Is it better for Criteo to focus on expanding our advertiser base or improving existing client performance?

Introduction

The trade-off between expanding Criteo's advertiser base and improving existing client performance is a critical strategic decision. This scenario involves balancing growth with optimization, which directly impacts our revenue and market position. I'll analyze this trade-off by examining key metrics, stakeholder impacts, and potential outcomes to provide a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Criteo's primary business model is still retargeting ads. Has this changed recently, or are we exploring new ad formats?

Why it matters: Impacts the focus of our expansion or optimization efforts Expected answer: Still primarily retargeting, but exploring new formats Impact: Would influence whether we prioritize new advertiser acquisition or existing client optimization

• Business Context: How does our current revenue split between new and existing advertisers? Are we seeing diminishing returns in either area?

Why it matters: Helps identify where we have the most growth potential Expected answer: 70% from existing, 30% from new; slight diminishing returns from existing Impact: Might lean towards expansion if new advertiser acquisition is more efficient

• User Impact: What's the current advertiser satisfaction rate, and how does it compare to industry benchmarks?

Why it matters: Indicates whether we need to focus more on retention and performance improvement Expected answer: Slightly below industry average Impact: Could prioritize improving existing client performance if satisfaction is low

• Technical: Do we have the infrastructure to support a significant increase in advertisers without compromising performance?

Why it matters: Ensures we can maintain quality while expanding Expected answer: Current infrastructure can handle 30% growth Impact: Might limit aggressive expansion plans if infrastructure needs upgrading

• Resource: What's our current team capacity for onboarding new advertisers vs. optimizing campaigns?

Why it matters: Determines if we have the resources to execute either strategy effectively Expected answer: Balanced, but slightly more capacity in optimization team Impact: Could influence which strategy we prioritize based on current team strengths