EuroBusiness Media (EBM): Criteo, the performance marketing technology company has just announced its fourth quarter results. I'm joined by CEO Eric Eichmann, thanks to being with us. So growth was strong for 2016. Tell us about your main achievements.
Eric Eichmann: So 2016 was a terrific year for Criteo. First of all, we strengthened our position in building a performance marketing platform for brands and commerce companies. A couple highlights of 2016: first off, we grew revenue 36% to $ 1.8 bn and we did this while increasing profitability by 57% for the EBITDA side to $ 225 m. Couple of things on the client side. We grew the clients by 4,000 clients over the year. This is a record for us. We ended the year at 14,000 clients and we did this while maintaining retention at over 90%. And this is, think about this, we grew the client base by over 42%. So a very big achievement. We also had a terrific year from a mobile perspective, over 50% of revenue ex-TAC was achieved on mobile and we ended the year over 60%. So we saw an acceleration of mobile revenue ex-TAC towards the end of the year. It was also a transformational year for us in that we launched two very big products or two lines of businesses if you will. One is the acquisition of HookLogic, the product is now called Criteo Sponsored Products and also the launch of a search product, Criteo Predictive Search, and we did this on the innovation end while we were also continuing to innovate on the core engine. And last but not least we grew our employee base to over 2,500 and importantly, we grew our R&D employees by more than 50% to over 600 people.
EBM: I'm focusing specifically on Q4. What were the main drivers of growth in the quarter?
Eric Eichmann: So Q4 was a terrific quarter for us. We had a number of drivers along three big dimensions. First from a technology perspective. We continued to innovate on the engine side. We launched two new big features that were important, one is on the creative side. We have what we call Kinetic Design features that now allow us on the fly to build over 17 trillion ad combinations that are specifically personalized to the person that receives the ad. That was an important part of the deployment on the technology side. We also deployed and started to sort of working with customers and what we call value optimization for the engine which instead of optimizing on the sales now optimizes on the margins of products. Also on the technology side we continued to deploy our cross-device solutions so now 73% of our clients work with us on Universal Match and now 60% of the revenue is generated from users that are matched through our technology. So very exciting on that front. And then finally on the mobile side, we saw a significant number of sales coming from mobile, over 63% and of those, 24% of the overall sales of the company came from advertising on app. So that was the technology side then on the supply side we continued to make good progress with native advertising, it now represents about 30% of the revenue ex-TAC of the company, our own solution is now live with over five hundred publishers. We also deployed in latest stages of Q4 our own header bidding solution. That's a beta, a test that we're going throug, and assuming that all goes well we'll be deploying this more broadly in Q2. And finally also, we continued to have a very strong relationship with Facebook and now clients that connect with us to Facebook are generating a 60% of lift in sales. So that's very positive and finally, the third aspect is clients. We continue to add clients, we added more than 1,500 clients for the quarter, a new record for us that includes Criteo Sponsored Products - formerly HookLogic - clients that we've added and, of course, we added clients both on the mid-market side and on the Tier 1 side and now mid-market that grew about 75% now represents over 30% of the business. Importantly for the quarter existing accounts saw a growth of revenue ex-TAC of 20% which obviously comes from the supply and technology improvement that we made. So, very very positive quarter for us.
EBM: Growth accelerated in the United States. Can you tell us what was behind that growth?
Eric Eichmann: Indeed, the acceleration was terrific. We saw about 35% growth in revenue ex-Tac in the U. S. That was powered by a couple of things. One, a very strong holiday season. Two, we added a number of Tier 1 large clients that we actually launched in Q4 and that was very positive for us and finally we saw a big acceleration of app advertising and the U.S. now for us is the largest app market in the world. A couple of other things in the U. S. that we're very excited about: one is Criteo Predictive Search. It was launched in the U.S. and it's seeing a lot of interest from advertisers, from retailers in the U. S. That's very positive. And with the acquisition of HookLogic, Criteo Sponsored Products are seeing a lot of momentum.
EBM: So, let's focus now on 2017. What will your main focus be?
Eric Eichmann: So five key priorities for us in 2017 which is announcing itself as a terrific year for Criteo. Number one is to continue to innovate on our core offering, dynamic retargeting, and drive worldwide expansion. We have still a significant opportunity around our core product and we need to continue to develop that. Number two is expand Criteo Sponsored Products across the world (formerly HookLogic). Lots of momentum around this. We want to expand it not just continue to expand it the U. S., but also in key European markets and then integrate Criteo's technology into that offering so that we can have a better performance for it. Number three is to introduce Criteo Predictive Search in key markets this year. Number four is to continue to build and leverage pooled assets. They are becoming very important for our clients, this is the ability to take the scale of Criteo across all of its advertisers and bring that scale and that power to individual advertisers. And so that manifests itself to products like our cross-device graph or Universal Match, the universal catalog that we're building but also the ability for brands to be able to see where sales are happening across the network of retailers that we have, so you know, CPG companies or manufacturers can then see that because we have a large network of retailers. So that's number four. And then finally number five is continuing to innovate and bring new products to market. So, things that we are working on: our customer prospecting which sort of addresses the higher end of the funnel, not just lower funnel products but upper final products; the ability to do on-boarding for CRM databases for our retailers. This is the ability to take the CRM databases that they have offline, upload ad, identify who the online identities are and then serve ads based on that and alternatively also see what the impact of online campaigns have on offline sales. And finally an exciting area is potentially a video product that would allow us to take advantage of that new marketing channel. So 2017 looks like a terrific year again.
EBM: Thank you very much Eric.
Eric Eichmann: Thank you.
