Criteo Posts 10% Revenue Hit for Q3 as Covid-19 Continues to Impact Ad Spend

But tie-up with The Trade Desk tops ongoing recovery plan

Criteo logo
The dip was in line with earlier guidance. Getty Images
Headshot of Ronan Shields

Amid ongoing preparations for the decline of third-party cookies on the web, the Covid-19 pandemic continues to impact ad tech with Criteo today citing it as the primary cause for Q3 revenue dipping 10% to $470 million.

Criteo CEO Megan Clarken described Q3 income as “better performance than expected” and cited how the numbers were largely in line with guidance issued in its earlier earnings call.

Clarken also emphasized how the company was continuing to double down on its retail media offering, which grew 60% year over year.

“As we look forward, we are transforming our company to a commerce media platform over the next few years to maximize the value of our unique reach and commerce assets, enabling our strong customer base, including global brands and retailers, to optimize their sales and digital advertising returns,” she said in a statement. “We believe we have a path to growth over time with a clear product roadmap, a dedicated leadership team and the financial strength to support growth investments.”

Clarken further went on to detail Criteo’s efforts to find a solution to the decline of third-party cookies by 2022 with Criteo execs citing the role its Sparrow proposal played in influencing the recent Privacy Sandbox initiative spearheaded by Google.

In conversation with analysts, Criteo chief product officer Todd Parsons said, “A third product focus is to transform traditional contextual advertising into performance for our brand and retail partners. By applying our machine learning at the intersection of content, commerce and user signals, we believe we can create a wholly unique advertising solution, which has incredible scale and doesn’t rely on third-party cookies.”

Criteo’s leadership further advised that its Q4 revenue would be in the range of $223 million to $230 million, representing an annual decline of 15%.

CFO Sara Glickman told analysts the financial impact of Covid-19 in Q3 was estimated to be in the range of $33 million.

She went on to add, “Sixty percent of this impact was from travel [advertisers’ reduction in spend], 40% from classified and 10% from retail.”

In addition, Criteo also used the earnings update to announce a tie-up with The Trade Desk to integrate by joining the Unified ID initiative, an open-source project spearheaded by the latter of the pair.

Similar to the tie-up between The Trade Desk and LiveRamp announced Tuesday, Criteo will provide the sign-on solution and co-develop the transparency protocols in Unified ID 2.0. These efforts will seek to give consumers greater control over how their data is used for advertising purposes.

“Both companies will start testing this concept with publishers and other industry partners this November and December,” according to a statement announcing the update.

In the same statement, The Trade Desk CEO Jeff Green added, “This collaboration with Criteo is a major step forward in this industrywide approach, bringing two of the largest demand side players together, even as we compete in our everyday business. This partnership represents undeniable momentum as the industry collaborates on an upgrade to replace the third-party cookie.” 

@ronan_shields Ronan Shields is a programmatic reporter at Adweek, focusing on ad-tech.