Welcome to the stage, Ms. Megan Clarken. Good morning everybody. It is such an honor to be here. It is such an honor to be back in Tokyo. It's been a long time that I've been away. I haven't been in Tokyo for five or six years. Prior to running Criteo, I ran Nielsen media globally, and so I was in Tokyo a lot and I have such fond memories of the people, of the team, of the clients, and of such a wonderful city, that you all live in. So I'm just so gracious to be here today. So much has happened in the last five or six years. Our world has completely changed. It's completely changed. Our world is entering a state of constant commerce,
meaning that every moment that you spend online could be a shoppable moment. For marketers, they have to work so hard to understand just how to engage with you during that moment in the time leading up to you purchasing something, while you're purchasing something, and then directly after. It's a skill. It takes a great deal of skill and it takes a great deal of precision. And so I want to talk to you about that. Today in particular, I want to talk to you about commerce media. Commerce Media is tipped to be the fourth big wave of advertising. The first wave was, in the nineties with static sites that were great vehicles to attract display advertising. We all remember that, and that led to everything that we see today. In the late nineties, we saw search, the rise of search, and that became the second wave. The vehicle to attract advertising still is huge today. In the mid two thousands, we saw the rise of social media and user-generated content
and that of course became the third wave of advertising. Fantastic platform for advertising, but we haven't really seen anything since then. The mid two thousands gaming, but not of that scale until now. With the rise of commerce media. McKinsey, the McKinsey company, recently said that they haven't seen a paradigm shift like this since the rise of programmatic. So we should talk about it. We should talk about commerce media. What is commerce media? I've heard lots of different descriptions for what it is, but let me give you mine. Commerce media is advertising on media that attracts a consumer who's on their buyer journey. So commerce media is advertising on media, a site or an app, that attracts consumers who are shopping -commerce audiences. And there's a lot of them. 73% of people say that they start
and end their buyer journey on the open internet, 73% and yet only 34% of the world's ad spend goes to the open internet. The rest, 66%, goes to search and goes to social. It is disproportionate. The reason why so much goes to search and social, those big platforms is because of their promise to reach a lot of people. And they do. And those walled gardens have demographics about those people that are very helpful to marketers. But are those people shoppers? Are they in the shopping moment? Are they in the shopping mindset? Are they looking to buy? Are they close to a point of sale? Are they close to a digital store? We would say not. And so there is a massive opportunity for the open internet as the realization of the power of commerce audiences come to life for marketers Commerce media is where precision marketing meets commerce audiences. Precision marketing being so important to make sure the right message gets the right person, but even more so now that that message gets to a consumer who is on their buyer journey. Commerce media is where artificial intelligence meets retailer data and understands about the consumer enough to make sure that finally, finally, we realize the effect of getting the right message to the right person, at the right time, on the right device.
That Minority Report moment that we've been looking for for decades is in front of us with commerce media. Early adopters of commerce media are the retailers. Now retailers have called this retail media. So, you'll hear commerce media and retail media. Retail media is a subset of commerce media. Retailers have been selling advertising for decades. They're very good at it. If you think about it, if you go into any big retailer store, you'll see advertising. You'll see sponsored ads and banners throughout the store.
You'll see these things - end caps. My favorite was always the George Clooney espresso cardboard cutout end cap. And I love the way in one aisle you'd see George and in the next style you'd see Brad Pit with De'Longhi. The end caps were so important. These things are advertising. This is where retailers sell advertising directly to brands. Brands don't pay for this advertising from their advertising budgets. They pay for this advertising through a budget that is miles bigger called their trade marketing or shopper marketing budgets. Retailers, oh sorry, brands deploy merchandisers. Merchandisers are specialists that come into the store. They understand the value of eyesight, eye level, eye line of where to place a product or an ad to get most visibility and the value of that. They understand foot traffic up and down aisles, and they understand what side of the aisle is more valuable than the other side of the aisle. This is an art and a science, but as retailers move this discipline from physical stores to digital stores, they can't use merchandising. Merchandisers, those people don't exist in the digital world, so they have to use tech. And what they use is ad tech. They use ad tech to do this job.
They need ad tech that goes a lot further than ad tech that we've seen to date. They need ad tech that is able to integrate deeply into the retailer's own data. Ad tech that integrates into their catalog data, or their SKU data, or their loyalty card data or their CRM data. They look for ad tech that is able to understand whether or not a discount is available in one geo location versus another. Or if a discount is available because a product is in stock or it isn't. You can see that this goes beyond normal ad tech. This is a discipline that ad tech now needs to be able to supply to retailers. So they need ad tech to do these things. They need ad tech that brings recommendation engine capability so that they can stay connected to the consumer. They need ad tech who's able to provide predictive analysis of what the consumer might do next. All of this is available in a digital store, not necessarily in a physical store. And that's exactly what retailers are going after. Retailers are leaning into this heavily because they see the size of the opportunity. So let me talk about that. The retail media TAM, or total addressable market by 2025 is forecasted to be $40 billion. It's a $40 billion market that is excluding Amazon and it's excluding the large etailers out of China. That $40 billion is accessible to any retailer who practices retail media, which is why we see this moment building and building from retailers. This is new money for them, it's new revenue and it's very high margin revenue. For retailers,. they're so used to seeing low margin product sales business that seeing high margin advertising business is extremely attractive to them. They also see the success of others. Amazon was here earlier. Amazon's advertising business is now over $30 billion. That is huge. They started as an etailer. They're now a media business. $30 billion is bigger than an ESPN or some of the big networks that exist. Walmart who are not digital first, they're physical retailers,
the biggest on the planet. They now have an advertising business of $4 billion. So, all of the big retailers are seeing this opportunity come their way and they're all leaning into it. Retail media is not just about what they do inside of their digital site, it's also what they're doing outside of that digital site. Let me explain that to you. If you look at Best Buy, I like using Best Buy as an example because they do this very well. Best Buy is a massive computer electronics retailer in the US. And Best Buy stocks Sony. When you walk into a Best Buy store, you'll see Sony ads all the way through the store. So they do merchandising with Sony, but it doesn't stop there. You'll see Best Buy and Sony ads outside of the store. And billboards, you'll see them on national television because Best Buy understands they can't just, they can't reach enough audience. Just the people coming into their store. To do justice to Sony they have to also extend their reach outside of that store. And that happens all the time. We see one here with P&G. I'm not sure who this retailer is,
but let me use, let me use Best Buy as an example here again. What Best Buy do with Sony in their digital store is all of their promotions and they make sure that they are in the right place when it comes to search results and they have display advertising and their digital store for Sony. But you also see Best Buy and Sony partner up on the New York Times on other publications across the open internet. Best Buy, do that to extend the reach for Sony. They do that to drive consumers back into the Best Buy store. It's very interesting because now Best Buy is an advertiser. They buy advertising and they sell advertising and they're extending those dollars out to the open internet. So we see this whole ecosystem start to emerge. I've spoken a lot about retail media. I want to zoom back out again to the broader opportunity of commerce media. I talked about retail media as being a subset, a $40 billion subset. So let's talk about the big picture, the size of how big is the commerce media total addressable market by 2025? The total addressable market is $220 billion,
from almost nothing to $220 billion by 2025. Let me put this into some sort of perspective for you. Search by 2025 will be $350 billion and social by 2025 will be $190 billion. So you can see why McKinsey were excited and you can see the momentum happening around commerce media. That is a very serious platform, $220 billion. Where does that money come from? Three places. The first one is that as more and more e-commerce sites start to create advertising opportunities, you'll see more ad inventory and you'll see marketers understand the value of that ad inventory that they get in front of people who are buying - shoppers. So that's number one. The second place, those trade marketing budgets, they are huge. So a big proportion of them will move to digital advertising from spending them inside the physical store to spending them on the digital store. And that is new money for the internet. And that is really exciting. And the third place is that as marketers start to see the results of advertising to commerce audiences, audiences who are in market to shop, we'll see a share shift from search and from social across to commerce. So, a lot of movement over the next three years towards commerce media. Very exciting marketplace. Marketers want the same thing today as they wanted yesterday and as they'll want tomorrow. They want to acquire audiences, they want to retain audiences, and they want to convert audiences for sales. Same discipline. The reason why commerce, commerce media is so attractive to them is the power of the technology and in particular the power of the data. The magic inside of commerce media is all about the data that exists. You see, in the world of commerce media, the audience has a relationship with the marketer. The audience has consented to talk to the marketer. They want to know more about the product that they bought or when another one is coming in or something that looks like that. They've opened up that dialogue. Consented. They have a loyalty card program with the retailer.
They like the store, they like the discounts. They've signed up to that they've consented. They have an opt-in or a logged in profile with the publisher. So now we have this triad of opt-in, of consented data that's available, and at the center of that consented data, at the center is the identity key. So it will be one of a number of different things it could be, but it's an identity key that is common to the ecosystem. And so with this, we build a first-party data network across the open internet. And this is being built right now. It's happening right now. The reason why this isn't an option, it has to happen and it is happening now. It is because at the end of 2024, Google will switch off the support of cookies and signals on Android and Chrome and we will all lose our memories. We won't know who we were yesterday or who we'll be tomorrow because that's all we have today is those breadcrumbs. And so it will be replaced with something better. And that is the first-party data network that exists between the buy side and the sell side with the consumer in the center, exactly where the consumer should be. With a consented relationship on each side. This is big and this is very important. Let's look at the ad tech ecosystem that exists around commerce media. It's a little bit busy. Some of these logos probably say they do some things, but maybe they don't. I'm going to predict that over the next two years, three years, this will be simplified. There'll be consolidation. Some of these players will realize they don't actually work in the commerce media space.
Because of our current macroeconomic environment, some of these players might not exist, that this page will become cleaner. And I will tell you that every single marketer that I speak to wants less tech, not more. They want less tech tax, not more.
So we'll see this consolidation happening over the next few years. For Criteo, we've been dealing with retailers now for 16 years and we've been doing specific retail media for six years. We have a relationship with 22,000 marketers and we have deep relationships with over 160 of the world's largest retailers. Deep data integrated relationships. We see about a trillion dollars worth of e-commerce flowing through our pipes and we reach over 700 billion daily active users across our supply. We are leaning into this space heavily. We're excited about it and it's obvious. I hope that you see my enthusiasm. It's obvious that this is coming at us all and we should be ready for it. Criteo is also a very open company.
We love talking, we love meeting potential partners. We love sharing knowledge. We sit in the Google Sandbox right now working with them through FloC and topics and we share our knowledge about that with the rest of the industry. And we would love to share anything that we can with you. We're open to cooperation and we're open to partnerships. There are Criteo folk here. Please feel free and comfortable to talk to us. We'll talk about anything and I think there's a Q&A coming up with me so you can ask me anything you want as well. It's been a real pleasure speaking to you. I hope this has been helpful. So thank you very much.
Thank you very much Megan for such a inspiring speech. So could we do some Q&A session for you? Thank you. Okay. Thank you. Thank you. So, okay. I'm so excited to interviewing you. Okay, so thank you for the speech. I got some question from the audience, so may I ask, so everyone knows that Criteo is a pure retargeting solution for years, but now you're focusing on transforming Criteo to a Commerce Media Platform. How did you begin this journey? Well I started three years ago at Criteo and at the time, yes, Criteo was a point solution focused on targeting and targeting is, or retargeting I should say, relies on cookies and signals to do the job. And so the company was struggling because of the technology changes. At the same time I saw that the assets, the clients, the relationship with retailers, all of this, all of these assets and our people had the ability to chase down this commerce media capability. So it's been, a matter of resetting the vision, and the strategy realigning the organization, making sure that the marketplace understands that this is the direction, the new direction for Criteo, and then executing. Just going and getting it done. It's been quite a journey. And I will add, it's been a journey in, a pandemic where, where the entire organization was at home. So it really has been a challenge, but I'm so grateful to the company for the people for making it happen. Well, you did massive work. That's amazing. And now I understand the background, but for the commerce media, what are the trends that are pushing commerce media for the industry? Like what is making it necessary for marketers to leverage now? Yeah. Well again, they see the value in commerce audiences is who better to advertise to than a person who's actually looking. Like advertising to somebody who's talking to their friends is one thing, it's fine. But if you really want to try to find efficiencies and get results, you might want to advertise to the person who's looking. And so,
that's not necessarily been accessible to marketers. But now, it's just the momentis building where they can see that there is value there and they can see that it's accessible and they can see that the retailers are leaning into it. And so this is just beginning. I see. And let me ask a deeper question, over the summer, Criteo finalized the IPONWEB acquisition. How will that deal help clients that use the Commerce Media Platform? IPONWEB's an exciting acquisition for us. IPONWEB, they really have been sort of instrumental in the ad tech space. They've built sort of the early DSPs that now have been replicated. And what we wanted from IPONWEB was a few things. One, to build the true platform means having both the DSP and the SSP and they have them both, so ready made, plug and play into the Commerce Media Platform. They have a lot of the relationships and, they move ad spend through their system, which is very valuable to us. They also have - how big is their organized 350, 350 up? You know, I'm looking at the Chief People Officer here at Criteo. They have engineers that are just, we are just so proud of the talent that we have at the company and the skilled engineers that we have around ad tech that have just seamlessly integrated into the organization. If you don't notice IPONWEB, then we've done a good job, put it that way. Okay, yes. I see. So now let me ask about the future a little bit. So what do you think the next phase of Commerce Media Platform will look like globally? It's a good question. The great thing about ad tech or technology in general is you build it once and it scales. For us, globally, it means extending out the solutions that come out of the Commerce Media Platform to each country at a time or many together. I think if I look at Japan, this market is just so exciting when it comes to the agencies that are here, the marketers that are here, the shopping behavior of people in Japan. And then the retail space here in Japan it's so exciting. As they move into their digital space and then realising the opportunity
that's available to them is having them come to Criteo and seeing what we can do to light that up for them. Okay. Yeah. Regarding Japan, I heard that you visited Japan five years ago, so after the pandemic, it's the first time you visit Japan. Did you have any learnings from meeting clients in Japan during this trip? Look, always, when I come to Japan, I learn. I learn about the market because it's the same but different. So the nuances or the little differences are just so important to us as we build out our platform. Very sophisticated, always very sophisticated, and always very keen to learn about what's going on in the rest of the world, to adopt best practice into Japan. It's no different now than it was five years ago. There's that hunger in the marketplace to learn and to grow. Yes, we are always, all of us are always hungry. Yes. And last question, I mean, to wrap up this session, maybe it's going to be a big question, but may I ask, what's the next thing for Criteo? What's the next step? Criteo is focus. It's all about focus. So, I try not to say what the next thing is because I want the company to focus on this thing. But, I will give you some insight into where we go. We're about advertising, and we understand that there are formats that are coming that have not been invented yet that we could get in front of. So, as we look to the Metaverse or as we look to even social formats and TikTok and places where advertising may look different, is the work we do to work, find out what works, and what doesn't work, to be ready for that and to make sure that we build for that, and the future of our platform. That's some of the forward thinking that we are doing. Also is this notion of of AI and Criteo has been renowned for its AI around precision marketing for as long as they've been in existence, to teach that engine, to understand a world without signals, third-party signals, to teach that system, to understand how to interact, and converse with audiences.
And how to sort of, I guess, pull an audience towards a sale or move them. Just try to sort of have a relationship with the audience as opposed to just being tech that sits behind the audience. They're the sorts of things that we look at. That's very interesting, amazing, and inspiring. Now the time is coming up, but, you have a very big luxury exhibition on the ground floor, Criteo has such a big booth. So if you haven't checked it yet, it's very gorgeous. So if you have more questions, or would like to connect with the Criteo people, you can always visit the ground floor, to talk to the Criteo people. So lastly, what do you expect for ad tech people in Japan when doing networking and business? What do you expect from them? As I said before, I hope that people are not shy. Come and talk to us and tell us about what you do, ask about what we do. The thing that's really important in our industry is openness. Often I talk about the walled gardens and I do this. And when it comes to the open internet, what's gonna make us wildly successful is if we do this, it's a little bit different, but it's a strategy that I think is a forward looking strategy and not a reverse strategy. And so, you know, we're again, the future is wide open with Criteo. You'll see that in our tagline and we really sincerely mean it. So, by all means, come and talk and learn and teach, and we'll all be better for it. Thank you very much. So please give a big applause to Megan from Criteo. Thank you so much. Thank you, Megan. Thank you very much.