Microsoft is the multitrillion-dollar promoting firm that no person noticed coming.
There’s a purpose for that. Till current, Microsoft was a distant and comparatively uninvested competitor within the promoting sector. The corporate didn’t have advert tech, precisely, and its personal properties – MSN, the Bing search engine and the Edge browser – by no means gained marketer mindshare.
However that’s going to alter, stated Rob Wilk, who took over as head of Microsoft Promoting from Rik van der Kooi in January.
Right this moment, Microsoft has significantly better toys. MSN and Bing are, properly, not probably the most thrilling – however Xbox and Activision Blizzard are cool. LinkedIn could also be too business-first to be referred to as cool, nevertheless it’s an thrilling first-party information empire, to say the least.
Microsoft acquired Promote IQ, a retail media advert tech firm, in 2019, and adjusted the identify of its advertisements enterprise from Bing Adverts to Microsoft Promoting at across the similar time, signaling its ambition. Even so, Microsoft was nonetheless solely dipping its toe. However final yr, Microsoft took the plunge and full-on cannonballed into advert tech with the acquisition of Xandr, though that deal must move a regulatory assessment earlier than it may well shut and Microsoft can combine the tech.
“There’s one thing fascinating concerning the change that Microsoft goes via proper now,” Wilk stated.
Incomes $10 billion in a yr, as Microsoft Promoting did in 2021, is actually the form of factor that makes the C-suite sit up and take discover. From CEO Satya Nadella down via different organizations inside Microsoft, together with Xbox and LinkedIn, there’s a “newfound faith” in the case of the promoting alternative, Wilk stated.
AdExchanger caught up with Wilk.
AdExchanger: What’s your precedence coming into this new job?
ROB WILK: How can we get the market to know that what we’re doing is past search promoting. Now we have a fast-growing native enterprise, our retail media providing with Promote IQ, we’re doubling down on our SMB enterprise with a whole lot of 1000’s of advertisers – and, in fact, we’ve got our pending acquisition of Xandr.
What media and stock do you may have obtainable proper now?
We energy our personal search and the seek for Yahoo, for AOL and 1000’s of smaller publishers and companies we syndicate search advertisements to. That’s nonetheless the core of our income.
Then there’s our native enterprise, which we name the Microsoft Viewers Community, or MSAN, which right this moment is predominantly on Outlook.com, MSN.com and Bing.
We’re going to develop that with different Microsoft properties and get into the third-party provide enterprise sooner or later. Xandr can be an enormous a part of that.
Google has properties the place it serves advertisements – Search, YouTube, and so forth. – but in addition properties like Gmail, Chrome and Maps that aren’t essentially stock sources however nonetheless contribute vital information to Google’s inside ID graph. Are there comparable Microsoft companies that fill out the MSAN information however aren’t massive advert income properties?
We do have first-party information indicators that assist us goal higher and extra effectively.
Xbox, for example, has a console enterprise, nevertheless it additionally has a cloud gaming service individuals pay for month-to-month. They’ve logged-in accounts. That’s simply one of many areas we’re going to play in.
Think about a world, not too far off, the place all of those items are stitched collectively to make a cleaner, clearer providing for our advertisers. And, don’t neglect, we’ve additionally received searching data and information throughout gaming and the Microsoft Home windows enterprise with billions of customers – this offers us a novel benefit to know intent.
There’s a flywheel for promoting that truly begins with Home windows. If a client loves Home windows, there’s an excellent likelihood they’ll love Edge and Bing, and if we will tie issues collectively so Edge is a stickier browser, that in flip drives extra advert provide.
Is LinkedIn its personal separate enterprise with separate advert gross sales?
LinkedIn is a very separate division – not simply the promoting, however the whole firm. However we collaborate and do conferences with advertisers collectively usually.
We even have the flexibility to make use of sure elements of LinkedIn focusing on inside Microsoft Promoting which you’ll be able to solely get via us. For instance, some shoppers wish to attain individuals based mostly on, say, job title, or the identify or dimension of an organization.
How do you convey the promoting mentality to companies that traditionally haven’t been plugged into advert tech and the viewers graph?
Whether or not it’s Google, Fb or Twitter, nearly all of the businesses that we compete with are predominantly advertising-based firms. We’re an ad-supported division of a really massive firm that makes vital income not in promoting.
However now that we’ve reached this stage of scale – hitting $10 billion in search and information advertisements – we’re beginning to turn into vital inside Microsoft. That $10 billion is greater than Mattel, greater than Southwest Airways and different massive standalone firms. It’s greater than Snapchat and Twitter mixed.
And so there’s a newfound dedication I’m feeling from Satya right through to our senior management group that, hey, if we will construct a $10 billion advert enterprise, what else can we do to speed up that?
The most important instance of the change in mentality is that we aggressively pursued Xandr. They’ve received plugs and pipes into the entire ecosystem globally that may give us a number of alternative to experiment and develop.
It’s a number of items to maintain straight.
And we’ve despatched some complicated indicators previously.
If you happen to observe Microsoft intently, we had search gross sales that we gave to Yahoo after which introduced again. We had advert gross sales for years that we gave to Oath, which grew to become Verizon and is now again to Yahoo once more.
It doesn’t shock me that even individuals steeped within the business are nonetheless like, “Hey, how does all of it come collectively?” That’s going to be made a lot clearer for our advertisers.
There’s nonetheless one other pending acquisition down the highway, which is Activision Blizzard. However there’ll come a day when all of these issues are stitched collectively in a manner you’ll perceive and our shoppers will perceive. We’re working our manner via that.
What’s the most important differentiator for Microsoft Promoting in contrast with the large, absolutely ad-based platforms?
The suggestions we get from company and advertiser companions is that we’re way more leaned in to these relationships than our rivals.
It’s only a completely different mentality.
Take Google and Fb: As a result of we don’t have the identical share that they’ve, our mentality is way more centered on going out and incomes each greenback that we get. You do this by setting a excessive bar on account and on the insights and information we will present to companies or to assist shoppers be higher entrepreneurs.
This interview has been edited and condensed.
