Defending champions Real Madrid fell short of their usual standards in a surprising 1-0 Champions League defeat to Lille on Wednesday, and manager Carlo Ancelotti acknowledged that they must accept the criticism that follows.

Lille applied relentless pressure, securing the win with a Jonathan David penalty in first-half stoppage time, marking Ancelotti's team's first loss in all competitions since January.

The 15-time Champions League winners now sit on three points after two matches, having previously claimed victory over VfB Stuttgart in their opening game.

"Everything was pretty bad. We did badly with the ball. Although the team was quite compact in the first half, it was difficult for us to recover the ball and make transitions," Ancelotti told reporters.

"We tried to be a little more aggressive, but it was difficult for us. So we have to look at things with a cool head, not throw everything away. But obviously, we have to improve.

"I am very sincere. The criticism for today's game is fair and correct, and we have to accept it because it is like that. We did not show a good version in this game."

Ancelotti said Lille "deserved" to win despite Real's improved showing in the second half of the match.

"It was difficult for us to get into the game at the level of intensity, at the level of duels, at the level of clarity of play," the Italian added.

"Obviously, the game could have been tied because we had opportunities at the end, but it wasn't deserved.

"So we have to learn, as we did the last time we lost a game. We need to learn from what we have to improve, which is quite clear. I think it's not very complicated."

Real, who are second in the La Liga standings with 18 points, next host third-placed Villarreal on Saturday.