Criteo SA, the technology company specializing in digital performance marketing, is seeing robust sales as it continues to pour money into research and development aimed at fine-tuning its personalization platform.
For the trailing 12-month period, sales are up 33.2 percent to just over $2 billion, according to S&P Capital IQ, which is double its revenue for the same period in 2014. The company’s gross margin rate for the period sits at 35.5 percent while the net income margin is 3.5 percent. In its most recent quarterly report, the executive team told Wall Street it would continue to make investments in R&D.
Jonathan Opdyke, president of brand solutions at Criteo, told WWD that the focus on research is what differentiates the company. “We have 500 engineers basically working on the same problem,” he said adding that the company examines “every little aspect of that problem from how we value a customer to what products and creatives we show the customer. All to know what exactly is going to drive a person to buy.”
“Every investment that Criteo makes in technology pays right back off in revenue for the company because the way that most companies advertise with Criteo is on a performance basis,” he said. “So, if performance goes up, those people advertise more.”
In regard to the “value of customers,” Opdyke said there’s less focus on lifetime value, “and more focus on the short-term value of intent signal.”
“This is somebody who is likely to buy,” he said. “But what product are they likely to buy? Our engine works by looking at every request and information, current information we have about that customer, and then [the decision algorithm] reacts very quickly.”
Opdyke said the process is to develop “deep learning on people that have affinities for various types of styles, clothing and colors, which they tend to buy together or in sequences. So when a campaign goes out from a retailer, they’re taking advantage of that broad based knowledge and showing a much more relevant product to a much more likely to buy customer.”
The results are clear, Opdyke said. In a case study of Revolve Clothing, deploying Criteo’s platform increased conversions by 16 percent and bolstered return on advertising spend by 36 percent.
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