3 Problems Criteo’s Incoming CEO Must Solve

Criteo’s new CEO has his work cut out for him.

When Michael Komasinski takes over for Megan Clarken on Feb. 15, the executive will be faced with a unique set of challenges.

When Clarken became CEO in 2019, retail media was a considerably smaller space with fewer players involved. While Clarken successfully moved part of Criteo’s business into retail media and away from retargeting, Criteo now has significantly more competition as retail media has become a booming sector with every retailer, agency, and adtech company wanting a piece of the market.

The industry is also facing slower growth, holding company shakeups, increased M&A action, and the reality that Criteo’s revenue still largely comes from cookie-dependent retargeting. Retail media represents 22% of Criteo’s revenue.

Criteo is the largest independent adtech player in retail media with a market cap of $2.1 billion at the time of publishing this article.

Multiple analysts and experts that ADWEEK spoke to raised a central question about Komasinski’s hire: What’s Criteo’s endgame? How Komasinski shepherds the firm through these challenges could help bring that into focus.

“There are massive growth opportunities in media today with new advancements in AI and a global rise in ecommerce, which are driving hyper-personalized consumer touchpoints across more content and devices than ever before,” Komasinski said in a statement announcing his appointment. “[Criteo] has built incredible assets in AI over the years to deliver compelling commerce solutions for our clients and drive shareholder value.”

Criteo did not respond to a request for additional comment.

Ad holding companies are drawing lines over retail media

Fresh off of five years at Dentsu, Komasinski brings an agency perspective to Criteo that could serve the firm well as M&A action shifts the dynamics between retail adtech firms and holding companies.

“Most in the [retail media network] space are looking to improve agency partnerships,” one agency executive told ADWEEK. “Criteo has been ahead there.”

Omnicom’s proposed takeover of IPG, announced in December, would cluster more retail media tech into the combined holding company thanks to a series of acquisitions including Flywheel, Acxiom, and Intelligence Node.

If the deal goes through, analysts and experts previously told ADWEEK that the IPG-Omnicom retail media business would have a more competitive edge against Publicis Groupe, which has also invested heavily in retail media tech acquisitions over the last several years.

With more mergers and acquisitions predicted throughout 2025, Komasinski could help to foster agency relationships at a critical moment for Criteo.

“We don’t yet know Criteo’s long-term ambition,” Dan Maguire, director of retail media at Gale, told ADWEEK. “Is it to become another CitrusAd? Mars? Flywheel?”

Retail media growth is slowing

While retail media spend is projected to hit $60 billion this year, according to Emarketer, growth has begun to slow.

“Retail media growth is slowing due to some of the largest players reaching saturation on their owned properties,” Sarah Marzano, principal analyst at Emarketer, told ADWEEK.

At the same time, the retail media space is becoming more crowded. Retailers and ecommerce businesses are continuing to launch new ad businesses, while adtech companies are emerging or pivoting to solve the challenges advertisers face when juggling dozens—if not hundreds—of different retail media networks.

Amazon, for example, is launching a new product that will help retailers stand up advertising businesses and find potential advertisers. Up until now, Amazon has solely sold ads on behalf of itself.

“For the long-tail retail media networks to find success, they must overcome advertiser gripes with navigating a fragmented landscape,” Marzano said. “If Criteo can position itself as a salve for retail media networks and advertisers seeking efficiency and scale it will carve out a valuable role in the future growth of retail media.”

Slower growth could also bring more M&A action to retail media, noted Andrew Lipsman, independent retail media analyst.

“There is likely to be consolidation [and] aggregation of retail media networks over the next couple years as many come to terms with the fact that they’re not independently viable,” Lipsman said. “Criteo is well-positioned for this tailwind.”

Most of Criteo’s business still relies on cookies

While Clarken has shepherded Criteo into the era of retail media, powering 225 retail media programs for companies like Target, JCPenney, and Walgreens, the majority of the company’s revenue comes from cookie-dependent ad retargeting.

One of Komasinski’s challenges will be to scale up revenue from retail media as the industry moves away from cookies.

“Criteo’s performance will increasingly depend on its ability to successfully diversify beyond cookie-reliant retargeting,” Marzano said. “Looking ahead we can expect a continued focus on retail media and other privacy-focused solutions, but there may be a period where overall top-line growth is subdued.”