Eric Eichmann, Criteo's chief executive officer, on the upcoming GDPR, and why Apple’s ITP concerns are ‘nothing new.’
Criteo reported better than expected results earlier this week, with the France-based adtech company’s share price recovering significantly from its tumble after it issued guidance to investors noting the potential impact of the toll out of Apple’s Intelligent Tracking Prevention.
Criteo posted bumper results for 2017, reporting a year-on-year revenue increase of 28% to reach $2.2bn – showing growth amid concerns from analysts that its success would be dented by Apple's roll out of privacy features in its web browser, plus the impending General Data Protection Regulations (GDPR).
Total global revenue for the final quarter of 2017 was a record $674m, a 19% increase on the $567m the firm clocked up in the same period last year. The Q4 turnover also demonstrated growth on Q3 where revenue had sat at $564m.
“What happened in Q4 last year was that we had a stronger than expected period, particularly in the US,” explains Eichmann, speaking with The Drum post the financial disclosure.
What helped spur this was some of the more recent additions to its portfolio such as Sponsored Products, which came via way of its HookLogic acquisition, and grew at twice the rate of its overall business, with the addition of new publishers to its customer base.
“It was a smaller number [of gains] than in prior quarters, but in that segment we went after larger customers, so the net effect was positive,” he says.
Previous disclosures to the market over its abilities to cope with ITP have caused a wobble among investor confidence in Criteo – resulting in a drop as much as 20% before the turn of the year.
However, Eichmann remains nonchalant when this is raised, arguing that technologies that limit coverage on the [Apple-owned] web browser Safari are not new.”
He adds: “In December we did provide a worse case scenario, and it was never intended to be a guidance, or an expected outcome for 2018. I think that people just assume the worst of what can happen purely because we’re in adtech. That’s unfortunate, but it is what it is.”
Discussing the wider issue of adblocking, which is what Apple’s latest Safari update effectively becomes for ad retargeters, he does recall its guidance that Apple’s latest OS update will have “an 8-10% impact on Safari users”.
“My expectation is that we’ll continue to see this, and have to work on this forever,” he says, adding that Google’s latest Chrome Filtering update, which also gives it more adblocking potent, is not a concern.
Likewise, Criteo has also been bullish on the upcoming GDPR legislation across the EU. While most were quick to assume that asking users for express permission to track their online movements, Eichmann and Criteo, which built its reputation on ad retargeting, will be covered by the ‘legitimate interest.’
“We work on behalf of our customers, and they have a legitimate interest to use the data that is left on their site to better target for marketing activities. GDPR is not saying that marketing activities are not legitimate,” he says.
For Eichmann, the bigger issue is what the upcoming legislation means for browser information that the legislation isn’t classified as non-sensitive data under the legislation. This type of information will need a specific opt-in, and at present, there is much conversation out there, he asserts.
“For a lot of retailers that’s a worry, as they now have a lot of sensitive information, and while they’re not supposed to be IP experts, they need to protect, and there’s also an incentive for hackers break into their system,” he says.
For as of May 25, data controllers and processors, as a line of demarcation the legislation will use to distinguish between companies, will have to ward off such threats from hackers who could compromise them, and then blackmail them or else threaten to leak to authorities – who can subsequently fine them up to 4% of their annual revenue.
“That’s nerve-racking for these guys, but in terms of the relationship with us, it really doesn’t get affected. We need to make sure that we’re talking to these guys, and have a common understanding of what it means,” he adds.