Criteo sees a $42 billion opportunity from retail media, but must solve a challenge that could cut those revenues by 20%

• Criteo is eyeing a $42 billion slice of the retail media market.
• A glut of retail media networks could reduce that $42 billion retail media opportunity by 20%.
• Criteo released an ad buying platform that brings those networks together.

The public adtech company Criteo has spent the past few years carving out a significant niche for itself in the surging retail media market, estimated to be worth $110 billion this year, according to Boston Consulting Group.

Criteo has put in motion a plan to capitalize on $42 billion of revenue within that market — the part that’s not owned by Amazon or based in China — the company said during an event held in New York City Tuesday. Sixty to 70% of that will come from new media budgets, Criteo said during its presentation.

“Let’s go make that $42 billion real,” said company chief revenue officer Brian Gleason on stage. Criteo has long helped individual retailers like Macy’s, Michael’s, and Ulta sell ads and plans to make $1.4 billion in revenue from that business by 2025, the company had said at an investor presentation last year.

But the big threat the retail media market faces, Criteo CEO Megan Clarken said on stage, is that advertisers have to buy from each retailer individually. Criteo said that this type of “fragmentation” could cause retail media revenues to drop 20%.

So Criteo released on Tuesday an ad buying platform to help advertisers purchase those ads across its retail media network, which includes 210 companies.

“You’ve got so many retail media networks bubbling up that for individual advertisers, there’s a challenge to buy across all the different disparate networks,” said Andrew Lipsman, principal analyst at Insider’s sister company Insider Intelligence.

He said brands will often buy across three or four individual retail media networks, which means smaller retail media networks can struggle to attract advertising dollars.

“You can see how it gets difficult if you’re a mid-tier player to have brands actually invest,” Lipsman said.

Gap, for instance, shuttered its retail media program roughly a year after introducing it.

Even as Criteo seeks to unite retail media networks under its technology, it faces stiffening competition from smaller upstarts as well as established adtech firms like The Trade Desk, which helped build Walmart’s ad-buying platform. The Trade Desk’s CEO Jeff Green has previously announced his ambition to control “most” of the retail media market and it has aggressively sought partnerships to prove that retail ads drive sales, to inspire more advertisers to buy retail media.

The Trade Desk is potentially the biggest competitor to Criteo in grabbing retail media market share, as an April report from Morgan Stanley hailed the two companies as the biggest winners in owning the retail media market, outside of Amazon.