Ad Tech's AI Nightmare: Criteo Faces Investor Dread

A palpable sense of existential dread permeated Criteo's recent quarterly earnings call. It wasn't about margins, revenue projections, or the usual fiscal minutiae. Instead, Wall Street investors brought a far more profound anxiety to the table, one whispered in the corridors of every ad tech firm: AI agents have infiltrated retail media, and no one knows what comes next.

The conversation served as a stark preview of the advertising industry's next great reckoning. For years, Criteo has been the bellwether for programmatic advertising, a public proxy for the health of the open web. Now, it has become the emblem for a terrifying new question: In a world where AI agents guide consumer discovery and purchasing, is there any room left for third-party ad tech?

The answer, as the call made painfully clear, is that nobody has one. Not the investors betting millions on the outcome, and not even the executives on the front lines. Welcome to the programmatic plug-in problem—a high-stakes debate where the future of digital commerce hangs in the balance.

The Crucible of Change: Why All Eyes Are on Criteo

To understand the weight of this moment, one must appreciate Criteo's unique position in the digital advertising ecosystem. The company has long been the canary in the coal mine for major platform shifts. When Apple introduced Intelligent Tracking Prevention, the industry watched Criteo. As Google charts its course toward third-party cookie deprecation, analysts scrutinize Criteo's every move. It is the crucible where the resilience of open-web ad tech is repeatedly tested.

This history makes the current investor anxiety all the more significant. The fear is no longer just about a browser update or a privacy policy change; it's about a fundamental rewiring of consumer behavior. The concern, as one investor articulated, is that the open web itself is doomed, with retail media vendors only slightly less so, as human buyers cede their purchasing journeys to "agentic AI channels."

This isn't a distant, theoretical threat. It's a looming paradigm shift that calls into question the very transaction flows that companies like Criteo depend on. Another investor noted "a ton of debate" on how these AI agents will disrupt the delicate dance of product discovery that has defined e-commerce for a decade. The pointed question to Criteo's leadership was clear: "Sounds like you’re kind of integrating to be part of that… [But] just philosophically, how do you see that playing out?"

The subtext was heavy with skepticism. The fear is that third-party programmatic vendors, once essential connectors in the digital marketplace, may find themselves without a socket to plug into. They risk becoming legacy hardware in a world rapidly transitioning to a new, self-contained operating system built by AI giants.

A Tale of Two Agents: Investor Speculation vs. Market Reality

The Criteo earnings call provided a fascinating, if unsettling, look into the market's current psyche. The terms "agentic AI" or "AI agents" were invoked a staggering two dozen times, painting a picture of an investor base singularly focused on this speculative future. By contrast, the words "agency" or "agencies"—referring to the traditional advertising holding companies—were mentioned just five times, and all by Criteo executives.

This disparity is incredibly revealing. It highlights a profound disconnect between Wall Street's gaze into the AI crystal ball and the tangible reality of Criteo's current business. The company's burgeoning relationships with major agency holding companies are a real, measurable, and increasingly important part of its revenue stream. This is business that exists today. Yet, the conversation was dominated by a future that is, for now, pure conjecture.

This fixation demonstrates the sheer disruptive power of the AI narrative. It has captured the imagination and stoked the fears of the market to such a degree that existing, profitable business models are being overshadowed. The debate is long on speculation and short on grounding in the present, creating a volatile environment where a company's entire value proposition is being questioned based on a future no one can yet define.

Criteo's Grand Gamble: The Affiliate Model Revival

Faced with this barrage of forward-looking anxiety, Criteo's leadership did not shrink. Instead, they laid out their strategic bet for surviving—and thriving in—the agentic age. Their proposed solution is not a radical new invention, but a revival and adaptation of one of digital marketing's oldest frameworks: the affiliate model.

Todd Parsons, Criteo's product chief, articulated this vision with clarity. "We see the affiliate model as being an underpinning to the trading that will occur regardless of the native ad format and how it might present itself," he stated. The forecast is that as AI-based agents and sophisticated new search engines become the primary conduits for commerce, they will inevitably require a standardized economic layer to manage transactions and attribute value.

In this view, the affiliate model, with its established system of percentage-based fees for driving traffic and conversions, is the perfect "clearing capability for the economics." Criteo is already acting on this belief, working to integrate its vast data feeds from merchants and retailers to better influence how and when products appear in AI-generated responses. The strategy is to become the indispensable monetization and integration partner for this new ecosystem, ensuring that publishers, retailers, and vendors all get their piece of the pie.

It's a bold and logical play. Criteo is attempting to position itself not as a competitor to AI agents, but as the essential plumbing that makes commerce within them possible at scale. It's a gamble that the fundamental principles of performance marketing will persist, even as the user interface for shopping is completely reimagined.

The OpenAI Roadblock: A Fundamental Disconnect

There is, however, a formidable obstacle standing in the way of Criteo's affiliate-driven future: the AI companies themselves. The current posture of the market leaders in agentic AI is not just uncooperative; it's philosophically opposed to the model Criteo is betting on.

OpenAI, the undisputed trailblazer in this space, offers the most glaring example. The company has been vocal and explicit in its stance: it has no affiliate program. It does not take an affiliate cut when its models send traffic that results in a sale. This isn't a feature that's "coming soon"; it appears to be a deliberate choice about its role in the information ecosystem.

The policy extends even to third-party developers building on its platform. Vendors creating custom agents or GPTs are effectively prohibited from systematically monetizing their creations with affiliate links. Doing so risks being reported and delisted from the platform. This creates a direct and immediate conflict with the affiliate-based future that Criteo envisions. The very platforms that represent the "agentic revolution" are actively closing the door on the business model ad tech hopes to use to enter.

This fundamental disconnect is the crux of the problem. While ad tech sees a commercial opportunity that can be solved with a familiar economic model, the AI giants seem to be building a different kind of ecosystem entirely, one where the lines between information retrieval and commercial transaction are intentionally blurred and not yet monetized in traditional ways.

Navigating an Unresolved Future

The Criteo earnings call, therefore, was more than just a financial report; it was a snapshot of an industry at a crossroads, staring into a fog of profound uncertainty. On one side, you have the established world of programmatic ad tech, desperately trying to map its existing tools onto a new terrain. On the other, you have the creators of that new terrain, who seem intent on writing their own rules, if they've decided on any rules at all.

The path forward remains completely unresolved. Can Criteo and its peers persuade the likes of OpenAI to embrace an affiliate or revenue-sharing model? Or will the AI platforms develop their own proprietary monetization systems, effectively creating new, even more impenetrable walled gardens that cut out third-party intermediaries for good?

The stakes are immense, not just for Criteo, but for the entire open web. If product discovery, comparison, and transaction all move inside closed AI ecosystems, the foundational principles of programmatic advertising and retail media could be rendered obsolete. The debate that played out on Criteo's call is one every marketer, publisher, and tech vendor will soon face. The agentic revolution is here, but the playbook for navigating it has yet to be written.