Criteo sees a $42 billion opportunity from retail media, but must solve a challenge that could cut those revenues by 20%

  • Criteo is eyeing a $42 billion slice of the retail media market.
  • A glut of retail media networks could reduce that $42 billion retail media opportunity by 20%.
  • Criteo released an ad buying platform that brings those networks together.

Criteo, a publicly traded adtech company, has spent the last few years carving out a significant niche for itself in the burgeoning retail media market, which Boston Consulting Group estimates will be worth $110 billion this year.

Criteo announced a plan to capitalize on $42 billion in revenue within that market — the portion not owned by Amazon or based in China — at a New York City event on Tuesday. Criteo stated during its presentation that 60 to 70% of that will come from new media budgets.

“Let’s go make that $42 billion real,” said company CEO Brian Gleason on stage. Criteo has long assisted individual retailers such as Macy’s, Michael’s, and Ulta in selling ads, and the company expects to generate $1.4 billion in revenue from that business by 2025, according to an investor presentation last year.

The biggest threat to the retail media market, according to Criteo CEO Megan Clarken on stage, is that advertisers must buy from each retailer individually. According to Criteo, this type of “fragmentation” could result in a 20% drop in retail media revenues.

So Criteo launched an ad buying platform on Tuesday to assist advertisers in purchasing those ads across its retail media network of 210 companies.

“You’ve got so many retail media networks bubbling up that it’s difficult for individual advertisers to buy across all the different disparate networks,” said Andrew Lipsman, principal analyst at Insider Intelligence, Insider’s sister company.

He claims that brands frequently buy across three or four individual retail media networks, making it difficult for smaller retail media networks to attract advertising dollars.

“You can see how it gets difficult if you’re a mid-tier player to have brands actually invest,” Lipsman explained.

Gap, for example, discontinued its retail media program about a year after it launched.

Even as Criteo seeks to unify retail media networks through its technology, it faces stiff competition from smaller upstarts as well as established adtech firms such as The Trade Desk, which assisted in the development of Walmart’s ad-buying platform. The Trade Desk’s CEO, Jeff Green, has previously stated his desire to control “most” of the retail media market, and the company has aggressively sought partnerships to demonstrate that retail ads drive sales, in order to encourage more advertisers to purchase retail media.

The Trade Desk could be Criteo’s biggest competitor in capturing retail media market share, according to an April report from Morgan Stanley, which named the two companies as the biggest winners in owning the retail media market outside of Amazon.

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