So here we go with my first post about internet start ups. I am not sure yet weather I like their product. But the idea behind it is certainly very clever. What I like about the system is that this kind of advertising is impossible in an offline world. So someone understood what you can do in an online world and created a business model around it. This alone will probably give them quite a bit of success.
What is the idea?
Recently I was searching for a book a friend recommended to me. I wasn’t sure weather I wanted to buy or not. So I did what anyone would probably do. I left the store keeping in mind that I could later decide weather I want to spend the money. Today – about one week later – I was searching for something completely different browsing on a website and realized the advertising of the exact same book by a store I visited before. Interestingly the web shop was a German one and the ad was displayed on an English speaking American website. That was kind of scary. So what happened here? I was looking at the source code and figured out that Criteo (not Google!) is running the Ad server behind it. A quick scan on their homepage lead to the following video:
I think the idea is very clear. The problem with this issue as usual is privacy so let’s dig into it.
privacy concerns of Criteo
As we saw on the video the whole system works – as we could have guessed – by setting a cookie.
The privacy of this service is much higher or better than Facebook. So if you are using Facebook without fear you shouldn’t be afraid of Criteo’s retargeting advertising system.
How will this change the online ad market?
Google could easily install a similar ad system. There are probably several good reasons not to do it.
- Adsense is running very good and Google has the competitive advantage of being market leader.
- Customers have to be on your web shop first before you can retarget the product.
- Due to the more efficient advertising conversion rates will probably rise. If the cost for the advertisement stays constant the publisher (Google and their publishers network) would loose on its profit margin.
The last one is exactly where I see a competitive threat to the Googleconomy. The advertising is more efficient. If I was an advertiser. i would most certainly give it a try. The problem with this system is that it is hard to use with new products.
The whole discussion leads to the question why doesn’t Amazon install a similar system? They have a huge knowledge about customers interest and a wide network of publishers in their partner program. It would be easy to deliver highly targeted ads and improve the user experience and conversion rates of their affiliate program. I guess Amazon is concerned about privacy. Also Amazon is the market leader. So obviously they are not doing to many mistakes.
What is your oppinion about this startup and their product?