In the online advertising world, one of the hottest trends right now is what is known as ad retargeting. The idea is simple. When you visit a retailer’s or other advertiser’s Website, it drops a cookie on your browser and the next time it sees you pop up on another site it loads an ad from that retailer. You’ve already expressed interest in that advertiser by visiting their site, so they retarget you whenever they can. It may sound a bit stalkerish, but trust me, everyone is doing it.
One startup in particular claims to do it better than anyone else, a French company called Criteo. CEO JB Rudelle says Criteo is the dominant retargeting ad network in Europe, and now he wants to dominate the U.S. He’s already moved his corporate offices from Paris to Palo Alto, and now he just raised $7 million in a C round from Bessemer, which took the entire round. Bessemer partner Byron Deeter will join the board. The last time he raised money was from Index Ventures in 2008. This last round brings his total capital raised to $24 million.
He doesn’t really need the money. Criteo already employs 140 people worldwide, operates two large data centers in the U.S., and is profitable, says Rudelle. Unlike most other ad retargeting technologies, Criteo puts its money where it’s mouth is and charges on a cost-per-click basis. No clicks, no money. It buys up ad inventory on an CPM basis (per impression) and sells on a CPS basis (per click). “The conversion rate is similar to paid search,” he says of Criteo’s retargeted display ads. Retargeted ads are typically clicked on four times more than a traditional run-of-site banner ad, he estimates.
“We see on average someone needs to visit 5 times before buying anything,” says Rudelle. “We show them in the banner either exactly the product they were looking at or similar product they are likely to buy or complementary products.” For e-commerce advertisers Criteo takes a feed of their catalog and creates new banner ads on the fly populated with the right image, price and a deep link to that product page on the retailer’s site. Each ad is unique for each target consumer.
So go ahead and make your French Resistance jokes if you want to, Rudelle is laughing all the way to the bank.