Criteo’s Q3 earnings report showed mixed results this week. While revenue dipped 2% to $459 million from $469 million in 2023, gross profit climbed 13%.
The company’s retail media business, which it’s focused on developing and building around, saw strong growth of nearly one-quarter (23%). Meanwhile, its legacy retargeting business, “performance media,” grew by a much more modest 5%. This was driven by “strong momentum,” says Criteo, in the use of its Commerce Audiences product, a targeting solution that lets brands use Criteo’s shopping data to reach audiences.
Still, the revenue dip spooked some investors, with the share price down nearly 20% as of today.
Why This Matters:
Overall revenue aside, Criteo’s growth in retail media is a testament to the popularity of the category. As digital commerce continues to explode and third-party cookies fade away (eventually), first-party data has also become increasingly valuable. This shift has created new opportunities for retailers and consumer-facing brands to build advertising businesses, with everyone from airlines to grocery stores jumping in to meet rising advertiser demand. (These advertising businesses often have much better margins than the legacy businesses, too.)
The numbers back up Criteo’s strategy here. By serving both sides of the market – brands buying ads and companies building ad networks – they’ve built relationships with a pretty impressive roster: 3,100 brands and 225 retailers, including JCPenney and Office Depot. Their recent partnership with United Airlines’ Kinective Media — the airline’s new network, launched at Cannes — builds on that reach and traction.
Experts React:
Criteo CFO Sarah Glickman highlighted the upcoming — or here right now? – holiday season as a key growth opportunity, stating, “We enter the holiday season with confidence to deliver double-digit growth and margin expansion for the year while continuing to invest in our transformation.”
Our Take:
Criteo is continuing to work on its evolution from a retargeting specialist to a commerce media platform, and, obviously, the progress has been promising.
A key potential growth area on the retail media side is off-site monetization. Outgoing CEO Megan Clarken (who plans to retire next year) highlighted this opportunity on the earnings call: “Off-site, we’ve had capabilities for a while, and we’re starting to see some very big clients adopt this as part of their whole retail media strategy.”
Building a complete solution, especially in off-site , will be crucial as competition intensifies. Players like The Trade Desk, Yahoo, and Perion are all vying for position in the expanding retail and commerce media market. There are also a host of more specific solutions emerging in retail media. But as Criteo has shown, there’s plenty of opportunity to go around – whether you’re a tech vendor, media owner, or advertiser. The broader shift from retail media to commerce media underpins that, too.
