EuroBusiness Media (EBM): Commerce marketing technology company Criteo has just announced its second quarter results for 2017. I'm joined by Criteo’s CEO Eric Eichmann. Eric, thanks for being with us. It’s been another strong quarter for Criteo. Can you tell us a bit more about that?
Eric Eichmann: Absolutely! Indeed we had another great quarter of profitable growth. We exceeded our guidance for the 15th consecutive quarter. Revenue ex-TAC grew 34%. We added 950 new clients in the quarter while maintaining client retention at 90%. Same client Revenue ex-TAC accelerated to 17%, while adjusted EBITDA grew 42%. And we generated $33 million of free cash flow.
EBM: So what do you think were the main drivers behind the success?
Eric Eichmann: Three key drivers. And they were: innovation, broader access to inventory, and new clients.
First, in innovation, we delivered on our roadmap. In the Engine, we added new variables to our bidding and creative layers and drove performance improvements of approximately 5%.
Criteo User Device Graph grew in size and efficiency. We continue to augment our data set with 3rd-party data to improve identification of users across devices and environments. 76% of our Revenue ex-TAC now comes from users matched in the graph. And clients can see more sales on average coming from our user device graph, about 10% more sales.
And we are testing new product initiatives with promising results: app install campaigns, that drive an average 7% performance uplift for clients, CRM onboarding which allows the uploading of offline and online CRM data to run online campaigns, and Store to Web retargeting campaigns to drive store visitors to shop online.
EBM: And tell us a little bit more about those other two drivers you mentioned.
Eric Eichmann: With respect to inventory, we launched Criteo Direct Bidder, our header bidding technology, in May and are now connected to over 450 publishers worldwide. With this technology, we help publishers increase monetization by 20-40%.
Native inventory continues to be a significant driver, now representing over 25% of our business.
And in video, we continued to develop and expand our ad format, which we deployed to about 1,000 of our Tier 1 and midmarket clients.
Finally, with respect to client additions, we added 950 net new clients and closed the quarter with over 16,000 clients.
EBM: Now you have just announced the Commerce Marketing Ecosystem. Can you tell us a little bit more about that?
Eric Eichmann: Absolutely! Retailers and brands are facing many challenges in a disrupted commerce landscape. To help them overcome these challenges, we intend to build the highest performing and open commerce marketing ecosystem.
Four pillars support this ecosystem: 1. actionable data that provides granular shopper intent and purchasing history, 2. integrated commerce marketing technology to drive sales and profits. Scale, number three, maximizing performance and reach across the shopper’s online journey, and 4. large pooled assets built through collaboration and data sharing among participants.
Openness, transparency, security and fairness are the cornerstones of our ecosystem, where every participant gets more than what they contribute.
Given how disrupted today’s commerce landscape is, now is the right time to act for retailers and brands. We believe we are the ideal commerce marketing partner for them in this highly dynamic market
EBM: With that in mind, what are your priorities for the second half of this year?
Eric Eichmann: For the second half of 2017 we remain focused on the same set of priorities.
First, innovate on the core product and expand our core business worldwide.
Second, scale Criteo Sponsored Products across markets and integrate it with the Criteo technology.
Third, continue to assess the market potential for Criteo Predictive Search.
Fourth, build and leverage our pooled assets to benefit our entire ecosystem: the Criteo User Device Graph, the Criteo Shopper Product Graph, and Criteo’s Measurement Network.
And fifth, develop, test, and launch compelling new products such as app installs, store-to-web retargeting campaigns and CRM onboarding for brands and retailers
EBM: So all in all, it’s been another great quarter for you, hasn’t it?
Eric Eichmann: Yes! And I'm pleased with our Q2 performance delivering sustained profitable growth and cash flow thanks to good execution on our plans.
Going forward, we see exciting avenues of growth as we build the highest performing and open commerce marketing ecosystem for retailers and brands.
EBM: Eric Eichmann, Criteo's CEO, thank you very much for joining us.
Eric Eichmann: Thank you for having me.
