Retargeting could be thought of a legacy enterprise, but it surely held robust for Criteo – and really grew – in the course of the first quarter of this 12 months.
On Criteo’s Q1 earnings name Wednesday, CEO Megan Clarken pointed to the resilience of retargeting as a driver of the corporate’s progress.
Not that retargeting’s rebound wasn’t additionally considerably of a shock.
“The efficiency of the retargeting enterprise was a nice sur – really, let me simply say that it was a pleasant factor to see,” Clarken instructed AdExchanger.
Throughout the pandemic, Criteo noticed retailers lean into retargeting in lockstep with the acceleration in on-line buying and reallocation of investments into direct response promoting.
Criteo’s income for the primary quarter was $541 million, a 7% YoY enhance that was partly pushed by retargeting. That’s spectacular progress, but in addition price noting that it’s in opposition to a comparatively simple comp after advertisers sharply curtailed their spending when the pandemic first took maintain originally of Q1 2020.
However retargeting nonetheless makes up the vast majority of Criteo’s income – its new options grew 60% in Q1, however nonetheless signify solely 21% of the whole enterprise – and retargeting can be significantly diminished by the lack of third-party cookies.
To mitigate the danger, Criteo has developed new and different options, together with a first-party shopper graph, a commerce media platform and a brand new contextual focusing on answer released in late April that anonymously teams folks primarily based on their transactional conduct after which makes use of AI to seek out the writer URLs and contextual classes which have the best affinity for these teams.
If that sounds acquainted, it’s as a result of it’s just about cohort-based focusing on that maps the merchandise folks purchase to their curiosity in sure content material.
Talking of cohorts, Todd Parsons, Criteo’s chief product officer, instructed buyers the corporate is “very hungry” to begin testing FLEDGE, which is an evolution of Google’s TURTLEDOVE proposal that lays the muse for creating brand-specific cohorts that may later be focused with particular adverts.
It’s no marvel Criteo is hungry for it. FLEDGE is the Privateness Sandbox proposal “which most carefully approximates retargeting,” Parsons mentioned.
FLEDGE testing is to begin later this 12 months. Within the meantime, Criteo is within the queue to get began on testing FLoC the place it’s out there, aka, not in Europe. FLoC, or Federated Studying of Cohorts, is Google’s proposal for easy methods to create cohorts of customers primarily based on their pursuits utilizing on-device machine studying.
However whereas the trade prepares for third-party cookies to begin phasing out subsequent 12 months on Chrome, Apple has already made its anti-tracking transfer on iOS 14 with the latest launch of its AppTrackingTransparency (ATT) framework.
Criteo’s enterprise is much less uncovered to the app ecosystem, but it surely’s nonetheless anticipating a $55 million incremental impression on its income for the complete 12 months 2021 on account of privateness and id adjustments primarily associated to ATT. Simply $5 million of that was felt in Q1, because of Apple’s deadline extension. Criteo anticipates a roughly $11 million hit subsequent quarter.
“We’re executing nicely, definitely in retail and ecommerce,” Sarah Glickman, Criteo’s CFO, famous in the course of the name, “and, sadly, a few of that goodness simply will get form of sucked up with the privateness impression.”
All issues thought of, although, it’s not a lot of a gouge. Which is why Criteo is spending far more time on the approaching third-party cookie adjustments, which have a transparent and direct impression on its backside line.
However simply because third-party cookies are on the best way out, doesn’t imply different focusing on options can’t be efficient.
“One thing like cohorts, for instance, will present outcomes,” Clarken mentioned. “The longer term can be concerning the high quality of these outcomes and who can present the higher cohorts and the higher efficiency.”