in income over the subsequent 12 months.
Goal’s retail media enterprise Roundel introduced advert gross sales in home sooner than Criteo anticipated, and Uber Eats moved its U.S. advert enterprise over to Instacart’s Carrot Advertisements platform.
Within the months since, retail media insiders have seen these losses as proof that Criteo’s reign because the dominant retail media tech participant may be ending. Rivals like Kevel, Koddi, Moloco, and others are aggressively competing towards Criteo for retail media wins, boasting extra nimble and up-to-date tech, sources stated.
That put Criteo in a two-front conflict: preventing for its enterprise as massive retail shoppers sought to deliver their operations in home, whereas smaller retailers are weak to being wooed by upstart adtech firms. “It’s positively a risk to Criteo,” one company govt instructed ADWEEK.
Nonetheless, Criteo seems to be holding sturdy. The corporate posted better-than-expected earnings on July 30, boosting its end-of-year outlook. It reported a 112% retention charge for its retailer shoppers. And whereas Roundel and Uber Eats appear to be massive losses on the floor, Criteo actually solely misplaced a part of these companies, not your complete account.
“Smaller firms coming in [is] only a proof level that this can be a place to be and that and that it’s an enormous market and that there’s alternative,” Komasinski instructed ADWEEK.
However the firm isn’t out of the woods but. It should proceed to innovate quick sufficient to maintain its opponents from chiseling away at its roster of over 200 retail shoppers whereas adapting to generative AI that’s revolutionizing the way in which folks discover and purchase merchandise.
“Criteo is dealing with rising competitors that’s retaining it sincere and driving it to innovate,” Andrew Lipsman, unbiased retail media analyst, instructed ADWEEK. “However it’s not simple to dislodge.”
Criteo rivals tout flexibility and cutting-edge tech
Retail media remains to be one of many fastest-growing segments of the advert business. U.S. advertisers alone purchased $52 billion in retail media final 12 months and are anticipated to purchase $98 billion by 2028, in accordance with Emarketer.
However as advertisers sink in additional {dollars}, they’re additionally demanding extra options: higher measurement to show out the funding, extra programmatic capabilities, and simpler methods to purchase throughout many retailers without delay.
Criteo’s lengthy dominance in offering demand for retail media has let the corporate cost comparably excessive charges whereas lagging on know-how like advert serving, sources instructed ADWEEK. An organization spokesperson disputed the claims about its know-how, and stated its charges mirror the worth it delivers to shoppers.
Criteo was an early winner when a brand new slate of outlets first began constructing promoting companies in the course of the COVID-19 pandemic, stated James Avery, CEO and founding father of Kevel.
On the time, Criteo competed principally with CitrusAd—which has since been acquired by Publicis Groupe and now sits inside its Epsilon information unit—and PromoteIQ, which was acquired Microsoft, however now doesn’t take new shoppers, in accordance with the tech big.
Now, Criteo is dealing with off towards a brand new wave of firms like Kevel, Koddi, Moloco, Pentaleap, Topsort, and Vantage, who pitch subtle tech to resolve the rising challenges retail media sellers face. Criteo’s opponents are additionally leveraging extra programmatic promoting, an space they declare Criteo has been sluggish to embrace. An organization spokesperson disputed that and stated its method to programmatic is “intentional and designed to fulfill the wants of particular retailers.”
Many of those rival firms say they’ll present much-needed demand to retail media sellers. Moloco, for instance, claims its up to date infrastructure helps retailers compete for advert {dollars} towards the likes of Google and Meta, stated Jon Flugstad, senior director of enterprise improvement at Moloco. Pentaleap connects with demand-side platforms like Teads to offer that programmatic demand, stated CEO and founder Andreas Reiffen.
Criteo’s rivals are additionally inking offers with corporations like Pacvue and Skai to make use of APIs so advertisers can simply purchase retail media throughout a number of websites—and keep away from shopping for by Criteo.
Many of those upstarts additionally promise to assist retailers adapt to the altering manner folks discover and purchase merchandise, as massive language fashions and AI-powered shopper brokers impression commerce.
“We’re in a substitute cycle,” stated Regina Ye, co-founder and CEO of Topsort. “New options are centered on product and engineering, and the way agentic tech and AI from Silicon Valley will impression retail media.”
The incumbent is holding sturdy—for now
Criteo’s enterprise isn’t displaying indicators of bowing to the competitors but.
The corporate made $60 million on its retail media enterprise within the second quarter, up 11% 12 months over 12 months. It has an prolonged partnership with Microsoft, which is recommending that retailers that used PromoteIQ transfer to Criteo.
And it’s bolstering its tech to fill out its capabilities. Within the final six months, it added video advertisements, and enabled programmatic shopping for of onsite show advertisements. It additionally inked a partnership with Mirakl to deliver extra small-and mid-size third-party advertisers into the retail media networks that it powers.
CEO Michael Komasinski stated Criteo’s opponents aren’t impacting its product roadmap: “I don’t suppose I’ve seen something that radically modifications what we’re doing,” he instructed ADWEEK. “However we take all competitors severely, even the small ones.”
As opponents go to market claiming superior tech, Komasinski insists Criteo’s worth prop is greater than fancy options.
“We’re not simply an advert server—we actually deliver demand and actual income,” he stated. “When our shoppers are making the choice to face up a retail media community, it’s a holistic marketing strategy, and we’re the associate that may put income on the highest line, not only a price merchandise that does advert serving.”
These wide-ranging capabilities set Criteo’s platform aside, stated Melissa Burdick, co-founder and president of adtech agency Pacvue.
Most of the newer upstarts require retailers to piece collectively a tech stack by a number of partnership offers, one thing that may be daunting for small- or mid-sized retailers, she stated.
“Criteo is a sexy associate for a lot of retailers due to how plug-and-play their answer is,” Burdick defined. “For retailers trying to rapidly get up a retail media community, Criteo’s turnkey infrastructure makes it simple to get began and scale.”
The method of switching out Criteo’s tech for a competitor may also be lengthy and laborious.
“Typically, the incumbent wins as a result of they’re incumbent,” one other supply stated.
Whilst competitors towards Criteo steps up, the expansion of retail media signifies that for now, there’s loads of spend for a number of distributors.
“Typical enterprise technique would counsel that ultimately there may be consolidation, however the enterprise remains to be rising a lot that there isn’t a want for that at present,” one supply instructed ADWEEK. “It’s aggressive, nevertheless it’s not brutally aggressive. Everybody’s profitable [new business] and nonetheless being worthwhile.”
There are a number of RFPs from retailers that may wrap up within the coming months, a number of business sources stated. When that occurs, there can be a clearer image of Criteo’s place inside the aggressive panorama.
And when retail media’s exponential progress inevitably slows, winners and losers throughout retail media shopping for and promoting will emerge.
“The market will ultimately have to consolidate with a comparatively finite variety of RMNs as potential end-users of the know-how,” Lipsman stated.
Criteo is towards extra than simply legacy advert tech at this level, stated Sarah Marzano, retail media analyst at Emarketer. A lot of its new rivals have been constructed particularly for retail media.
“As we transfer out of the ‘land-grab part’ for platforms like Criteo, profitable will imply enabling actual differentiation, creatively fixing for fragmentation and advertiser fatigue, and searching past on-site techniques.”
