Microsoft is making a bigger move into retail media as it seeks to beef up advertising offerings for brands and retailers.
On Tuesday, the tech giant shared details on new capabilities for retailers seeking to use their first-party data for advertising on their websites, other digital channels and on in-store signs.
First launched in 2019 following an acquisition, Microsoft’s PromoteIQ is powering advertising on Sephora’s website, and is adding capabilities for Kroger’s retail media arm. With a slate of new releases, the company said it is building out a complete omnichannel retail media stack for retailers.
It comes as retail media continues to gain favor among brands and retailers for its ability to realize advantages in ecommerce marketplaces and use first-party data from purchases and loyalty programs to reach shoppers based on their actual profile. eMarketer projects retail media spend will reach $61.2 billion in 2024 in the U.S., which is nearly 20% of total digital ad spend.
Retail media has gained steam as Amazon showed how search advertising through its massive and much-visited marketplace could power a massive part of its business, and Apple's iOS changes made first-party data more valuable in targeting. A host of other retailers have launched retail media networks in the last year, but they work with technology companies to power various capabilities and access different types of inventory. Microsoft is one of those providers, and now it is looking to get bigger. It helps that the tech giant can draw on an existing ad network that powers search-related advertising on Bing, as well as its other properties. With the new capabilities, it is looking to create a single platform through which retailers can reach multiple channels.
Here’s a look at what Microsoft is announcing:
A retail media network
Microsoft shared on Tuesday that it will roll out a new network to help retailers offer brand advertising on their websites.
In a blog post, Microsoft announced the pilot release of the Microsoft Retail Advertising Network with the goal of helping retailers monetize inventory and drive incremental traffic to their websites. This is achieved by partnering with “hundreds or even thousands” of brand advertisers that are in the Microsoft Advertising ecosystem.
“Retailers can hit a saturation point where they’re unable to get more demand from their largest brand partners,” said Kya Sainsbury-Carter, VP of global partner at retail media at Microsoft Advertising. “This is where the Microsoft Retail Advertising Network comes in, helping retailers unlock new budget from the broader array of Microsoft Advertising brands that also sell on a retailer’s site.”
Kohl’s, the department store retailer with an ecommerce app and website, is an initial adopter of the network, Microsoft said.
Through the network, brands that use the Microsoft Advertising platform will be able to set up campaigns specifically for retailer websites, as well as on Microsoft properties and partner networks. Microsoft said it automatically matches retailers and corresponding brands, while directing interested shoppers directly to retailer websites.
Offsite advertising
Another new tool will allow retailers to use their data to help brands reach shoppers beyond their own website.
Promote IQ Offsite is a new feature that will allow retailers to use first-party data from retailers for third-party inventory on the open and social web. In February, retailers will be able to use this platform to put their first party data alongside data from Microsoft and lookalike audiences from Facebook and Instagram owner Meta for targeting.
BJ’s is already using Microsoft’s onsite and offsite capabilities for its recently launched retail media offering, called BJ’s Media Edge.
In particular, Microsoft sees potential to deploy this offering for Connected TV (CTV), which is advertising through streaming platforms. In this context, it’s worth noting that Microsoft is powering Netflix’s ad-supported tier.
“By leveraging shopper data, retailers can help brands to target and evaluate the impact of their CTV ads – a capability that’s expected with other digital media and across devices – now on the biggest screen in the house – the TV,” Sainsbury-Carter wrote. “Retailers will be able to derive actionable insights through unified reporting and attribution, an incredibly important measure whether in a boom time or in times of economic uncertainty.”
In-store advertising
Another surface where advertisers are looking to expand digital inventory is at brick-and-mortar stores. This type of advertising connects physical and digital. In-store ads are served over the web, then appear on connected signage at point-of-sale systems and within aisles. Microsoft said it completed a proof-of-concept for an in-store offering. The company intends to launch this capability within the next 12 months.
