Criteo Retail Media

What is Retail Media Network

From the beginning of online advertising network, it’s already been more than 10 years. There’s seems no exciting product emerging within last few years in the industry. However, there’s a niche industry within online advertisement industry rising quietly. In recent years, more and more retailers realize that besise the produt sales, they can initialize another revenue stream by monetizing their own traffic. In such case, the retail media network came out as a niche in the online advertisement industry. As it’s called, the retail media network is to sell placements on the ecommerce website to the product sellers. This is exactly the same as Amazon, JD.com, Alibaba , etc. are doing to sell their website traffic inventory to the onboarding sellers or brands. We call those giant ecommerce platforms the top tier players in the market. They’ve already built holistic solution platform to monetize their website traffic inventories. Such solution is quantified with a key indicator which is called takerate. This is the expense that sellers need to spend on the platform based on its sales on it. However, most lower-tiered ecommerce players are not monetizing their traffic inventory thoroughly

How’s the Retail Media Market

According to report the RMN(short of Retail Media Network) market is about 18 billion USD and it’s expected to grow to double till end of 2030. The growth is quite amazing. Nowadays, Amazon is undoubtedly the main player of the market. It’s taken 3.4 B within the total cake. In the contrast, other players are holding undeveloped golden mines. Take Walmart as example. Walmart is the largest retailer in US, however, it’s only holding retail media revenue much lower than Amazon.
Hence, there are many platforms pending for development in the RMN area to help them increase revenue projection with brand new revenue stream. To satisfy such requirement, the players in the online marketing industry began to provide technical solutions those traditional retailers.

How’s Criteo in the market

Criteo is veteran in the online advertising industry. It’s providing DSP services to the market for almost 10 years. However, the market keeps shrinking recently. The tradition DSPs need to figure out way to survive. To build owned SSP network is one way but it’s not easy as it was at the beginning since more and more budget goes to top tier players like Google and Meta. The other players are short of budget to convince inventory owners to share inventory with them. However, Criteo targeted a niche market of SSP which is retail media network. Besides ecommerce giants like Amazon, there are many more retailers start their ecommerce business. Unlike Amazon who has strength to build advertisement platform in house, most of such retailers can’t build and maintain such platform by themselves. Hence, the opportunity for Criteo is coming. With their existing SaaS platform, they extended SSP service to the retail media monetization market. For the time now, Walmart, target , CVS, etc. are all clients of Criteo to sell their online inventory via Criteo Retail Media Platform. To use the SaaS platform, retailers don’t need to pay Criteo for the service. In the opposite, Criteo will pay the retailers with inventory sale income. They are adopting revenue share for most of inventory. For some special placement,retailers can negotiate the price with Criteo for adhoc demand.The Ad format includes search, product list, banner display, video, etc. . The charge type can be CPC and CPM via Criteo platform when brands buying the inventory.
Why do retailers will to share the inventory with Criteo ? In my opinion, here are some reasons.

• It’s expensive to maintain such platform in house. Traditional retailers prefer introducing mature solution in the market to save budget in short run and save time cost.
• Criteo is now serving a great group of demand clients. Many brands and agencies are buying inventory from Criteo. In such case, the advertisement spend is not the thing to be worried about by retailers.
• First party data become more valuable due to the privacy policy grows more and more strict in different regions.
• Criteo can provide a one-in-all platform for both retailers and brands.For the retailers they can buy traffic from Criteo and monetize the same group of users. With the consolidated platform, retailers can operate their marketing budget more efficiently. For the brand, it’s always their dream to compare marketing budget on different inventory on the same platform. In such case, any brands can evaluate their product sales and market budget across different retail platforms.
  All above are the pain points of both retail platforms and sellers/brands. Criteo took its position in the market by providing typical functions and share the revenue with inventory providers.

Conclusion

RMN is a newly emerging niche market of SSP market. The market is far from its ceiling. Besides Amazon, other online retailers are holding take rate much lower than Amazon which means there is a huge space to develop and considerable set of revenue stream for each of the ecommerce platforms. Such should be a more promising way for the tradition DSP company to survive in the competitive market.