Yesterday (4 November) performance marketing technology company Criteo reported record results for the third quarter, ended 30 September, 2015. Benoit Fouilland, CFO and deputy CEO, Criteo, spoke exclusively to ExchangeWire about how innovation is driving the growth of retargeting spend and how ad blocking is really an opportunity for differentiation. Facebook also reported strong results after mammoth milestone of one billion logins in a single day. With exclusive insight from Justin Taylor, UK MD, Teads; Darren Khan, managing director of Genero; and Adnan Ebrahim, CEO and founder of Car Throttle. 

For the first time in Criteo’s history, Revenue exceeded €1bn on a last 12-month basis to reaching €1.1bn.

Financial Highlights

– Revenue in the third quarter 2015 increased 54% (or 46% at constant currency) to €299m, compared with €194m in the third quarter 2014.

– Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, in the third quarter 2015 grew 55% (or 47% at constant currency) to €120m, compared with €78m in the third quarter 2014.

– Net income in the third quarter 2015 was €5m, compared with €11m in the third quarter 2014.

– Adjusted EBITDA for the third quarter 2015 was €31m, an increase of 58% (or 55% at constant currency), compared with €20m in the third quarter 2014.

– The Americas represented over 36% of global Revenue ex-TAC in the third quarter 2015.

– EMEA represented 43% of global Revenue ex-TAC in the third quarter 2015.

– Asia-Pacific represented approximately 21% of global Revenue ex-TAC in the third quarter 2015.

– Revenue ex-TAC margin in the third quarter 2015 was 40.2%, in line with prior quarters.

In an exclusive interview with ExchangeWire, Benoit Fouilland, CFO and Deputy CEO, Criteo (pictured right), described the third quarter results as "very solid" and commented that the company's "continuous investment in technology is paying off". Fouilland also credited innovation as a key driver of the growth of existing clients.

“We’re happy that 90% of our clients use our multi-screen solution”, said JB Rudelle, co-founder & CEO, “and are excited about the rapid adoption of our 'Universal Match' cross-device solution”.

Business Highlights

– Criteo added over 720 net clients in Q3 2015, while maintaining client retention rate at over 90%.

– In September 2015, 90% of clients were using Criteo's multi-screen solution.

– Clients that were live in both Q3 2014 and Q3 2015 spent more, resulting in over 21% more revenue ex-TAC at constant currency from these clients compared with the prior-year period.

– As of September, over two-thirds of clients were sharing anonymised CRM data with Criteo.

– Over 1,500 of Criteo's advertisers were live on Facebook mobile via an integration with dynamic product ads as of 30 September.

– In September, close to 40% of Revenue ex-TAC was generated from clients using enhanced Criteo's Dynamic Creative Optimisation platform.

Fouilland told ExchangeWire: "The mid-market is a strategic area of growth and an area where we are gaining a lot of new customers." He continued: "We have been growing very fast as a company for the last few quarters, we are a very global company, considering our size."

Speaking about what keeps him up at night, Fouilland said that "continuing to find the right talent is critical" and that "continuing to execute at the right pace" is critical to the ongoing success of the performance marketing company.

Ad blocking is widely seen as a threat to the digital marketing industry. Consumers are electing to install software that prevents ads from being served in rebellion to the "clutter" of ads that all too often spoils the user experience. When asked if he sees ad blocking as a threat to the industry, Fouilland was positive about Criteo's position in the market, he said: "Users do not want to be interrupted by ads. With respect to our business, it is the contrary, we provide users with non-intrusive, relevant ads. We get paid only if we create engagement. We have a business model that is aligned with the interests of the user. We see an opportunity for differentiation in the marketplace because of the concern that users are expressing. We believe that players who have the right expertise can make a difference."

Strong results from Facebook after mammoth milestone of one billion logins in a single day

Facebook also reported financial results yesterday for the quarter ended 30 September, 2015.

"We had a good quarter and got a lot done", said Mark Zuckerberg, Facebook founder and CEO. "We're focused on innovating and investing for the long term to serve our community and connect the entire world."

Financial Highlights       

– Mobile advertising revenue represented approximately 78% of advertising revenue for the third quarter of 2015, up from 66% of advertising revenue in the third quarter of 2014.

– Capital expenditures for the third quarter of 2015 were USD$780m.

– Cash, cash equivalents, and marketable securities were USD$15.83bn at the end of the third quarter of 2015.

– Free cash flow for the third quarter of 2015 was USD$1.41bn.

Source: Facebook

Business Highlights

– Daily active users (DAUs) - DAUs were 1.01 billion on average for September 2015, an increase of 17% year-on-year.

– Mobile DAUs - Mobile DAUs were 894 million on average for September 2015, an increase of 27% year-on-year.

– Monthly active users (MAUs) - MAUs were 1.55 billion as of 30 September, 2015, an increase of 14% year-on-year.

– Mobile MAUs - Mobile MAUs were 1.39 billion as of 30 September, 2015, an increase of 23% year-on-year

Globally, Facebook's average revenue per user (from advertising) is USD$2.83. However, there is significant variation across different markets (see below). It is clear to see that the majority of advertising revenue is coming from the US and Canada.

Source: Facebook

Justin Taylor, UK MD Teads, (pictured left) said: "It’s been another strong quarter for Facebook – not only did it hit a mammoth milestone of one billion logins in a single day, but has seen continued revenue growth, especially in video. With figures from the IAB showing total UK video ad spend reached £292m in H1 2015, it is no wonder that Facebook wants to secure a significant slice of this ever-expanding pie.

"Yet, for brands and advertisers who have carefully honed their creative, the social network is still unable to provide a premium advertising environment but relies on user-generated content. While Facebook has tried to encourage media companies to post more content directly onto the site through Instant Articles, premium news sites are still the home of the very best writing and journalism.

Brands don’t just want their creative seen by a lot of people, but by the right people in the right context. That's why many clients are combining social campaigns with video ad spots on the sites of premium publishers. The introduction of outstream video ad formats is opening up vast swathes of new premium inventory on these sites to fulfil demand and they will continue to be a popular choice for brands seeking both scale and safety."

Darren Khan, (pictured left) managing director of music video and brand video production company Genero said: “Facebook’s strong results are indicative of a huge increase in ad spend, partially due to Instagram, which has opened itself up to a much wider range of advertisers. Mobile ad revenue plays a huge part, and the wider implications that this has for the creative advertising sector are really exciting. Rich media is a clear focus for marketers and the increased demand for video content means more work for filmmakers. In order to keep up with the trends, marketing budgets are going to have to be expanded. Brands are also going to have to find new ways to source quality content, cost-effectively, which means that we are likely to see a surge of innovative tech platforms in the digital space to facilitate this demand."

Adnan Ebrahim, CEO and founder of specialist car publication Car Throttle (pictured left) said: "Facebook’s strong earnings performance for Q3 appear to be driven by monetisation of Instagram and push of video, pre-roll and long-form formats for advertisers, which now have more prominence in-feed.

"Our own data from our biggest page, Car Throttle, with 1.8 million fans, shows on average video posts get six-times more reach than link posts, three-times more reach than image posts, showing strong weighting by Facebook in favour of video content. Facebook continues to grow as a video business and competitor to YouTube, we saw 10 million YouTube video views versus 186 million Facebook video views in October 2015.

"However, whilst Facebook is a valuable source of traffic, publishers shouldn’t over-rely on Facebook to drive traffic, as an over-supply of content means reach will inevitably drop. Therefore, for publishers, the only way to sustain and build traffic is to increase click-through rates on link posts, a hard task when Facebook has made its site so attractive to stay on."