- Adtech company Criteo is competing for retailers’ advertising business with new competitors like CitrusAd.
- Criteo’s competitors try to undermine the company with new products and compensation.
- Criteo is also facing losses as retailers such as Sam’s Club take over its advertising business internally.
This story was originally published in July 2022 and has been updated.
Walmart, Target and Macy’s are pumping money into their ad sales units, part of an industry Boston Consulting Group expects to account for 25% of digital media spending by 2026.
Retailers often rely on adtech companies to power these new businesses, and French company Criteo has led the pack as the biggest name in that space. E-commerce advertising is driving much of Criteo’s growth, with the company hoping to reach $1 billion in retail media sales by 2025.
But a growing group of new entrants like CitrusAd, PromoteIQ and Kevel threaten to overthrow its dominance. In 2020, CitrusAd played a play for one of Criteo’s biggest longtime customers, Macy’s, and managed to get the retailer to pit CitrusAd’s technology against Criteo’s, a bake-off that closed this summer. And Sam’s Club, which also used Criteo, took its advertising business in-house in June and now uses completely different technology partners.
While these companies offer similar products, they present transparent business models designed to undermine Criteo and automation that makes buying and selling digital ads easier. PromoteIQ and Kevel also offer technology that gives retailers more control over their media businesses than what they would get if they worked with Criteo.
Adtech companies like Crealytics are pitching retailers about technology that can lower the fees retailers pay to suppliers. And more traditional adtech companies like The Trade Desk, Magnite and PubMatic are also looking for ways to buy and sell retail media.
Adtech companies compete for retailers
Industry experts are considering CitrusAd, which was acquired last year by ad agency holding group Publicis Groupe and collapsed into its data arm Epsilon, Criteo’s closest competitor. Over the past few years, CitrusAd has hired several top Criteo executives, including Colleen Cassin and Christina Fonseca, to build relationships with major consumer brands and retailers. Meanwhile, former GroupM veteran hired Brian Gleason as CRO in February, who has deep relationships with agencies and brands.
“CitrusAd and Criteo compete so fiercely to attract more retailers because they want to grow the network and the number of brands they appeal to,” Jeff Coleman, group VP of marketplace channels at advertising agency Tinuiti, previously told Insider.
CitrusAd goes after Criteo’s major retailers. For example, Criteo has long sold search ads for Macy’s, but Macy’s started testing CitrusAd for the same service in 2020. Criteo had the upper hand this summer: A spokesperson for Macy’s said the retailer is phasing out testing with CitrusAd and that Criteo remains its main partner.
Both CitrusAd and Criteo have had a tear to attract new retailers. CitrusAd’s recent wins include Albertsons, Carrefour, GoPuff and Cub Foods. Criteo’s recent wins include Deliveroo, Best Buy and Michaels.
Retail adtech companies charge retailers and advertisers a fee to manage the buying and selling of ads. One way CitrusAd wins customers in is by showing the fees it charges retailers, according to advertising industry experts. They said advertisers and retailers alike complain that Criteo doesn’t disclose its fees when it runs a campaign.
“CitrusAd used [fees] like the guillotine to try to cut them off,” an e-commerce agency exec previously told Insider.
Brian Gleason, Criteo’s Chief Revenue Officer, previously told Insider that the company is at the forefront of its pricing model: Retailers pay a flat fee to use Criteo’s technology, and Criteo takes a portion of the ad sales sold by its team. Insider was unable to find out how much both companies charge.
But retailers still want more transparency in Criteo’s fees. For example, Target’s advertising company Roundel tests both Criteo and CitrusAd. It’s rare for a retailer to partner with competing adtech companies, experts say. These experts believe that Target works with both companies to determine which company collects higher fees. Target did not respond when previously asked for comment.
“It’s a bit of a hunger game to sort out the fees,” a second e-commerce agency previously told Insider. “There’s really no differentiated product — if people find out one is cheaper than the other, they’ll all go there.”
Adtech companies launch new products for retailers
But Criteo and CitrusAd have raced to differentiate their technologies.
Criteo’s technology has moved beyond search ads to include display ads and ads that appear off the retailer’s site. This year, Criteo launched a demand-side platform that allows advertisers to run programmatic campaigns across the web. And CitrusAd combined with Epsilon, owned by Publicis, to enable programmatic advertising for retailers.
“That should make it a lot more competitive with Criteo,” Andrew Lipsman, chief analyst at research firm and Insider’s sister company Insider Intelligence, previously said.
Both companies are working to give advertisers real-time campaign data and granular control over their campaigns.
A third executive at an e-commerce agency said earlier that CitrusAd is further ahead than Criteo in developing these tools. For example, an advertiser can set up a campaign via CitrusAd that promotes one product on the site of one retailer. The person said replicating the same campaign through Criteo is more complicated.
Criteo’s Gleason previously said that brands often want to reach customers from multiple retailers.
Not all retailers outsource their advertising activities, creating more competition with Criteo
Criteo also faces competition from retailers themselves. Some retailers don’t want Criteo or CitrusAd to manage their ad businesses and use licensing technology to build ad businesses that they manage themselves.
For example, Sam’s Club and Albertsons are moving their ad units indoors, leveraging adtech startups like Microsoft-owned PromoteIQ and startup Kevel. Home Depot and Kroger use PromoteIQ’s technology to power their advertising business. Retailers can also manage their advertising activities with Kevel’s pay-as-you-go software.
Kevel CEO James Avery is betting on more retailers housing their advertising business, one of the reasons the company bought Velocidi in June, a technology company that helps retailers manage e-commerce data such as purchase information.
“We see companies wanting to own their platforms and keep more advertising money with their own sales and account managers,” he had told Insider.