Fighting The Luma Chart: Criteo's Greg Coleman Lets The Numbers Do The Talking
The biggest challenge an ad solutions provider faces in a pitch session these days in that damnable “Luma Chart,” says Criteo President Greg Coleman. The former sales exec from Huffington Post, Yahoo and AOL now heads the international retargeting company and says that he knows his audience of marketers have heard it all before. “I say thanks for your time, and then I will ask them to promise me they won’t listen to anything I am about to tell them. The reason is that I will sound like the last 25 people I came after.”
In fact Coleman, now more than a year into his tenure at Criteo, thought that Terry Kawaja of Luma Partners’ infamous chart of hundreds of tech providers would have been a lot smaller at this point. “I thought we would have had a lot more consolidation and people going out of business years ago,” he admits. But the models even of the minor players have proven “reasonably efficient” enough to keep many companies just above or below breaking even. And so there is the clutter of voices and claims and pitches that all seem the same. “The noise in the marketplace is where everyone is confused and tired of testing and experimenting with stuff that doesn’t work well, with just bits of magic here and there,” Coleman says.
As Criteo is poised to expand outside of its traditional focus on travel, retail and classifieds into teleco, financial services and auto, Coleman is focusing on the effectiveness of retargeting generally and the returns from Criteo’s model in particular. The France-based company has assembled 4,000 publishers and exchanges from whom it buys inventory on a CPM basis and then sells to retargeting campaigns on CPC. He says that they don’t sell view-throughs, only clicks. In the performance marketing game ultimately it comes down to the numbers. Coleman says that unlike his days selling brand advertising at Yahoo and HuffPo, “I don’t have to do my tap dance because the numbers are the numbers and the ROI is the guiding light.” So instead of spewing the spiel, he asks marketers for their KPIs and guarantees that a test of his retargeting system will beat their goals by 20%. According to him, their renewal rate is 95%.
Criteo, which started life as a recommendation engine, still uses those chops to retarget customers with dynamic creative that branches out beyond the specific SKU the shopper last visited. The ad unit responds to the customer profile to serve up a range of related products. In fact, Coleman says that only 30% of the clicks on these ads are for the specific product or type users previously viewed. “Seventy percent are for the recommended items.”
The goal with retargeting has always been to bring to display search-like efficiencies, performance and measurement. The challenge of course also has always been scale. The high odds of finding a shopper with any frequency out on the network after he or she has visited the client’s site often frustrates clients who like the performance of retargeting but usually want more than they can get. While clients always have the problem at the front end of driving that initial swath of customers into the brand’s site so they can be tagged and retargeted, the emergence of exchanges and new targeting technologies have made it easier to find a higher percentage of those potential customers later. “About 80% of our business is on real-time bidding,” says Coleman. “We are buying individuals, not blocks.”
He credits the new platforms with changing the game when it comes to retargeting. “It makes a massive difference in our business model when we are dealing with the exchanges to know exactly what our marketer will be able to get before we buy on RTB.”
By combining RTB mechanisms with recommendations and dynamic, personalized creative, Coleman says Criteo gets an average click-through rate of .7%, a multiple higher than what he cites as an industry average of .06%. Despite the potential volume, he says clients are proving the ROI with search-like precision and so are not choking the flow. Seventy percent of campaigns run uncapped. “When they find the right CPC, they say let it roll,” he says.
But the next step for retargeting generally, and for Criteo particularly, is to move up from that bottom and necessarily narrower part of the funnel. Coleman’s crew of scientists are in the lab now working on new ways of expanding CPC to the top of the funnel and customer acquisition for brands.
As for that persistently complex Luma chart of companies that keep hanging on, Coleman cites (but doesn’t quantify) enormous revenue growth for Criteo that helps it break from the pack. But he is bemused by all the talk of some of these other ad tech and network solutions launching IPOs. “They are all talking about going public, but no one is going public,” he says. The models and the margins at least for now are just enough to keep the chart afloat, he claims: “You don’t have a lot of hemorrhaging, but not a lot of business models are breaking through.”