STATE OF

Ad Tech 2019
Global
Executive Summary and Intro

Since AT&T debuted a campaign with the very irst banner ad in 1994, the Read on to discover:
world of advertising has never been the same. With the advent of advertising
technology, new channels and devices started to ofer diferent ways for 1 The Ad-Tech landscape
advertisers to connect with customers.

From the pop-up-happy 90s to Google’s debut in 1998 and Facebook’s 2 The Art & Science of Conversion
launch in 2004, there has been one clear direction for ad-tech:
personalization. But how are advertisers working toward that direction? And
3 The Secrets to Re-Engagement
what is the state of ad-tech going to be in 2019 and beyond?

In this report, we’ll be diving into exclusive research indings from our work 4 The Ad Platform for the Open Internet
with research irm Euromonitor International on our survey, “Acquire, Convert,
Re-engage.” We spoke with 901 marketers around the globe about how they
convert customers today - and what works best..
The Current Ad-Tech Landscape 1 2 3 4

Today, more than 3.5 billion people are regular Internet

users. Online is now the second largest and fastest growing
ad spend channel in the world, accounting for 34% of total 1 More Ecommerce Companies Become Ad Companies.
ad spend in 2017. Soon, it will overtake global ad spend on
TV.

Our research projects that by 2022, there will be 4.66 billion

internet users in the world and 56% will have two or more
connected devices.

The world is digital. The majority of people will have multiple 2 Transparency, Transparency, Transparency.
devices. So you’d think it would be easy for advertisers to
reach their target consumers. But ad-tech has never been
more complicated. Here’s what we see for the top 2019 ad-
tech trends:

3 Ads Won’t Advertise, They’ll Tell Stories.

THE CURRENT AD-TECH LANDSCAPE
1 2 3 4
Top 2019 Ad-Tech Trends

1 More Ecommerce Companies Become Ad Companies.

Ecommerce giant Alibaba is often referred to as an ad company, instead

of an ecommerce company. That’s because 60% of the company’s revenue
actually comes from ads, not the products sold. Amazon’s ad business is
growing massively – with expected growth of 55% in 2019 alone, according
to J.P. Morgan.

In 2019, ecommerce companies will continue to rethink how brand

partnerships and product placements work together. CPM will take a front
seat next year. Through sophisticated technology, it’s possible to maximize
revenue from all the visitors to an ecommerce website, even if they don’t
buy – as long as retailers can show brands that those impressions are
valuable.
THE CURRENT AD-TECH LANDSCAPE
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Top 2019 Ad-Tech Trends

2 Transparency, Transparency, Transparency.

Marketers want to know where their ads are being placed. They want to How can you personalize content but ensure customer data is secure? How
know which ads are working and how much revenue each ad contributes. can you know that a partner is using your ad dollars to create the best
Consumers want to know how their data is used. Publishers want to know possible campaigns?
how audiences interact with the ads on their websites and how much
revenue is really being generated for partners. All of these issues are at the forefront of the industry. New solutions,
strategies, and partnerships will happen next year as companies work on
Wherever you are in the ad-tech ecosystem, you probably want more adapting to this new reality.
transparency. As the big tech players keep consolidating – and building
higher walls – it’s hard to really dive into the details on ad performance.

With the passage of GDPR and more privacy laws on the way, we know
that transparency, privacy, and security are intertwined. Ads are at the
center of the storm.
THE CURRENT AD-TECH LANDSCAPE
1 2 3 4
Top 2019 Ad-Tech Trends

3 Ads Won’t Advertise, They’ll Tell Stories.

When we look at the success of direct-to-consumer companies like Away,

Harry’s, and Warby Parker, it’s not the product that grabs our attention – it’s
the story. By matching quality product with a unique and shareable story,
these companies have carved out a niche in the market.

Consumers can get great discounts anywhere on the Internet. Ads need to
be personalized to the point of telling a story to the individual consumer.
That means creating a full funnel ad experience – through data.

Great ads will matter more than ever, but especially those that understand
a customer’s needs and tell a great story through product and content. The
best ads in 2019 won’t sell. They will entertain, educate, and inspire.
THE CURRENT AD-TECH LANDSCAPE
1 2 3 4
Ad-Tech by the Numbers

Global Adspend in *USD billion

200 191
185
183 177 178

166

148
You don’t have to look much further than our research on 150

overall spending habits to understand how prominent digital 121

has become. Around the world, ad spend on online tactics 102

95
increased at a CAGR of 14.6% from 2014-2017. 100 91
89

50
35 36 35
32 33 32 33 34

0
ONLINE OUTDOOR PRINT RADIO TV

2014 2015 2016 2017

*Constant exchange rate applied

Source: Euromonitor International Passport - Economies and Consumers, 2018 Edition
THE CURRENT AD-TECH LANDSCAPE
1 2 3 4
Ad-Tech by the Numbers

7+4+309
Marketing Budget Allocation by Activities, N=901
Ailiate
Marketing
Paid Display
(41% is with Retargeting)
Landing
Page / Website 9%
16%
When it comes to tactics, marketers are spending the most 9%
on paid display. Social media ad spend is increasing as well.
Search
Globally, 16% of marketing budgets went to paid display, with Social Media
Advertising (PPC) 9% 14%
41% of that budget spent on retargeting. The second highest Marketing

share of ad spend (14%) went to social media. Traditional

marketing (TV, Print, and Radio) takes up 13% of marketing 9%
budgets, as TV remains a major channel across the globe. SEO 2
13%
10%
10%
Traditional
Marketing 1
Content
Marketing
Email
1 - Print, Direct Mail, TV, Radio Ads
Marketing 2 - Search Engine Optimization

Source: “Acquire, Convert, Re-engage,” Euromonitor & Criteo, 2018

THE CURRENT AD-TECH LANDSCAPE
1 2 3 4
The Awareness-Consideration-Conversion Methodology

All of these marketing tactics are meant to build customer relationships throughout the shopper journey.
At Criteo, we deine this by the “Awareness, Consideration, Conversion” methodology.

Each phase has its own objectives. For awareness, marketers

Standard full funnel framework
need to think about how to maximize reach and views. During
the consideration phase, the focus turns to traic. Are you getting
the right audience to the right product pages? Are you seeing
Awareness Consideration Conversion
noticeable increases in app installs and engagement?

Finally, during the conversion phase, marketers track sales across Traic Web sales
Audience Reach
each channel. App installs App sales
Objectives Views
App engagement In-Store sales

There’s a fourth part to this methodology for retailers:

monetization. This is where marketers start to think about revenue
Monetize
based on web audience and partners.

In our study with Euromonitor, we dug into the details around Retail
Revenue per click Revenue per impression
Objectives
conversion campaigns.
 1 2 3 4

The Art & Science of Conversion

A conversion can happen in an instant or it can happen over the course of a few months.

That’s also why it can be a challenge to deine a methodology for conversion tracking.
Unlike measuring web traic, conversion campaigns can’t be measured by looking at just
one marketing vehicle. With a variety of tactics across channels that can all contribute to a
conversion, it’s also hard to measure which tactics are bringing the highest ROI.

What we found is that marketers distribute their budgets across 10 primary channels. They face
diferent challenges across the board, but shared with us some of their strategies for success.
 1 2 3 4

Unifying fragmented data

Multiple teams and multiple systems means fragmented data. As marketers use so many diferent channels and tools
to execute conversion campaigns, it becomes diicult to keep everything uniied. Without a single view of what’s
happening on a customer level, marketers can’t link conversions to the advertising driving those conversions.

Difficulty in measuring the return on investment

Our survey found that marketers
worldwide experience these
Attribution is a challenge for conversion campaigns. Marketers must balance the competing demands of generating
three challenges when running high ROI while managing ad spend costs. The difusion of ad spend across channels makes it hard to calculate a
conversion campaigns: clear ROI.

Connecting online and in-store shopper data

With today’s shopper journey often starting in-store and ending online — or vice versa — conversion campaigns aren’t
really about targeting one group over the other. It’s about having a uniied view of both. Trends like in-store pick up
and same-day delivery make it easy for shoppers to move in either direction. The most efective conversion campaigns
can target a customer who starts looking in a store, and then decides to buy on their phone later in the day.
THE ART & SCIENCE OF CONVERSION
1 2 3 4
The Conversion Tactics that Work

Top 4 Channels Used for Conversion

(% of marketers using given channel in their campaigns)

When we asked about the most commonly used tactics

1 Social Media Marketing (53%)
for conversion campaigns, marketers pointed to social
media marketing. Paid display and email weren’t far
behind. SEO was the fourth most popular. 2 Paid Display Advertising (43%)

3 Email Marketing (41%)

4 Search Engine Optimization (SEO) (38%)

Source: “Acquire, Convert, Re-engage,” Euromonitor & Criteo, 2018, N=796

 1 2 3 4

1 Maximize ad placement quality.

Strategies for Success

Globally, marketers told us they have their

two top strategies for success:
2 Provide compelling and unique offers.
THE ART & SCIENCE OF CONVERSION
1 2 3 4
Strategies for Success

1 Maximize ad placement quality.

For marketers everywhere, it doesn’t matter how good your ads are if
they’re not seen. According to global marketers, having high quality ad
placements is key to conversion campaigns. In APAC, leather goods brand
Bellroy makes sure their banners appear on top regional newspapers, which
over-index for their target audience, a person in-market for a new wallet.
THE ART & SCIENCE OF CONVERSION
1 2 3 4
Strategies for Success

2 Provide compelling and unique offers.

Marketers said that ongoing campaigns with compelling ofers is one of

the surest ways to maximize revenue at the conversion stage. These ofers
should go beyond the basics, such as sign-up discounts, and focus on linking
the ofer to limited-time promotions. Australian skin-care brand Asarai’s
summer 25% of event and Sephora’s “Beauty Appreciation” event are both
examples of using targeted, timely ofers to driving additional sales from
brand-preferring consumers.
 THE ART & SCIENCE OF CONVERSION
1 2 3 4
Want to really figure out how to fix fragmented data,
get stakeholder buy-in, and measure ROI?

Start by deining the objective that matters to you. Marketers worldwide told us that there is no
one true metric when measuring conversion. The top ten listed were:
Conversion campaigns are as much about attribution
as they are about sales numbers. Without being able
New revenue 35% to show which channels and tactics really move the

New customer rate 33%

needle, marketers won’t be able to secure the budget
or stakeholder buy-in that they need. When you have
Cost per action (CPA) 30%
the proper tools and partners in place to measure
Total revenue 29% data-driven attribution, then you can rest assured that

Cost per qualiied visit 29%

your marketing dollars are being well-spent.

New visitor rate 27%

Conversion rate to action 27%

Conversion rate to purchase 25%

Cost of sales (COS) 24%

Customer lifetime value (LTV) 23%

Source: “Acquire, Convert, Re-engage,” Euromonitor & Criteo, 2018, N=796

 1 2 3 4

The Secrets to
Re-engagement Research shows the success rate of selling to an existing customer is between 60-70%,
while that of selling to a new customer is 5-20%. Also, returning customers can bring in
up to two-thirds of your brand’s profits.

When we surveyed marketers about re-engagement, Marketers indicated that campaign KPIs depend on the type of campaign. For

we focused a lot on mobile tactics. It’s the part example, an app-rengagement campaign might focus on driving a new qualiied visit

of the sales funnel where your customers, already from a lapsed user. An app-repurchase campaign might focus on in-app post-click
conversion rate.
familiar with your brand and products can become
brand advocates and loyal customers.
THE SECRETS TO RE-ENGAGEMENT
1 2 3 4
The US Leads in All Three Campaign Types

% of Marketer with Targeted Campaign for

83%

Our research found that while globally, over 60% of 75%

72%
75%

68% 68%
marketers ran three type of re-engagement campaigns, the 67%
65%
61% 62% 62%
US leads all other markets in all three campaign types.
51%

Additionally, we found that pureplay online companies

are ahead of brick-and-mortar companies in terms of
re-engagement activities. Online-only businesses need to
be more active digitally, whereas a business with brick-
and-mortar locations may focus on marketing initiatives for
in-store campaigns.

APP RE-ENGAGEMENT APP RE-ACTIVATION REPEAT PURCHASE

EU WORLD APAC USA

Source: “Acquire, Convert, Re-engage,” Euromonitor & Criteo, 2018, N=901 (Global), N=551 (APAC), N=150 (EU), N=100 (USA)
THE SECRETS TO RE-ENGAGEMENT
1 2 3 4
Metrics Used to Measure Re-engagement Success

Globally, marketers measured re-engagement success using the following metrics:

App Re-Engagement App Re-Activation Repeat Purchase

1. New Customer Rate 1. Sales growth 1. Sales Growth

2. Total Revenue 2. Total Revenue 2. Total Revenue

3. New Visitor Rate 3. New Revenue 3. Repeat Customer Sales

Source: “Acquire, Convert, Re-engage”, Euromonitor & Criteo, 2018, N=601 (App Re-Engagement), N=558 (App Re-Activation), N=653 (Repeat Purchase)
THE SECRETS TO RE-ENGAGEMENT
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The Challenges of Re-engagement Campaigns

Why aren’t more marketers investing heavily in re-engagement campaigns?

Here is what respondents said when we asked:

App Re-Engagement App Re-Activation Repeat Purchase

1. Lapsed users are diicult

1. Limited channels available 1. Limited channels available
to re-engage

2. Data available is limited or 2. Lapsed users have lower 2. Diicult to measure ROI in
has quality issues conversion rates a meaningful way

3. Existing customers not keen 3. Lapsed users have lower 3. Limited or stale
to switch channels average order values irst-party data

Source: “Acquire, Convert, Re-engage”, Euromonitor & Criteo, 2018, N=601 (App Re-engagement), N=558 (App Re-activation), N=653 (Repeat Purchase)
THE SECRETS TO RE-ENGAGEMENT
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The Re-Engagement Tactics that Work

So how do marketers solve re-engagement challenges?

Respondents pointed toward tactics like compelling discounts, high quality ad copy, and targeting prospects at the right time and place:

App Downloads App Re-Activation Repeat Purchase

Ofer compelling discounts Ofer compelling discounts Ofer compelling discounts

Target prospects at the right Target prospects at the right

Deliver high quality ad copy
time and place time and place

Deliver personalized ads Make ads visually appealing Deliver personalized ads

Source: “Acquire, Convert, Re-engage”, Euromonitor & Criteo, 2018, N=601 (App Re-Engagement), N=558 (App Re-Activation), N=653 (Repeat Purchase)
THE SECRETS TO RE-ENGAGEMENT
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The Re-Engagement Tactics that Work

For app downloads, app re-activations, and repeat purchase

campaigns, global marketers say that ofering compelling
discounts comes irst.

OTA Expedia and Expedia Japan encourage mobile browsers

to download or re-activate the Expedia app with app-
exclusive discounts of up to 40% versus what a shopper might
ind on the mobile or desktop site.
THE SECRETS TO RE-ENGAGEMENT
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The Re-Engagement Tactics that Work

Rideshare app Lyft sends email campaigns that, when clicked,

open directly in the app to get riders to activate the ofer as
well as become active in the app again.
THE SECRETS TO RE-ENGAGEMENT
1 2 3 4
The Re-Engagement Tactics that Work

Beauty retailer Dermstore follows up with customers with a

personalized request for a product review and an ofer of
membership points that can be applied to a future purchase.
THE SECRETS TO RE-ENGAGEMENT
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The Re-Engagement Tactics that Work

Korean online grocery and CPG retailer Homeplus encourages

repeat purchases by ofering prominent ads with a strong
promotion just as shoppers visit their mobile site. Ad clickers
are directly routed to the Homeplus app, which is aware of
the promotion.
 1 2 3 4

The Ad Platform for the Open Internet

Every tactic in our survey goes back to data. And, in turn, personalization. As marketers,
we know that personalized ads are efective. As more marketing budgets go digital
around the world, personalization has to get more sophisticated.

That’s why the biggest tech giants today do so well. With massive amounts of data, it’s
easy to create an individual experience for every shopper at every touchpoint. Most other
companies can’t collect or activate the data on that scale. But, by working across the
Open Internet, it’s possible.
 THE AD PLATFORM FOR THE OPEN INTERNET
1 2 3 4
Advertiser and Consumer Benefits

The Ad-Tech Ecosystem of the Open Internet ofers value to

consumers and companies of every size. No one business controls
the market, so consumers get more choices. Advertisers get more
lexibility, and publishers get more control. Consumers

In efect, the Open Internet allows for a diversity of ideas and

• Creatives
innovations that drive opportunity for all, instead of distributing • Consent Management
power and control to just the big players. • Direct Interactions

We’ve tried to build a foundation for the Open Internet with the
Criteo Ad Platform.

When companies work with the Criteo Ad Platform, their Advertisers Publishers
advertising campaigns are powered by data from 1.4 billion active
• Performance • Performance
shoppers and more than $615 billion in annual sales transactions.
• Transparency • Direct access
That amount of data allows ads to be extremely personalized • Automation
and extremely intelligent – and allows companies to own the • Self-Service
relationships with their customers from start to inish.
THE AD PLATFORM FOR THE OPEN INTERNET
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Advertiser and Consumer Benefits

Advertisers beneit from performance, transparency, automation and

self-service: They can control their ads, see who’s being targeted,
and better manage the process from start to inish when deploying
Active on the Open Internet
on the Open Internet.

Consumers beneit from higher quality ads which directly support the
publisher community responsible for the zero-cost content enjoyed
by all. They also have a much stronger, more direct relationship with
1 18,000+ retailers and brands
brands and retailers.

Publishers, too, beneit from enhanced performance – maximizing

ROI – while getting direct access to their audiences instead of 2 1000s of publishers
depending on third parties to show content across the ecosystem.
That means a more predictable and stable environment.

Criteo has already come a long way in building the Open Internet. 3 1.4 billion active monthly shoppers
We were founded on the principles that everyone should have an
equal opportunity across the ad-tech ecosystem.

The Open Internet means transparency, diversity, and opportunity.

When we think about how digital ads are going to be the future of
the Internet, we want that future to be open.
About Criteo
Criteo (NASDAQ: CRTO) is the advertising platform of the open Internet, an ecosystem that favors neutrality,

transparency and inclusiveness. 2,700 Criteo team members partner with over 18,000 customers and thousands of

publishers around the globe to deliver effective advertising across all channels, by applying advanced machine

learning to unparalleled data sets. Criteo empowers companies of all sizes with the technology they need to better

know and serve their customers. For more information, please visit www.criteo.com.