Criteo’s Revenues Dip 5% as It Counts the Cost of Apple’s Cookie-Blocking Technology and GDPR

Announces purchase of in-app company to reduce reliance on cookies

Criteo's leadership claims the company has already seen the worst of the impact of GDPR. Getty Images
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Criteo posted a 5 percent year-over-year decline in earnings in the third quarter with revenues of $223 million, as the company continues to feel the impact of GDPR and Apple’s embrace of cookie-blocking technology.

The Paris-based company also used the financial disclosure to announce it purchased Manage, a mobile app-install company, for an undisclosed sum, with Criteo’s leadership claiming the move underlined its efforts to reduce its reliance on cookie-based ad tech.

It also reported it had added 280 clients during the quarter, bringing its total to more than 19,000 and forecasts that revenues for the all-important final quarter of the year would be between $256 million and $262 million.

Criteo is one of the few remaining publicly traded ad-tech companies and is primarily known for its ad retargeting technology, although its leadership is keen to drop this tag as it diversifies its offerings. The company’s performance is often seen as a bellwether for the sector.

In its subsequent call with financial analysts, Criteo’s leadership faced repeated questions on the challenges posed by GDPR and Apple’s Intelligent Tracking Prevention, or ITP, technology, with company leaders maintaining it has already endured the worst of these challenges.

ITP limits how advertisers can track users across the internet by putting a 24-hour limit on ad retargeting in place, thus impeding the primary function of Criteo’s technology. It debuted last year with an additional update making it even more difficult for ad-tech companies to retarget Safari users. Criteo CEO JB Rudelle reported that he did not anticipate additional incremental impact of the latest ITP update.

“We are very much in steady mode,” Rudelle said.

An Apple spokesperson previously remarked how ad retargeting is based on data “collected without permission” with the same reasoning underpinning the EU’s GDPR.

This legislation was introduced on May 25 and has had a significant impact on the digital advertising sector, with Criteo reporting the negative impact of GDPR was “below our expectations” at $4 million in lost revenue.

Overall, Criteo claimed the performance was primarily driven by growth with “large clients in the U.S. more than offset by softer performance in the midmarket”.

However, the company forecast an uptick in client additions in the second half of 2019 due to the rollout of self-service tools as well as reducing its reliance on cookie-based targeting.

Brian Wieser, senior analyst at Pivotal Research, described the performance as favorable and voiced his faith in Criteo’s ability to upsell its planned development of a mobile app offering.

Wayne Blodwell, CEO of consultancy The Programmatic Advisory, echoed this positive outlook, especially given the industrywide headwinds, but underlined Criteo’s need to expand beyond retargeting.

“They’re facing challenges of brands in-housing, regulatory pressures and greater adoption of header bidding all of which reduce their market advantage,” he told Adweek. “They still massively need to diversify their offering, but I think the market will respond well to these results in the short-to-mid term.”

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