The cases for and against The Trade Desk buying Criteo

By Seb Joseph

Criteo is up for sale, and there’s only one company that keeps coming up as a likely acquirer: The Trade Desk. A deal would give The Trade Desk real skin in the retail media game. But an agreement of this magnitude is also tinged with risk. There are reasons for executives at both companies to be wary of a potential deal.

Among them are today’s macroeconomic uncertainty, Criteo’s reliance on third-party cookies and depressed ad tech valuations, which bode ill for Criteo’s prospects, said Nikhil Lai, a senior analyst at Forrester. “Nonetheless, Criteo’s profitability and the network effects of its commerce media platform, which now features roughly 175 retailers and 1,800 brands, are significant,” Lai said.

Here is are the cases for and against a potential blockbuster deal between The Trade Desk and Criteo:

The case for The Trade Desk acquiring Criteo

It’s difficult to remember any deal in ad tech — real or not — that had as many things going for it as this potential one does. Here are just a few reasons that spring to mind:

The Trade Desk works mainly with agencies, Criteo doesn’t.
Both parties have experienced management teams, top engineering teams and, more importantly, are adept at attracting talent.
The Trade Desk tends to be used by upper-funnel advertisers, whereas Criteo is the preserve of lower-funnel performance campaigns.

Criteo is streets ahead of The Trade Desk when it comes to retail media.
Criteo has a ton of purchase and conversion data.
Unlike The Trade Desk, Criteo has a more defined and diversified business outside of the U.S., meaning its mooted acquirer could have better exposure to new markets as a result of a deal.
Oh, and don’t forget that Criteo owns IPONWEB, a company that happens to power pretty much every ad tech company in some way, shape or form.

And perhaps most importantly, Criteo has shown it can consistently turn ad dollars into free cash flow — which is no mean feat.

With so many cases for the deal, it’s no wonder that the smart money is on The Trade Desk swooping in on Criteo. If the bet pays off, then The Trade Desk goes from being a point solution to an end-to-end marketing stack that spans the breadth and depth of the programmatic market, from sell-side through to the buy-side, connected TV to retail media.

That last area in particular is intriguing because of what it could do to an already promising part of the ad tech firm. Yes, the CTV narrative is the one The Trade Desk has hinged its growth story on for the last few years, but what if the new, better narrative and more profitable growth area is retail media?

“On retail media there are huge gains for the Trade Desk not just when it comes to using Criteo technology to enable advertisers to buy sponsored products ads on retailer sites, but also when it comes to audience extension, or when those same retailers allow advertisers to find their customers on third-party sites and apps,” …read more

Source:: Digiday