Criteo Holding Its Ground as Rivals Try to Steal Its Share

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 large shopper losses that might value the corporate $100 million in income over the following yr.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 is likely to 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 mentioned.That put Criteo in a two-front struggle: combating for its enterprise as massive retail shoppers sought to carry their operations in home, whereas smaller retailers are susceptible to being wooed by upstart adtech corporations. “It’s undoubtedly a menace to Criteo,” one company govt advised ADWEEK.Nonetheless, Criteo seems to be holding robust. 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 look like large losses on the floor, Criteo actually solely misplaced a part of these companies, not the whole account.“Smaller corporations 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 advised ADWEEK.However the firm isn’t out of the woods but. It should proceed to innovate quick sufficient to maintain its rivals from chiseling away at its roster of over 200 retail shoppers whereas adapting to generative AI that’s revolutionizing the best way folks discover and purchase merchandise.“Criteo is going through rising competitors that’s maintaining it sincere and driving it to innovate,” Andrew Lipsman, impartial retail media analyst, advised ADWEEK. “Nevertheless it’s not straightforward to dislodge.”Criteo rivals tout flexibility and cutting-edge techRetail media remains to be one of many fastest-growing segments of the advert trade. U.S. advertisers alone purchased $52 billion in retail media final yr and are anticipated to purchase $98 billion by 2028, in response to 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 expertise like advert serving, sources advised ADWEEK. An organization spokesperson disputed the claims about its expertise, and mentioned its charges replicate the worth it delivers to shoppers.Criteo was an early winner when a brand new slate of shops first began constructing promoting companies through the COVID-19 pandemic, mentioned 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 knowledge unit—and PromoteIQ, which was acquired Microsoft, however now doesn’t take new shoppers, in response to the tech big. Now, Criteo is going through off towards a brand new wave of corporations like Kevel, Koddi, Moloco, Pentaleap, Topsort, and Vantage, who pitch subtle tech to unravel the rising challenges retail media sellers face. Criteo’s rivals are additionally leveraging extra programmatic promoting, an space they declare Criteo has been gradual to embrace. An organization spokesperson disputed that and mentioned its strategy to programmatic is “intentional and designed to satisfy the wants of particular retailers.”Many of those rival corporations say they will 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, mentioned Jon Flugstad, senior director of enterprise growth at Moloco. Pentaleap connects with demand-side platforms like Teads to supply that programmatic demand, mentioned CEO and founder Andreas Reiffen.Criteo’s rivals are additionally inking offers with companies 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 approach folks discover and purchase merchandise, as massive language fashions and AI-powered shopper brokers influence commerce.“We’re in a substitute cycle,” mentioned Regina Ye, co-founder and CEO of Topsort. “New options are targeted on product and engineering, and the way agentic tech and AI from Silicon Valley will influence retail media.”The incumbent is holding robust—for nowCriteo’s enterprise isn’t exhibiting indicators of bowing to the competitors but.The corporate made $60 million on its retail media enterprise within the second quarter, up 11% yr over yr. 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 adverts, and enabled programmatic shopping for of onsite show adverts. It additionally inked a partnership with Mirakl to carry extra small-and mid-size third-party advertisers into the retail media networks that it powers.CEO Michael Komasinski mentioned Criteo’s rivals aren’t impacting its product roadmap: “I don’t assume I’ve seen something that radically modifications what we’re doing,” he advised ADWEEK. “However we take all competitors severely, even the small ones.”As rivals 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 carry demand and actual income,” he mentioned. “When our shoppers are making the choice to face up a retail media community, it’s a holistic marketing strategy, and we’re the companion that may put income on the highest line, not only a value merchandise that does advert serving.”These wide-ranging capabilities set Criteo’s platform aside, mentioned 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 mentioned.“Criteo is a lovely companion for a lot of retailers due to how plug-and-play their answer is,” Burdick defined. “For retailers seeking to rapidly rise up a retail media community, Criteo’s turnkey infrastructure makes it straightforward to get began and scale.”The method of switching out Criteo’s tech for a competitor will also be lengthy and laborious.“Generally, the incumbent wins as a result of they’re incumbent,” one other supply mentioned.At the same time as competitors towards Criteo steps up, the expansion of retail media signifies that for now, there’s loads of spend for a number of distributors.“Standard enterprise technique would counsel that finally there may be consolidation, however the enterprise remains to be rising a lot that there is no such thing as a want for that presently,” one supply advised ADWEEK. “It’s aggressive, but it surely’s not brutally aggressive. Everybody’s profitable [new business] and nonetheless being worthwhile.”There are a number of RFPs from retailers that can wrap up within the coming months, a number of trade sources mentioned. When that occurs, there can be a clearer image of Criteo’s place inside the aggressive panorama.And when retail media’s exponential development inevitably slows, winners and losers throughout retail media shopping for and promoting will emerge.“The market will finally have to consolidate with a comparatively finite variety of RMNs as potential end-users of the expertise,” Lipsman mentioned.Criteo is towards extra than simply legacy advert tech at this level, mentioned 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 section’ for platforms like Criteo, profitable will imply enabling actual differentiation, creatively fixing for fragmentation and advertiser fatigue, and looking out past on-site ways.”