Criteo and Microsoft have partnered to develop Retail Media

Publication date: 2024-08-02 | Source: Pubmag

Criteo and Microsoft Advertising have joined forces to strengthen their positions in the growing Retail Media market. This partnership integrates Microsoft demand into the Criteo platform, allowing more than 225 retailers working with Criteo to access a new revenue source. Additionally, 500,000 active Microsoft Advertising customers across 187 global markets will be able to achieve higher and measurable campaign performance on a single unified platform.

Retail media — is a form of advertising displayed directly on retailer platforms, such as store websites or mobile apps. It allows brands to promote their products right at the point of purchase when the customer is already in shopping mode. Examples include sponsored products on Amazon, banner ads on Walmart, and targeted ads in the Target app.

One of the key aspects of the collaboration is Microsoft’s AI-powered platform for creating ad creatives, which helps automate and simplify the ad creation process. It uses artificial intelligence to analyze customer data and create personalized ad materials. This means that advertisers can easily and quickly generate ad materials that are more relevant and engaging for their target audience.

How does it work?

Data collection. The platform collects and analyzes data on customer preferences and behavior, including purchases, viewed pages, and color and style preferences.
Analysis and processing. Using machine learning, the platform analyzes the data to identify user trends and preferences.
Creative generation. Based on the analysis, the platform automatically generates ad creatives tailored to the interests of the target audience, such as banners, videos, and text ads. Ordinary photos of advertised products can be used, and AI transforms them into attractive images.
Personalization. Each creative is personalized for specific audience segments, making the ads more appealing and relevant.
Optimization. The platform uses data from previous ad campaigns to optimize new creatives, enhancing their effectiveness.

Third-party cookies and key partnerships

One of the key elements of Criteo's strategy is the use of third-party cookies for data collection and ad targeting. This allows the company to offer its clients personalized advertising solutions. Google's recent announcement that they do not plan to follow Apple's lead in blocking third-party cookies has been an important affirmation of this solution's relevance. It strengthens market confidence in the availability and effectiveness of cookies, which is crucial for Criteo and its partners.

«Thanks to our close collaboration with the Google team, we learned from their leadership that the goal of developing user choice is to ensure clarity for consumers in their interactions with cookies,» said Todd Parsons, Chief Product Officer at Criteo.

Criteo actively collaborates with major companies such as Facebook and Google, as well as a number of other partners, leveraging the unique data and capabilities of these closed ecosystems. These partnerships create unique opportunities for more accurate and effective advertising campaigns.

Market fragmentation

Retail Media is one of the fastest-growing sectors in advertising. According to GroupM, it is projected to account for 15.4% of total ad revenue by 2028, surpassing television revenue (including CTV). However, 93% of advertisers worldwide consider market fragmentation a serious issue.

Fragmentation complicates the execution of unified advertising campaigns. Projections indicate that the share of Retail Media in total ad revenue will continue to grow, highlighting the need for integration between platforms and unification of advertising methods. The partnership between Criteo and Microsoft aims to address this issue by offering more coordinated and unified solutions for retailers and advertisers.

Brian Gleason, Chief Revenue Officer at Criteo, noted: «Expanding our collaboration with Microsoft Advertising will simplify the ad-buying process for advertisers and increase retailers' opportunities to attract demand. This partnership not only helps address the problem of market fragmentation but also opens up new prospects for growth and development. In the future, the companies plan to implement new technologies and expand existing solutions to offer their clients the best advertising tools and services».

MRC certification

Recently, in March 2024, Criteo announced its first certification by the Media Rating Council (MRC). The certification covered the counting of impressions and clicks on desktops, mobile devices, and in-app for the "Sponsored Products" category, as well as ad impressions in its own products Commerce Max and Commerce Yield. Criteo received a positive evaluation in accordance with MRC guidelines for detecting and filtering invalid traffic, confirming the platform's reliability and its products for advertisers.

Criteo Commerce Yield — is a platform that helps retailers maximize their advertising and data revenues. It optimizes monetization through efficient ad space management and data-driven targeting improvement. Essentially, it is an SSP for retailers.

Q2 2024 results

At the end of the quarter, Criteo's revenue increased by 1%. The company moved from a net loss of $2 million in the previous quarter to a profit of $28 million.

According to Clarken, thanks to the recently launched Commerce Max, campaign budgets grew by more than 50% in the second quarter compared to the same period last year.

Criteo Commerce Max — is a DSP for Retail Media, helping advertisers and retailers effectively engage with customers at different stages of their journey. Using data on customer purchases and preferences, it personalizes ads, enhancing campaign effectiveness.

Conclusion

According to Criteo CEO Megan Clarken, this collaboration will only start to bear fruit next year.

«The trust they have placed in us underscores the need to consolidate the ecosystem, and we take this very seriously. Criteo must become the unifying hub for Retail Media.»

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