Criteo reports Q2 beat with commerce media growth

Criteo reported on Wednesday its second-quarter earnings that once again beat analyst estimates and its own guidance.

Why it matters: The ad tech company's transition from an ad retargeting business into commerce media has gone favorably, fueled in part by acquisitions and opening up the potential for more.

By the numbers: Criteo reported contribution ex-TAC (traffic acquisition costs) of $240 million compared to estimates of $231 million and last quarter guidance of between $228 million and $234 million.

• Criteo now partners with about 210 retailers and 2,400 brands, a bump of about 100 for each compared to last quarter.

Details: CEO Megan Clarken tells Axios that Criteo has completed its commerce media platform, releasing its supply-side platform this quarter and planning to release its demand-side platform more widely next quarter.

• Clarken has repeatedly said the commerce media business has a $110 billion total addressable market and sees Criteo as the go-to platform.
• "That takes some time to get there," Clarken says. "We're right at the inflection point where clients are coming onboard the platform, starting to light up the commerce media opportunity, and we're moving with them."

The intrigue: Last quarter, Clarken said she believed Criteo was about halfway through a six-year transformation. That started when Clarken joined in November 2019 with more momentum in early 2020 when Google announced it would end support for third-party cookies.

• Criteo's acquisitions of Mabaya in 2021 and Iponweb in 2022 have helped support its push into commerce media. Clarken attributed the Iponweb deal to dragging down quarterly net income into losses but said it's been a "fantastic and strategic acquisition" that has to "play itself out."

What we're watching: Criteo and Integral Ad Science announced a partnership last month to measure the effectiveness of retail media campaigns.

• "What's really important in the world of commerce media is that it proves itself to brands," Clarken says. "Brands can't look at it just in isolation. They have to compare it to their spend on other platforms — on search and on social, on retail, on display."