ERIC EICHMANN: Facebook is a custom integration that’s been really positive for us. More consumers are spending time on mobile, so there are more opportunities for people to transact, and more opportunities to show them native ads. Mobile requires a lot of engineering work. You’ve seen this with Google and Facebook, which are taking an inordinate share of mobile advertising dollars because they’re very strong at developing solutions for that environment very quickly and most people have not yet developed as quickly.
For us, it was important to have a full solution in environments [like Facebook], but also different devices and operating systems. There’s iOS, which has its own [requirements] to serve banners, and there’s Android applications to develop for, too. We're at a point where mobile makes up 50% of our revenue.
How much revenue are native environments like Facebook driving for Criteo?
Native advertising now represents 16% of our revenue ex-TAC through [relationships like] with Taboola, which grew over 50% quarter over quarter, and then through Facebook. We have more than 5,000 clients that are on Facebook working with us both on desktop and mobile for Dynamic Product Ads.
How has your cross-device solution, Universal Match, performed?
If you take all of our revenue, 40% of that revenue [is driven by] users that have been matched cross-device. Very few companies can prove this on a global scale. We combine as high-quality probabilistic matching as possible with a strong deterministic data set layered in. Our solution is based on a real CRM match and logins.
One probabilistic way of doing things is taking an IP address in a household and matching that to a device, but if you have four in a household with 10 devices, it won’t make an accurate match if I’m on my phone and my daughter’s on a computer. So there are a lot of those issues where if you don’t have a strong enough deterministic set on top of probabilistic and the machine learning to make those connections, it’s very hard to solve.
A number of ad tech companies predict ad tech taxes will impact their future take rate. Is Criteo facing the same types of margin pressures?
Our results are quite good, so we’re not seeing a slowdown and we’re ratifying our guidance for the year. We have very different dynamics than other ad tech businesses. We act as more of a sales channel for advertisers. People consider us a cost of sale, not a discretionary marketing item, because they see a very strong tie between spend and the sales we generate. As long as we’re able to generate sales at an ROI the advertiser deems acceptable, improve our technology and bring on publishers that will drive advertising performance, we’ll see growth.
So Criteo is essentially immune to future challenges facing the industry?
Ecommerce continues to grow, and as long as people use digital more and more and transform their lives from purely offline to a hybrid of offline and offline, that’s increased opportunity for us around demand. Do we know what the advertising market will look like in Q4? No, but we represent a sizable segment of demand that’s performance-driven, and that continues to work well. I’m always wary of people who say they’re a performance advertising company, because deep down they’re not tracking the same metrics. They don’t measure on CPC. Do they look at things like view-through versus just click-through where you have to track engagement? We can’t say we’ve experienced similar [pressures] in our business at this point.
Interview edited for clarity and length.