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Criteo Q4 2018 earnings: Amazon is a bright spot after Apple challenges

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2018 was a tough year for French ad-tech company Criteo.

Two main challenges threatened to shake up Criteo’s business: Europe’s General Data Protection Regulation law and Apple banning third parties from tracking and targeting web cookies for more than 24 hours with a feature called Intelligent Tracking Prevention (ITP).

Those two moves were blows to Criteo’s core business of retargeting digital ads to consumers after they look at specific products on retailers’ websites and apps.

Faced with those challenges, Criteo’s fourth-quarter revenue decreased 1% year-over-year to generate $670 million. The decline is an improvement over the third quarter year-over-year dip of 6%, but Criteo’s Q4 revenue is particularly concerning because retailers tend to pump money into retargeting during the holidays. For all of 2018, Criteo’s revenue grew a scant 0.2% to $2.3 billion.

Read more: Europe’s looming privacy law GDPR may hand an advertising opportunity to two unexpected players

CEO JB Rudelle, said the company did better than expected in the quarter, though he acknowledged the headwinds of the past year.

“We’re entering 2019 with a good velocity where we feel that the worst is behind us,” he told Business Insider, speaking ahead of the earnings release. “We had a difficult year last year. The guidance we’ve been giving for 2019 is pointing to the right direction, with a modest but positive growth for the first quarter and acceleration further down the road.”

Amazon is growing its ad business, and it could actually be good for Criteo

Amazon continues to grow its advertising business aggressively, particularly in its demand-side-platform (DSP) business that places targeted ads on websites outside of Amazon. Marketers are keeping an eye on the programmatic-like ad network because it uses Amazon’s lucrative first-party data to serve ads.

In getting brands’ ad dollars, Amazon is taking share from big retailers like grocery or department stores that typically get ad dollars when they run digital promotions for brands that sell products in their stores or sites through shopper-marketing programs. For example, retailers like Walmart and Target have long had media businesses that that place brands’ ads on their own and other websites.

But matching Amazon’s resources and power is hard for retailers, which has opened a new group of customers to Criteo. The firm reported it had 19,500 retailers and brands as clients during the fourth-quarter of 2018, up 7% year-over-year, with client retention rates around 90%.

Criteo is talking to most of the big US retailers about how they can fend off Amazon and better monetize their audiences to brands, Rudelle said.

One trend Criteo saw in the fourth quarter was an uptick in European retailers offering heavy discounts on Black Friday, adopting a tradition among US retailers that slash prices during Thanksgiving week.

“Two or three years ago, there was no Black Friday in Europe,” he said. “We expect that this is going to be a lasting phenomenon in the coming years to the point where Black Friday is even bigger than the pre-Christmas peak.”

GDPR was a blow to marketers’ data, but it’s getting ‘smoother’

In May, the European Union rolled out GDPR, a sweeping law that requires publishers and advertisers to get explicit permission from consumers to collect their data to use in serving and targeting ads.

Ad-tech companies like Criteo and publishers scrambled to establish privacy and data policies that met the requirements of GDPR, causing some US-focused publications like Tribune Publishing’s Chicago Tribune and USA Today to block their websites or offer ad-light versions of their websites in Europe.

Eight months into the law, Rudelle said that the fourth quarter was much smoother regarding GDPR than Q3. “We are getting into more of a steady mode where most players are now implementing the guidelines.”

A fraction of marketers used tactics like wiping out European versions of websites or loading sites with multiple forms to collect data consent, Rudelle said, calling those tactics “a bit too aggressive and not necessarily user-friendly.”

As to the impact of Apple’s ITP, Criteo has adjusted by shifting focus to on in-app ads and away from the mobile web advertising that Apple was targeting.

“It was a big wake-up call to realize that we should not be too dependent on cookies, because suddenly a player like Apple could change the rules of the game in quite a brutal way,” Rudelle said.

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More groups join in support of women in STEM program at Carleton

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OTTAWA — Major companies and government partners are lending their support to Carleton University’s newly established Women in Engineering and Information Technology Program.

The list of supporters includes Mississauga-based construction company EllisDon.

The latest to announce their support for the program also include BlackBerry QNX, CIRA (Canadian Internet Registration Authority), Ericsson, Nokia, Solace, Trend Micro, the Canadian Nuclear Safety Commission, CGI, Gastops, Leonardo DRS, Lockheed Martin Canada, Amdocs and Ross.

The program is officially set to launch this September.

It is being led by Carleton’s Faculty of Engineering and Design with the goal of establishing meaningful partnerships in support of women in STEM.  

The program will host events for women students to build relationships with industry and government partners, create mentorship opportunities, as well as establish a special fund to support allies at Carleton in meeting equity, diversity and inclusion goals.

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VR tech to revolutionize commercial driver training

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Serious Labs seems to have found a way from tragedy to triumph? The Edmonton-based firm designs and manufactures virtual reality simulators to standardize training programs for operators of heavy equipment such as aerial lifts, cranes, forklifts, and commercial trucks. These simulators enable operators to acquire and practice operational skills for the job safety and efficiency in a risk-free virtual environment so they can work more safely and efficiently.

The 2018 Humboldt bus catastrophe sent shock waves across the industry. The tragedy highlighted the need for standardized commercial driver training and testing. It also contributed to the acceleration of the federal government implementing a Mandatory Entry-Level Training (MELT) program for Class 1 & 2 drivers currently being adopted across Canada. MELT is a much more rigorous standard that promotes safety and in-depth practice for new drivers.

Enter Serious Labs. By proposing to harness the power of virtual reality (VR), Serious Labs has earned considerable funding to develop a VR commercial truck driving simulator.

The Government of Alberta has awarded $1 million, and Emissions Reduction Alberta (ERA) is contributing an additional $2 million for the simulator development. Commercial deployment is estimated to begin in 2024, with the simulator to be made available across Canada and the United States, and with the Alberta Motor Transport Association (AMTA) helping to provide simulator tests to certify that driver trainees have attained the appropriate standard. West Tech Report recently took the opportunity to chat with Serious Labs CEO, Jim Colvin, about the environmental and labour benefits of VR Driver Training, as well as the unique way that Colvin went from angel investor to CEO of the company.

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Next-Gen Tech Company Pops on New Cover Detection Test

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While the world comes out of the initial stages of the pandemic, COVID-19 will be continue to be a threat for some time to come. Companies, such as Zen Graphene, are working on ways to detect the virus and its variants and are on the forefronts of technology.

Nanotechnology firm ZEN Graphene Solutions Ltd. (TSX-Venture:ZEN) (OTCPK:ZENYF), is working to develop technology to help detect the COVID-19 virus and its variants. The firm signed an exclusive agreement with McMaster University to be the global commercializing partner for a newly developed aptamer-based, SARS-CoV-2 rapid detection technology.

This patent-pending technology uses clinical samples from patients and was funded by the Canadian Institutes of Health Research. The test is considered extremely accurate, scalable, saliva-based, affordable, and provides results in under 10 minutes.

Shares were trading up over 5% to $3.07 in early afternoon trade.

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