An Ad Tech Firm That's Actually Making Money

The ad tech landscape is littered with companies promising to bolster Web publishers’ shrinking bottom lines. Few truly deliver on that promise, and fewer still turn a profit. However, retargeting firm Criteo seems to be the exception as it generates serious cash while providing some publishers with an injection of revenue. The Paris-based company has only recently cracked the U.S. market, with stateside revenue tripling from 2011 to 2012 and accounting for 20 percent of its overall nut. According to president Greg Coleman, Criteo, which presently works with over 4,000 publishers (though few huge names, as Criteo’s focus, he said, is on the midtail), should pull in about $300 million in revenue in 2012. The fact that Criteo actually helps publishers monentize more inventory certainly helps. That would seem like table stakes in the vast ad tech/retargeting world, but it’s not, said Richard Lowden, vp of sales and advertising at Weather Underground, which began working with Criteo in June. Any time an ad network, retargeting firm, supply-side platform “or however else they describe themselves” pitches Weather Underground, Lowden and his team ask what the company’s potential fill rate is. “They’ll say, ‘Oh, you know, probably 20-30 percent.’ So we know that’s probably 5-10 percent. Well, that’s horrible,” he said, noting that Criteo delivers a 100 percent fill rate because of its technology. In addition to fill rate, Weather Underground weighs success according to clickthrough rate. The site’s ads typically see a 0.3 percent clickthrough rate, but with Criteo it sees a 0.8 percent to 2 percent clickthrough rate. That could explain Criteo’s advertiser renewal rate, which Coleman pegs at a stunning 96 percent. But other publishers warn that Criteo can also soak up inventory, while yielding low pricing relative to direct sales.“They are able to work with a very broad range of advertisers,” said Tim Gentry, head of optimization and effectiveness at The Guardian, which has been working with Criteo for two years. However, the brand has been having trouble meeting Criteo’s appetite for impressions because of “gaps between [Criteo ads’] price point and...creative formats and brand partnerships that deliver us high CPMs,” added Gentry. The situation is the reverse for advertisers. Coleman said a majority of Criteo’s programs with marketers run uncapped. “When a client finds a magic [cost-per-click], 70 percent of them say, ‘Give me all you’ve got,’” he claimed. Criteo’s been profitable since 2008 and has the financial stats to perhaps even go public, said Coleman. Publishers would prefer that to the firm being swallowed by an agency holding company seeking a new revenue stream. “The fact that they’re independent from other buying groups gives them a lot in the way they are able to work with a very broad range of advertisers,” Gentry said.

Performance Marketing

An Ad Tech Firm That's Actually Making Money

Retargeter plotting IPO, says president

Tim Peterson

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Tim Peterson