At turn of the year, performance marketing technology company Criteo placed its total revenue for 2015 at €1 billion, a 60% jump up on the year before.
Founded in 2005, Criteo claims to be the “global leader” in performance-based display, generating millions of leads every day via dynamically generated ads, personalised with items searched for by the very people they serve.
Its 11,000-strong client roster pays purely on post-click performance.
The success of the Parisian-founded performance ad specialist is hard to dispute and is confounded in the latest quarterly financials. They reveal an overall Q1 revenue increase of 36%, with over half of that attributed to mobile advertising.
Helming the firm’s upward trajectory is newly-installed CEO Eric Eichmann, who stepped up from the role of president and COO in January this year following Criteo founder JB Rudelle’s move to the executive chair.
When a company of Criteo’s scale releases its takings for a given period, the implications can be far-reaching. With this in mind, PerformanceIN caught up with Eichmann to discuss the company’s latest bout of success, where it’s headed, and what it reflects about the industry.
Criteo’s financials for Q1 would suggest it’s not been a bad first quarter as CEO. Could you touch on how you’ve managed to achieve some of the key figures?
Eric Eichmann: We’re delighted with our performance in Q1; 2016 has started well and I’m confident it will be another successful year for Criteo.
These results come from strong performance across all aspects of our business. We’ve rolled out technology innovations across devices and platforms in Q1; mobile is now over 50% of our business, in-app is growing very quickly, our universal match solution is gaining great momentum, and we’ve now completed the roll-out of our first-generation dynamic creative optimisation platform to close to 100% of our clients.
During this quarter we’ve also added our second largest quarterly net client additions. We added over 760 new advertisers, ending the quarter with 11,000 clients while maintaining client retention at 90%.
Another highlight was our continued momentum in expanding publisher relationships, which is one of our key market differentiators. We added 2,300 publishers in the quarter, bringing us to over 16,000 publisher relationships in total.
Our relationship with Facebook also continues to be successful and we now have close to 5,000 advertisers live on Facebook DPA on both mobile and desktop.
We’re frequently told mobile use is ‘surging’, but 50% of your business being generated on mobile ads is still an astounding figure. This surely has great implications, not just for Criteo, but for the wider ad industry?
EE: Mobile is clearly continuing to have a transformative impact on the industry. Today, mobile is the first screen for the majority of consumers, especially as larger smartphone screens make mobile shopping more convenient. With mobile now representing over 50% of our business and virtually all of our clients using our complete multi-screen solution, we are in a great position to help brands benefit from consumers’ desire to browse, shop and communicate on mobile.
To fully capitalise on this opportunity, brands must prioritise their mobile strategy, both in-app and mobile web, and optimise their mobile buying experience. While on tablets people can use websites that aren't mobile-optimised, on smartphones it’s crucial to have either a mobile-optimised website or an app.
In your opinion, what is driving more consumers to mobile, and what opportunities does it open up for advertisers and ad tech groups to capitalise on?
EE: Ease and convenience are two of the main reasons consumers are increasing their use of mobiles. The smartphone has changed so many areas of our lives – from communication and shopping to navigation and travel. Now that they have larger screens, better battery life, and user-friendly apps, browsing and buying on mobile is easier than ever.
As consumer mobile usage continues to grow, personalised, real-time and omni-channel experiences are key to improving engagement and, ultimately, sales. The most successful advertisers will be those that target people rather than devices, delivering tailored, contextual and personal experiences across the entire cycle.
What are your priorities for the remainder of the year and into 2017?
EE: Looking to the remainder of 2016, we remain focused on a clear set of priorities. We are continuing to build our user graph and the cross-device infrastructure within the core platform of our Universal Match solution. In the coming quarters, cross-device sales information will be made available to clients, which will help drive more client spend.
Native will also continue to be a strong growth area. Thanks to their immersive format, native ads drive high engagement and performance. They require custom integration and dynamic creative capabilities, both being key Criteo strengths. In Q1 native ads represented over 16% of our revenue, and we are continuing to expand our partnerships with existing platforms and intend to work with additional partners.
We are also investing and making progress on disruptive product opportunities. We continue to be very excited by search and the plan is to build a roadmap of what we hope will be an exciting product in the future.
Following the release of your Q1 financials you vowed to make “advertising accountable to performance metrics through innovation and technology”. It’s a broad-sweeping statement; could you expand a bit more on what you meant?
EE: We believe that data-driven, people-centric marketing that is held accountable to performance metrics is the way all advertising will be done in the future.
By compiling and analysing hundreds of billions of dollars of actual sales data and with a network of global publishers, we can make sense of digital user behaviour - across any device - to deliver relevant, personalised ads that drive performance. It is this commitment to innovation and technology which we believe will ensure Criteo is in the ideal position to continue to drive this change.
With most forms of advertising online now having to be accountable, could you argue that performance marketing is now becoming the norm?
EE: For the billions they invest in marketing, advertisers expect to see actual sales and measureable returns. But in the past, measurement has been a struggle.
From Criteo’s perspective, we have always focused on performance. We look at actionable shopping intent rather than consumer demographics. That way, we can measure performance and directly link ad spend and revenues. Marketers like this transparency and the clear impact on the bottom line. In many ways, proving that advertising works is the holy grail of marketing and this is what performance marketing does, so it is not surprising that it is becoming the norm.