French Ad Retargeting Co. Brings CPC And Privacy Model To U.S.

JB Rudelle

The U.S. officially gains another retargeting company Thursday. Criteo has moved its headquarters from Paris, France to Palo Alto, Calif., bringing with it a performance-based cost-per-click (CPC) advertising model and advanced European privacy features.

JB Rudelle -- chief executive officer, who cofounded the company in 2005, along with two ex-Microsoft "technical geniuses" -- supports more than 400 customers worldwide, including several hundred ecommerce brands. The company, which just began supporting companies in the U.S. like AllPosters.com, boasts serving up about 4 billion retargeted ad impressions per month. In Europe, Criteo retargets ads for Expedia and Dell, and U.K. retailer Marks & Spencer.

Experience gained in Europe puts Criteo ahead of the U.S. market in terms of protecting consumer privacy, Rudelle says. "We have been working in countries like Germany, which is probably the most demanding country in the world when it comes to privacy," he says. "We put a direct opt-out link on all retargeting display banners in Europe, and hope to bring this feature into the U.S. market."

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More than 95% of consumers leave ecommerce Web sites without making a purchase, taking an average of five visits before becoming a spending customer, according to data from Criteo.

Not having an ability to integrate even 1% of leads from incoming traffic through retargeting kept many of the older retargeting platforms in mothballs. As expected, U.S. online ad spending dipped last year for the first time since the 2001-2002 recession -- dropping 3.4% from $23.5 billion in 2008 to $22.7 billion in 2009, according to year-end data released Wednesday by the Interactive Advertising Bureau and PricewaterhouseCoopers. After running flat for most of last year, ad spending in the fourth quarter saw a seasonal lift, increasing 14% from $5.5 billion in the third quarter to $6.3 billion -- the most in any quarter to date.

Criteo's technology can scale quickly, and integrates with Google's ad-server technology, either Doublick for Advertisers, or Doubleclick for Publishers. Rudelle says Criteo's technology drops a cookie in the Web browser to find them when they return. Advertisers only get charged if someone clicks on the banner that brings them back to the company's Web site. It takes about half a day to integrate the technology for a client, he says.

Rudelle says the industry offers three different types of retargeting models, pointing to Google's retargeting platform as a simple "plug-and-play" solution that could augment Criteo's offering. Google recently announced a retargeting offering.

Driving the company's U.S. expansion plans, Karen Dayan comes to Criteo as vice president of marketing from Microsoft. She has 14 years of international experience in data-driven product marketing and program development. Jeff Mills assumes the role of vice president of strategic partnerships, bringing more than 13 years of marketing, sales and leadership experience at leading internet companies, including Yahoo and SideStep.

3 comments about "French Ad Retargeting Co. Brings CPC And Privacy Model To U.S.".
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  1. Robert Leathern from XA.net, Inc., April 8, 2010 at 12:36 p.m.

    One of the interesting things about buying retargeting on a CPC or CPA, is that the advertiser is essentially giving their data away for free. The eCPM for retargeting ads run on a CPC is typically very high - and what this means in practice is that retargeting companies that sell on a CPC can make very fat margins (I have no knowledge of Criteo's of course) by buying on a CPM and selling on a CPC to advertisers. It's a nice model for the network. Advertisers should also consider options where they can buy retargeting on a bid-based dynamic CPM.

  2. Adam Berke from AdRoll, April 9, 2010 at 1:35 p.m.

    Rob makes a good point. Many advertisers like performance oriented pricing models because of the perceived shared risk. However, a transparent CPM model ensures that the advertiser doesn't pay too much because of aggressive arbitrage by the provider. This doesn't apply only to retargeting, but any display advertising. Actually just wrote a log post on this topic as it pertains to CPA pricing: http://blog.adroll.com/2010/04/cpa-cant-get-no-satisfaction/

  3. Chris Zaharias from Campanja, August 12, 2010 at 1:42 p.m.

    [NOTE: I'm with Dapper.net, a competitor to Criteo]

    The real issue with retargeting is not so much consumer privacy issues, but rather that consumers might find it intrusive & irrelevant.

    a) Irrelevant: Criteo's targeting doesn't appear to distinguish between people who've looked at a product & bought it vs people who looked & didn't buy. Of course people are going to be annoyed when they see ads following them around the web *for the product they just bought*. A good retargeting system should be able to understand consumer intent & pick in real-time which product to show, yet Criteo's system simply uses custom Javascript to scrape the product(s) you view and stores them in your cookie, with no thought given to buyers vs non-buyers. Here's a wild thought: perhaps the user didn't convert because they didn't like the offer on merchant's site - so another one would be better, and perhaps one that's not already stored in user's cookie.

    b) Intrusive: Criteo has no sense of frequency capping, leading to the annoying phenomenon of the consumer being shown the same ad ad infinitum, literally following them everywhere they go. Frequency capping is the most basic of display ad concepts, but apparently the fact that Criteo charges on a CPC basis seduces Criteo into a level of frequency that annoys customers (but makes Criteo lots of money).

    Bravo to Criteo for having seen the retageting opportunity and very successfully gone after it. But merchants' choices on which retargeting vendor to choose will ultimately decide whether consumers deem retargeting to be a good thing or a bad thing. That said, IMHO merchants should look for the following in a vendor:

    1) Truly dynamic creative, capable of pulling products not just from a cookie store, but rather from the advertiser's site, in real-time or w/sufficient frequency as to be fresh product/price info;
    2) Proven ability to do frequency capping
    3) A pricing model that does not incent bad behavior such as was described above;
    4) Willingness to do 'true lift' studies to show what subset of conversions from retargeting would have happened anyways. This is sooo easy to do, for example, by running PSA ads side-by-side with targeted ads. I rather suspect that if Criteo ran 'true lift' studies across its 500 clients and ~$50M revenue, half the clients and half the revenue would disappear.
    5) Intent Analysis = algorithms that figure out which product(s), flights, hotels, prices, etc to show based on a) client's ROI goals, not some across-the-board CPC that's entirely irrelevant; b) analysis of different behavioral, contextual, geo/IP & other data signals; and c) view into the real-time market price for each impression
    6) Value in New User Acquisition - the techniques used for retargeting can & should be used to acquire *new* users, not just site visitors
    7) The ability to set ROI/CPA goals that the system will manage to.

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