The COO of Criteo shares the direction digital advertising will take, criticality of Big Data, and SEA being an engine of growth
Online ads have been undergoing a quiet little revolution lately. Where once they were confined to annoying text and image banners on websites, kept at bay through the liberal use of ad blockers, today’s ads run the gamut from sponsored Google search results and in-feed Facebook posts to in-app ads bundled with ‘free’ apps.
With over eight years of experience in digital advertising, Criteo is among the few companies globally that are poised to navigate this changing ad landscape. Having acquired mobile marketing firm Ad-X Tracking last year, Criteo has been expanding its business rapidly. It has set up an office in Singapore and acquired personalised email marketing firm Tedemis.
Here, e27 brings you an exclusive interview with Eric Eichmann, COO of Criteo. Formerly from Living Social and Rosetta Stone, Eichmann joined Criteo in April 2013 as Chief Revenue officer, in charge of growing Criteo’s earnings from its many industry verticals. Here, Eichmann shares his view on where digital advertising is headed, and the opportunities for its growth in Asia.
Continued use of Big Data and analytics
To ensure sustained engagement, ads need to be relevant to the viewer. To do so, it is important that viewers’ browsing habits be logged and analysed, with the results used to select ads that the particular viewer will be most likely to click on.
With the internet being so global, widespread and diverse, Big Data analytics is needed to make sense of this deluge of data and deliver relevant ads to each and every viewer on a page. Indeed, Eichmann shares that, using seven datacentres across four continents, Criteo crunches up to 230 terabytes of data from 120 billion requests a day.
In addition, Eichmann notes that Criteo is planning to release insights from its analyses later in the year, letting advertisers see how well viewers respond to their ads. This goes to show just how Big Data analytics has permeated the digital advertising field, and it is likely that other ad firms such as Mobileads will be investing in the infrastructure necessary for ad serving as well.
Self-learning ad engines
Of course, all the data collected is useless without a system to make sense of it. To this effect, Eichmann says that Criteo has developed its own ad engine, which consists of three sub-engines: the product recommendation engine, which recommends ads to viewers; the prediction engine, which extrapolates viewer behaviour based on their browser history, time of day etc.; and the creative optimisation engine, which presents ads in a more clickthrough-friendly format.
The interesting part about Criteo’s engine, according to Eichmann, is that it incorporates self-learning algorithms and modifies its suggestions based on changes in viewer behaviour. This lets it adapt more quickly to different markets and viewers, and increases the chances of a more relevant ad match. With such benefits to be reaped, it is a certainty that other digital advertising firms will have their own self-learning ad engines. Already, firms like Scigineer have implemented intelligent ad engines to further enhance value to their customers.
Mobile is king
One major development in digital advertising, according to Eichmann, is the rise of mobile usage around the world, where people are increasingly accessing the web from their tablets and phones. For Criteo, this has resulted in an increase in the proportion of revenue from mobile ads, from 2% in September 2013 to 10% in December 2013.
Eichmann adds that even within the mobile space, in-app advertising is set to overtake mobile web advertising, particularly with 80 per cent of the time spent on mobile devices being within an app as opposed to on the browser. To serve ads, as well as track in-app viewers, Criteo has, with Ad-X’s technology, released a mobile in-app performance display advertising solution.
As apps continue being free, with ads making up their main source of revenue, the market for in-app advertising is set to expand. It’s a given that other players in the mobile advertising realm such as MobileAds will come up with their own innovations, letting advertisers reach out to app users.
Southeast Asia as engine of growth
Finally, Eichmann believes that emerging markets, particularly Southeast Asia, will lead the growth in digital advertising, due to the relatively low proportion of e-commerce as a part of total retail transactions as compared with more developed economies. In addition, he shares that much of what works in the developed economies can be applied to the Southeast Asian market, and that Criteo is rapidly translating the lessons learnt in its work in Europe and America to improve processes in SEA.
The view that Southeast Asia is among the best regions for digital advertising is not exclusive to Criteo. For one, MicroAd has embarked on a rather aggressive expansion strategy in SEA as well. It will be interesting to see how the market plays out in the future.