New Retail Advertising Network From Microsoft

Microsoft has unveiled a novel offering, the Microsoft Advertising Network for retailers, aimed at expediting the establishment of retail media networks for retailers or enhancing existing ones. This platform grants businesses access to Microsoft's current demand, ad supply, and an audience of high-intent shoppers, facilitating the setup and operation of their retail media programs. The product is currently accessible in the United States.

Microsoft asserts that its advertising network, encompassing the Bing search engine, Edge browser, and publishing partners such as Yahoo and the New York Times, provides access to over one billion users who, on average, spend 22% more than typical internet users.

In 2023, retail media networks have emerged as a prominent growth area in marketing. Nonetheless, constructing a prosperous media program via a private marketplace can be a time-consuming and costly endeavor for retailers. It demands expertise in digital advertising, the development of technology, and the enlistment of cross-departmental teams for program development, onboarding, and growth, often spanning months or years. Microsoft's new platform streamlines this process by allowing retailers to seamlessly integrate with the existing Microsoft Advertising Network. Brands can then promote their products across various retail partner websites, resulting in incremental increases in sales and media revenue for retailers.

Paul Longo, Microsoft's Global Head of Retail Media Sales, explained, "We have a profound understanding of the retailer experience throughout Microsoft, so with Microsoft Advertising Network for retail, we've reduced the efforts for retailers of all sizes to swiftly start generating retail media revenue and boosting their onsite sales."

Microsoft's offering also addresses a challenge within the retail media channel: the proliferation of retailers with their private media marketplaces, leading to fragmentation. This can potentially deter advertisers from allocating resources and investments to numerous networks. By providing access to the Microsoft Advertising Network through its new offering, Microsoft aims to remove these obstacles, enabling retailers to rapidly scale their businesses.

Earlier this year, GroupM estimated that retail media networks would generate $101 billion in revenue in 2023, constituting 18% of global digital advertising spending. The agency also forecasted a 60% growth rate in the channel by 2027. This growth trend highlights the channel's ability to reach consumers at the point of consideration and offer a new revenue stream through contextual placements for brand partners across a retailer's online properties. Consequently, an increasing number of retailers are following the lead of pioneers like Amazon and Walmart by launching their retail media networks.

Microsoft may expand its offering through strategic partnerships. It has already partnered with performance marketing firm Tinuiti as a premier launch partner for the Microsoft Advertising Network for retail. Additionally, omnichannel marketing company Skai will become the first third-party platform integrated into the new Microsoft offering.

This announcement underscores Microsoft's sustained strategic interest in digital retail marketing and advertising. In 2019, Microsoft acquired retail advertising company PromoteIQ, marking its entry into the retail advertising realm. The company introduced a Retail Media Advertising Network in January, which shared many features with its current Microsoft Advertising Network for retailers. Earlier this year, Microsoft rebranded PromoteIQ as Microsoft Retail Media to emphasize the company's interconnected services.