No industry has had more of an impact on business in the last few years than internet technology. Technology is responsible for a new revolution, changing the foundations upon which organizations are run. In this series of blog posts, we explore the Criteo Engine, what it means for the teams, looking at the pricing recommendation, the need for speed in data science and infrastructure, digging into what makes the Criteo difference for our clients.
The Criteo Engine Part 1: The Heart of the Engine
Since the beginning, Criteo has always based its success on its unique technology that powers more than 3 billion ads per day, and which generated more than 1.5 billion clicks in 2014 for over 7,000 advertisers around the world. This technology, known today as the Criteo Engine, has gone through years of R&D to reach its current level of sophistication. Jean-Baptiste (JB) Rudelle, CEO, has described its function as making display perform like search on a worldwide scale.
At first, the Criteo concept was a bit of a crazy gamble, according to co-founder and scientific advisor Franck Le Ouay, “We said to ourselves, ‘we’re no more stupid than anyone else, and if we work hard to put our ideas into practice, we’ll do better than the others no matter our competition.’”
In actuality, the initial idea of a film recommendation site with an audience voting system was a flop. “We had a promising technology but were operating in the wrong market without customers,” explains Le Ouay, who was twenty-seven at the time.
The process of actually building the engine was both lengthy and complex. Having moved on from the movie site, the founding team produced a recommendation site for ecommerce platforms… and failed again. However, the foundation for today’s Criteo Engine had been laid.
“On every iteration, we learned something new,” says Le Ouay.
By the end of 2007, the team realized that the real opportunity was in driving customers to the sites externally. Criteo’s founders decided to place their recommendations outside of the target site, and conducted their first test for PriceMinister with inventory bought on the Skyrock blog network.
A problem arose immediately, according to Franck Le Ouay: “10,000 Euros spent on buying space only generated 3,000 Euros in income.”
Still, they learned a valuable lesson from the Skyrock test: “80% of revenue was coming from 15% of the PriceMinister customers. We further examined the behavior of that 15% by conducting tests using standard and customized banners, and observed a 500% increase in the click-through rate from the custom banners.” Criteo had taken off. “We moved to sign as many publishers in as little time as possible, in order to develop the best technology we could.”
The current Criteo Engine consists of four blocks:
- Prediction and recommendation
- Real-time operations and purchases
- Computer processes
- Customization and dynamic creation
Every time an ad is displayed, a sequence of events takes place over the course of just a few milliseconds in which each block of the Engine is engaged. These steps are vital to the ad’s success, and are continuously being improved upon in order to reach the highest possible level of performance.