Shares of Criteo, a French ad-tech company, hit a 52-week low Tuesday after Google announced it planned to end support for third-party cookies, which fuel much of the digital advertising ecosystem, in its Chrome browser within two years.
Criteo shares fell as low as $13.68, its 52-week low, before recovering slightly. Shares closed down 15.9%, at $15.29.
Criteo works with e-commerce companies to improve the performance of their advertising online. But shares in the company have struggled in the last two years as browser changes and regulation have loomed over the digital advertising system.
Cookies are small pieces of code that web sites deliver to a visitor's browser, and stick around as the person visits other sites. Third-party cookies are often added by advertisers and ad networks, in addition to the site the user is actually visiting, and can be used to track users across multiple sites, and to target ads and see how they perform. Google said on Tuesday that it will phase out support for third-party cookies in Chrome once it has figured out how to address the "needs of users, publishers, and advertisers" and it has developed tools to "mitigate workarounds."
Criteo has primarily offered retargeting capabilities, but has more recently attempted to diversify to help clients with more of their marketing needs, Criteo's chief financial officer Benoit Fouilland said at a Raymond James investor conference in December.
Rosenblatt Securities listed a risk factor for the digital advertising performance company as a "Dependence on Chrome targeting and its dominant global browser share" in a November analyst note.
SunTrust Robinson Humphrey wrote in a research note Tuesday that on the positive for Criteo, the company has been "aggressively" shifting to non-cookie based identifiers and "has two years to continue this push/transition."
"On the negative, the announcement prolongs uncertainty (as [opposed] to resolving it) that we cannot solve for as we do not know and may not know for some time how CRTO's solution/efficacy will be impacted by changes," researchers wrote. "We expect CRTO to work closely with Google to understand and prepare for changes. We look for a public response from CRTO to the news."
Criteo responded to the changes in a statement on its website, where it reiterated that it's continuing to move away from using third-party cookies. It said a "significant and growing share" of its business has already stopped using them.