Microsoft

Microsoft Advertising Enters the Video and CTV Advertising Realm

At the DMEXCO conference, Microsoft Advertising unveiled a brand-new video ad product called Video and Connected TV (CTV) ads. Advertisers can now create online video and CTV ad campaigns on the Microsoft Advertising platform, thanks to the company’s video ad offering. The novel solution offers specific reach across large-scale properties to guarantee that the ad is presented to the appropriate target audience. The offering engine accepts search data. The internet juggernaut wants to profit from the burgeoning digital video landscape. By 2024, it is anticipated that people will spend 3.5 hours daily on average.

How does it work?

The new platform does not require advertisers to learn how to use the new platform. No set-up fees or lengthy onboarding procedures are needed, and campaigns are straightforward to optimize. The same platform offers the possibility to target ads on CTV. Because of this, creating campaigns only requires a few clicks. The only thing advertisers need to do is upload video assets that best represent their brands. Additionally, they must determine who they want to expose their ads to as well as how frequently they should do so across multiple devices. Setting frequency caps, reporting on domains where ads are served, and excluding any domains where ads should not be served are all features available.

Why should advertisers care?

Video and connected TV (CTV) capability increases conversion possibilities. It expands the options for ad-serving and using audience analytics to target high-value consumers. The choice to run commercials online or on CTV is also available. Advertisers can purchase CTV ads through a cost-per-completed view mechanism to target audiences on smart TVs and connected devices.

Moreover, according to Microsoft, search data is one of the most important components to enable this CTV and video service. Even when watching television, online searches have developed into one of the most potent intent signals. It is now a clear indicator of consumer intent. It reveals what the current needs of consumers are. Search offers information that can later be converted into marketing.

The rise of multi-screen viewing

As multi-screening is becoming popular, Microsoft’s new offering comes at a crucial time. According to recent studies, 4 out of 5 consumers read online news while watching TV, highlighting the opportunity for advertisers to target audiences who engage in multi-screen behaviors. Furthermore, 90% of Gen Z viewers in the U.S. utilize a second screen in addition to TV. This behavior creates attractive opportunities for marketers to better engage viewers. Even though the data just pertains to the U.S. market, the product is currently conducting pilots in 34 markets, with more than 405 billion monthly CTV impressions and 1.6+ trillion video impressions.

Video and CTV ads highlights

Microsoft’s access to billions of first-party data points is what distinguishes this platform. It makes it possible for advertisers to precisely identify their target market. Advertisers can target viewers on desktop, smartphone, and tablet devices with online video advertising purchased using a viewable CPM model for both in-stream and out-stream placements. User behavior from Bing, Microsoft Edge, Microsoft Start, and other properties is included in this treasure trove of data.

Max, Hulu, and Bloomberg are just a few of the venues where you can see video and CTV advertisements. Additionally, it has been reported in media sources like the Wall Street Journal, MSN, and the Huffington Post. A hyper-targeted audience is created by the platform using machine learning algorithms based on a variety of variables, including product preferences, demographic data, and browsing patterns. The goal of this strategy is to make targeted ads better so that marketers can reach the most relevant audiences.

Read More: Loop Media-Microsoft Advertising Forge New CTV OOH Inventory Category

Search data insights

One type of data used to create intelligence signals is search. However, Microsoft permits the use of billions of legal first-party data sets across numerous properties in advertising. They range from preferences for content and brands to LinkedIn profiles and much more. All of these signals are applicable to the video targeting feature. Based on viewing and browsing information, Microsoft Advertising Video and CTV advertising enable advertisers to use these signals to place brands in front of viewers with the appropriate messages.

Forecasts suggest a significant increase in ad expenditure

Forecasts indicate that between 2023 and 2025, U.S. programmatic video ad expenditures will increase by $22.51 billion (30.2%). The latest feature from Microsoft is made to effectively develop this growing pattern. Another appealing factor is the ease of application. The announcement is noteworthy because it signals a significant effort in an industry that is constantly developing. Additionally, it provides marketers with a more comprehensive, data-driven tool for audience interaction. Microsoft’s CTV and Advertising Video advertisements provide targeted audience capabilities. The growing rivalry and possible ad saturation have led to continuous innovation for success.

Here’s what they said

Product Marketing Manager at Microsoft Advertising, Liam Mackessy, told Search Engine Land:

This product has been designed for ease of use. You can get started in just a few clicks, there are no long onboarding processes, no set-up fees, and it’s simple to optimise. We’re making CTV advertising, which typically can be a little bit more complex to buy, more accessible to a lot more advertisers on the Microsoft Advertising platform. However, we still provide control and flexibility to advertisers – they can set their own frequency caps so that they can accurately plan budgets and campaigns accordingly. We also have the usual domain reporting and domain exclusions to help advertisers keep track of where their ads are serving so that they can decide which sites they may not want their ads to be served on.

Read More: Microsoft Submits Revised Activision Blizzard Proposal to UK’s CMA

Microsoft Submits Revised Activision Blizzard Proposal to UK’s CMA

Microsoft has proposed a fresh revised deal for the Activision Blizzard acquisition, giving a number of concessions. The resubmission comes after the initial deal was rejected. Early last year, Microsoft, the company that owns Xbox, made a pitch for Activision Blizzard. After China’s Tencent and Sony of Japan, it sought to become the third-largest gaming company in the world by revenue. The US tech titan first proposed a $69 billion acquisition. However, it faced extensive legislative scrutiny in the US, Europe, and the UK. The original contract was halted, the UK’s Competition and Markets Authority stated. It further claimed that a new, restructured arrangement had been reached between Microsoft and Activision. The CMA will analyze the acquisition agreement and will come to a conclusion by October 18.

Microsoft’s Revised Agreement to the UK

Microsoft is seeking to alter its arrangement to acquire a more limited set of rights in order to allay concerns voiced by the UK CMA regarding the proposed acquisition’s potential impact on cloud game streaming. Microsoft will not be able to exclusively release Activision Blizzard titles on its proprietary cloud streaming service, Xbox Cloud Gaming, under the terms of the revised agreement. Additionally, it will have to give up exclusive control over Activision Blizzard game license agreements to competing providers. Additionally, it will not purchase cloud rights for current Activision PC and console games for new Activision games developed over the course of the following 15 years.

Instead, French video game producer Ubisoft Entertainment will receive permanent rights. A distinct third-party content provider is anticipated to be made available through the new agreement and cloud rights divestiture to Ubisoft. Microsoft will then be allowed to provide Activision’s game content to all other online gaming service providers as well as to itself. Activision content will be available for licensing through a variety of revenue models, including subscription services, for Ubisoft. As part of the agreement, Microsoft would also have to offer game versions for other operating systems besides its own Windows.

Read More: Loop Media-Microsoft Advertising Forge New CTV OOH Inventory Category

Ubisoft Benefits Amidst the Scrutiny

The arrangement gives Ubisoft an unparalleled chance to make money off cloud streaming of video games. It will provide Ubisoft with the opportunity to develop and support various business models. These cover the licensing and cost of the games available on international cloud streaming systems. Microsoft will get a one-time payment from Ubisoft in exchange for cloud streaming rights to Activision Blizzard’s titles. It will additionally depend on the wholesale pricing structure of the market, with the ability to accommodate usage-based pricing. Additionally, Ubisoft will have the chance to make Activision Blizzard games available through cloud gaming services that use non-Windows operating systems.

Sarah Cardell, CEO of the CMA said in the announcement,

As part of this new deal, Activision’s cloud streaming rights outside of the EEA (European Economic Area) will be sold to a rival, Ubisoft, who will be able to license Activision’s content to any cloud gaming provider. This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services. This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.

Read More: Microsoft and Meta Deepen Partnership to Boost AI Capabilities with New Gen Llama

Microsoft and Regulatory Backlash

The U.K.’s Commission and Market Authority have been the takeover’s harshest skeptics. It has brought up worries that the agreement might reduce competition in the just-starting cloud gaming business. Cloud gaming is believed to be the future of business. People will be free to stream games using subscription services just like they can with movies and television shows. Additionally, since cloud games are compatible with PCs, smartphones, and TVs, it would be unnecessary to purchase pricey consoles. Although the market for cloud streaming games is tiny, the CMA contends that the acquisition of a major developer of mega games by a top cloud gaming service provider would impede the emergence of healthy competition.

The CMA first announced its block to the acquisition in April. It stated that it could lead to reduced innovation and fewer choices for UK gamers in the years to come. Regulators previously also argued that Microsoft could take key Activision games like Call of Duty, World of Warcraft, etc, and make them Xbox and other Microsoft platforms exclusive.

Microsoft – Activision Blizzard Whirlwind

EU regulators were the first authority that originally approved the agreement in May. To cross that boundary, Microsoft made major concessions. They included royalty-free licensing to cloud gaming platforms for the streaming of Activision titles. However, the CMA rejected such proposals at the time. It believed they would give Microsoft the power to dictate the rules and regulations in this field for the following ten years. Although the EU has given the merger the go-ahead, British and American regulators have been more cautious out of worry that doing so might give Microsoft an excessive amount of control over cloud gaming.

In an effort to stop Microsoft from acquiring Activision, the Federal Trade Commission in the US engaged in an arbitration dispute with the software giant. A judge halted the FTC’s attempts to do so in July. This made it possible for Microsoft to proceed with the deal in the US. As soon as US regulators learned that the EU had authorized the idea, they quickly did the same. Later, the CMA stated that it was also prepared to take into account any suggestions from Microsoft for reorganizing the agreement and easing regulators’ worries.

Read More: Dentsu-Microsoft Forge AI Powered Alliance for Agency Brands

Microsoft’s commitment to regulation compliance

With complete adherence to and dedication to the EU, Microsoft commits to approve cloud streaming rights in the EEA. With the Ubisoft agreement, Microsoft will continue to obtain the rights necessary to fulfill its commitments to the EC. It will also extend the current legal obligations to other cloud gaming streaming services, like NVIDIA, Boosteroid, Ubitus, and Nware. Microsoft and the European Commission are working closely to assist each other’s assessments of the agreement. Further, it ensures to make sure that the obligations are upheld. It is presently attempting to enter into legally binding agreements to launch  Call of Duty on competing consoles. Additionally, it will be accessible through cloud streaming platforms for Activision Blizzard titles. Thus, the transaction is now in a position to move forward in 40+ countries.

Brad Smith, Vice President of Microsoft stated in the blog post

We believe that this development is positive for players, the progression of the cloud game streaming market, and the growth of our industry. And, as we continue to navigate the review process with the CMA, we remain as committed as ever to bringing the incredible benefits of the acquisition to players, developers, and the industry

Read More: Microsoft’s Activision Blizzard Acquisition Approved by China

Loop Media-Microsoft Advertising Forge New CTV OOH Inventory Category

Microsoft Advertising and Loop Media, a provider of free ad-supported TV content, have teamed together to develop a new advertising inventory for SSP collaboration. Loop Media is a provider of digital video content with over 2 billion video views every month via eateries, shops, workplaces, medical facilities, airports, clubs, and colleges. In a pioneering arrangement in the SSP format, Loop Media and Microsoft Advertising will give marketers and demand-side platforms (DSPs) fresh distribution segments from which they may access and obtain Loop Media’s promotional engagements. Digital Out of Home (DOOH) and CTV (Connected TV) are the company’s key offerings on DSPs and SSPs (supply-side platforms). All prospective buyers of DOOH marketing will have access to Loop Media through the new category CTV Out of Home that was created as a result of this agreement. Buyers wanting to investigate ads on CTV OOH service networks will be among them.

Advertisers Rejoice

Through this strategic partnership with Loop Media, Microsoft Advertising seeks to grow its advertising business. It aims to give its advertisers access to the exposure and reach of Loop Media. This cooperation will also open up fresh options for marketers to efficiently and effectively interact with their target audiences.

Advertisers will have access to cutting-edge tools with the development of this brand-new sort of advertising inventory, the CTV OOH. They will be able to effectively connect with and interact with the demographics they want. The collaboration benefits both businesses and will increase Loop Media’s visibility in the constantly changing market.

Loop Media and Microsoft Advertising have paved a revolutionary ad landscape. The launch of CTV OOH under the aegis of the SSP partnership helps advertisers to precisely accomplish their marketing objectives. It has paved the way for a promising future by increasing market potential and improving client outreach with this agreement. Loop Media and Microsoft Advertising have created a game-changing advertising landscape by working together. The roll-out of CTV OOH under the SSP partnership framework gives marketers more freedom to precisely accomplish their marketing goals. 

Read More: Connected TV Explained: The Essential Glossary Of CTV

And what they said

Bob Gruters, Chief Revenue Officer for Loop Media stated,

With this new category, Loop Media may be seen and purchased by an expanded group of advertisers in the marketplace. My team and I have been working diligently to get Loop Media positioned well across all revenue advertising categories including Microsoft Advertising’s CTV Out of Home category.

Erik Zamkoff, Microsoft Advertising associate director of Marketplace Development said,

We are pleased to launch our new CTV-OOH library on the Microsoft Advertising platform which provides a path for clients to buy CTV-OOH supply in the proper context with clear labeling in our new venue category packages. We are thrilled to feature Loop CTV-OOH supply in our new venue category packages.

About Loop Media

Loop Media, INC. is a market leader in digital out-of-home (DOOH), television, and digital signage. Through its Loop TV Service, it assists businesses in optimizing campaigns on various platforms by offering free music videos, news, sports, and entertainment channels. Loop Media has a license to stream music videos to companies in the United States using its patented Loop Player. Millions of users access its digital content at DOOH locations every day across the U.S. They include office buildings, retail enterprises, bars/restaurants, university campuses, TV platforms, airports, and local gas stations.  It is the most comprehensive and important inventory of short-form entertainment. 

Read More: Disney+ Hotstar Amp Brand Outreach With CTV Targeting

Delve In What the Quarterly Results For Big Tech Titans Are Saying

The quarterly results for big tech companies are out. Here are some key takeaways for advertisers and marketers.

Microsoft

Microsoft’s fiscal year has been challenging on many fronts. The acquisition of Xandr, the ad-buying platform, and the increase in search volume revenues failed to produce satisfactory results, making Microsoft miss the mark in Q4. With continuous commitments to investing in artificial intelligence technologies, analysts predicted the quarter to be successful for Microsoft. The company attributed stagnant growth to a decline in advertising spending, which was lower than a quarter on quarter.

Its Talent Solutions contributed to the company’s revenue growth exceeding expectations. Despite the increased revenue, Microsoft reported a reduction in numbers due to low ad spending. The tech giant concluded it was due to marketing solutions decline. LinkedIn’s revenue increased due to growth in Talent solutions. Microsoft Cloud showed promising growth in all of its businesses with improvements in its verticals. Search and news advertising went up with the Xandr acquisition.

By the numbers:

• Revenue was up by 8% increasing to $56.2 billion.
• Advertising and news search revenues up to $86 million, a 3% increase including traffic acquisition cost, 8% increase excluding traffic acquisition cost.
• Azure Cloud revenue growth slowed from 27% to 26%.
• LinkedIn revenue increased by 5%.
• Microsoft Cloud’s quarterly revenue was 21% or $30.3 billion YoY.

Currently, the company is prioritizing developing and spearheading safe generative AI models and practices. Their aim is to help customers use Microsoft Cloud to make the most of their digital resources and drive operations control.

Satya Nadella, Chairman and Chief Executive Officer, Microsoft stated in the Q4 results announcement,

We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage.

Amy Hood, Executive Vice President and Chief Financial Officer at Microsoft cited,

Advertising spend was slightly lower than anticipated which impacted Search and News advertising and LinkedIn Marketing Solutions. For LinkedIn, we expect revenue growth in the low to mid-single digits.

She further added,

Even with share gains in our hiring business, growth will continue to be impacted by the overall markets for recruiting and advertising, especially in the technology industry where we have significant exposure.

Meta

Meta produced results in Q2 that exceeded analysts’ expectations. Revenues from advertising rose robustly. The revenue uptick signaled the social giant’s ad business recovery after previous years of gloom and cross-border concerns. Meta cited the increase in DAUs for Reels, the company’s short-form video content app. This attracts 200 billion people to Facebook and Instagram. The app also generated $10 billion annually, which is a $3 billion increase Q/Q.

The company credits the increase in ad revenues to Threads, the text-based app, and continued investment in artificial intelligence. The company ascribed the increase in ad impressions to a heightened focus on TikTok’s rival Reels and AI-driven products as the key factors in the positive outcome. Meta commits to AI advancements and data centers. The CEO has also highlighted AI as the focal point of Meta’s growth strategy. He predicts revenue from AI-powered structures for marketers, AI chat agents, and productivity tools for employees.

By the numbers:

• Revenue up to $32 billion, up 11%.
• Facebook DAUs are 2.06 billion on average, an increase of 5% year over year.
• Facebook’s MAUs of 3.03 billion increased by 3% year-over-year.
• Family daily active people (DAP) 3.07 billion on average, 7% up Yo-Y.
• Family monthly active people (MAP) 3.88 billion and 6% higher Yo-Y.
• Ad impressions in Q2 2023 increased 34% year-over-year and the average price per ad decreased 16% Yo-Y.

Susan Li, Meta’s Chief Financial Officer however stated that their ongoing commitment to invest in Reality Labs, Meta’s unit for metaverse-related initiatives negatively impacted their results. However, it will not hamper their ambition to spearhead metaverse developments.

Mark Zuckerberg, CEO of Meta added,

We had a good quarter. We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in pipeline, and the launch of Quest 3 this fall.

Alphabet

Alphabet, Google’s parent company overcame its advertising slump in the Q/Q, signaling a return to momentum with favorable results. The revival of their revenue graph was needed to reshape the competitive AI technology landscape. The Q2 results erased concerns about Google losing digital ad prowess to AI advancements on the financial forefront.

The company attributed the overall growth to increasing Google Cloud Services demand, which is anticipated to adopt AI as it advances. The rise in revenues can be traced to costs from YouTube subscriptions and the Pixel family’s content acquisition. YouTube witnessed a surge in stabilized ad spending despite competition from TikTok. Google Cloud revenues were up due to its AI-optimized structure which piqued consumer interest.

By the numbers:

• Revenue was $74.6 billion, up 7%.
• Ad sales rose 3% to $58.1 billion.
• YouTube revenues increased by 4% to $77 billion driven by brand advertising.
• Network advertising revenues were down 5% at $7.9 billion.
• Google Search and other advertising revenues were up 5%, to $42.6 billion.
• Google Cloud revenues are up 28%, at $23.5 billion.

Alphabet is certain that the money needed to finance AI advancements will come from Google’s advertising engine. As such, Google has predicted that it will face more difficulties not only from rivals like ChatGPT, Microsoft, and Bing but also from Amazon’s shopping unit and TikTok and Reddit in trending topics. As part of its efforts to strengthen cybersecurity capabilities, search, and advertising capabilities, the CEO mentioned that AI would be integrated across its product groups.

Sundar Pichai, CEO, said in the announcement,

There’s exciting momentum across our products and the company, which drove strong results this quarter. Our continued leadership in AI and our excellence in engineering and innovation are driving the next evolution of Search and improving all our services.

CFO Ruth Porat commented,

We expect elevated levels of investment in our technical infrastructure, increasing through 2023 and continuing in 2024. The primary driver is to support AI opportunities across Alphabet, including investments in GPUs and proprietary TPUs, as well as data center capacity. With all that said, we remain committed to durably re-engineering our cost base to help create capacity for these investments in support of long-term, sustainable financial value.

Amazon

Amazon released its second-quarter earnings, and the numbers were impressive. According to CEO Andy Jassy, Amazon saw developments in areas they had been steadily advancing in for the past quarters. The e-commerce giant attributes its revenue growth to the rise in price points, selections, and convenience available to its consumers. Amazon continues to see strong demand for everyday essentials, positive feedback from customers, and updates to its website, mobile apps, and customizations.

AWS growth stabilized in Q2. Moreover, it continues to grow with customers, partner networks, functionality, and operational presentation. AWS revenues were twice as high as any other provider. Amazon is constantly working to further AWS technologies and features to aid customers in leveraging generative AI, productivity, and security. Ad revenue increased due to performance-based advertising efforts, improved customer relevance of ads, and ML benefits to understand ROI and ad spending for brands.

By the numbers:

• $134.4 billion revenue, an increase of 11% Y-o-Y vs estimates of $131.5 billion by Refinitiv analysts.
• Advertising revenue is up 22% Yo-o-Y, to $10.68 billion.
• AWS sales revenue growth of 12% Yo-Y to $22.1 billion.
• Subscription service revenues including Prime memberships were up 14%, at $9.8 billion.

Amazon is currently working on enhancing Machine Learning models to help marketers access audiences that were difficult to reach with Amazon ads. During an AWS event in New York, Amazon also committed to enhancing generative AI-powered applications with the latest and improved pre-trained large language models (LLMs).

CEO Andy Jassy mentioned in the earnings call,

As the economy has been uncertain over the last year, AWS customers have needed assistance cost optimizing to withstand this challenging time. They have also needed assistance reallocating spending to new initiatives that better drive growth. We’ve proactively helped customers do this.

Apple

Apple reported their results for the third quarter that were better than their expectations, however, revenue was down Yo-Y. The company attributed the growth in its revenue to healthy iPhone sales across the world. Apple set an all-time high record for services revenues, including advertising, the app store, and music, exceeding its predictions. The slump in iPad sales revenue was accredited to the iPad Air launch in the prior year. They continue to invest in product enhancements to encourage customer satisfaction which was reported to be 98% across the U.S.

By the numbers:

• Revenue was $81.8 billion, down 1% Yo-Y.
• iPhone revenues are $39.7 down 2% Y-o-Y.
• $6.8 billion, down 7%, for Mac.
• iPad $5.6 billion, down 20%.
• Wearables home, and accessories revenues were $8.3 billion up 2% with expectations.
• Services revenue $21.2 acceleration of 8%.

Apple is releasing its most ambitious and advanced personal electronic device, the Apple Vision Pro early next year for ordinary consumers. It is currently only available to advertisers, content creators, etc for demo purposes and has received stellar reviews.

AI and machine learning will continue to be an integral part of product design. Apple is planning to introduce AI and ML-powered live voicemail in iOS 17. They have also invested in research into generative AI and continue to responsibly enhance their products with these technologies. This is with the goal of enriching people’s lives.

Tim Cook, Apple’s CEO said,

We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone. From education to the environment, we are continuing to advance our values, while championing innovation that enriches the lives of our customers and leaves the world better than we found it.

Luca Maestri, Apple’s CFO, further remarked,

Our June quarter year-over-year business performance improved from the March quarter, and our installed base of active devices reached an all-time high in every geographic segment.

Snapchat.INC

Snapchat reported its quarterly results and they were mixed. Although revenue was up Q/Q, it still saw a Yo-Y dip. Just like its competitors, Snapchat is grappling with a slump in advertising revenues. Snapchat also introduced an exciting and innovative AI feature a few months back to keep the platform happening and engaged. My AI, Snapchat’s AI chatbot is now integrated into group chats, recommendations, and ‘Lens’ suggestions.

By the numbers:

• Revenue was $1,068 million compared to $1,111 million the previous year
• DAUs 397 million, an increase of 50 million or 14% Yo-Y
• 4 million global users for paid subscriptions introduced in the previous year

This quarter, the social media company pledged to improve advertisers’ expectations through machine learning technology. It will do so to upgrade its framework, find creative approaches to measuring and optimizing ad spending, and encourage new leadership. Its continuous investment in ML infrastructure has improved company ranking and content personalization.

Snapchat believes that it will face healthy community growth in the next quarter with expected DAU increases of 405 to 406 million.

Evan Spiegel, Snapchat’s CEO said,

We are excited by the progress we have made delivering increased return on investment for our advertising partners, growing our community to 397 million daily active users, and reaching more than 4 million Snapchat+ subscribers.

 

Omnicom Media Group

Omnicom Media Group ended its second quarter of 2023 on a high note. The organic growth rate was up 3.4% compared to the previous quarter’s results, placing it within its projected range. Omnicom spearheads generative AI developments in the media business. Their ongoing strategic alliances with companies like Adobe, AWS (Amazon Web Services), and Microsoft help them do this.

The business has also promised to invest in media sales capabilities, environmentally friendly technology, and data from first parties. They are currently realigning their staff to match strategy choices and outlook.

By the numbers:

• 3.4% organic revenue growth in Q2 23, with $3,609.9 million revenue
• Advertising Media revenue growth was 4.2%, while organic growth grew by 5.1%
• Third-party costs which include supplier costs the company incurs when providing services to clients increased to $86.8 million
• Organic growth rate for Public Relations was up 0.1%, while execution & support decreased by 3.8%

John Wren, Chairman and CEO of Omnicom said in the announcement,

While the balance of the year will continue to see economic uncertainty, we are entering a dynamic and exciting new era for our company. Omnicom has secure leading positions in generative AI technologies and partnerships to deliver on our promise to achieve the best outcome for our clients and increase the operational efficiency of our company.

 

eBay

EBay has exceeded Wall Street’s expectations in all key metrics and delivered positive results. However, the marketplace’s weakened momentum among active buyers was worrying. Gross merchandise sales decreased also recorded. 

In spite of this, the e-commerce marketplace believes that its increasing focus on AI integration into its platform will drive further user momentum. The company currently prioritizes laying a strong foundation for generative AI tools across the website to aid marketers and product listers.

By the numbers:

• Revenue was up to $2.51 billion, an increase of 5% from the previous year
• Advertising revenues were $367 million, up 33.5% Yo-Y.
• Promoted Listings revenue was up 47%, reporting $341 million
• The active buyer base declined by 4%

In the next five years, eBay plans to implement AI enhancements in every part of its organization. They are constantly integrating generative AI features into their site. They are also working towards reinventing the e-commerce landscape. Its work has already produced stellar results and hopes to deliver long-term results.

Jamie Iannone, CEO said,

The foundational work we’ve accomplished over the past 3 years has set us up for a new phase of innovation. Our teams are focused on thinking bigger and moving faster as we build game-changing features and functionality for customers to keep eBay at the forefront of eCommerce.

 

Read More: Advertise Your Brand in the Metaverse: The Future of Digital Advertising

Dentsu-Microsoft Forge AI Powered Alliance for Agency Brands

Artificial intelligence is overtaking the world. Every industry is rushing to incorporate  AI powered tools into its business models, especially the global advertising industry. A collaborative agreement between Dentsu and Microsoft has been announced in yet another case. By creating consumer-ready solutions, Dentsu’s staff will be able to increase client productivity and expansion by utilizing Azure OpenAI technology.

What’s in it for Dentsu?

The agreement will also be guarantee employee access to a secure, enterprise-level development ecosystem , which is an expansion of the already-existing relationship. The partnership between Dentsu and Microsoft aims to give staff access to cutting-edge tools so they can create prototypes more rapidly and effectively. The centralized organizational structure of Azure OpenAI eases the workload on the business and product groups while fostering rapid client development.

AI Connective is diversified online network dedicated to knowledge exchange among all agency brands. Azure OpenAI technologies are accessible globally via this tool. Dentsu’s current systems and databases incorporate the artificial intelligence frameworks as a crucial part of its overall strategy. Additionally, it reduces security concerns while promoting client-centered growth. The fruits of the result have already been borne with the development of two upcoming CXM solutions- Merkle GenCX and AI-playground LATAM

Merkle GenCX uses the potential of generative AI to provide an unforgettable client experience. Regarding LATAM, it offers tailored solutions that integrate audience databases with cutting-edge technologies. Customers benefit from the tool’s increased daily effectiveness and operational dexterity.

Here’s what they said!

According to Simon Crawshaw, Worldwide Lead for Media and Entertainment, Microsoft, both Microsoft and Dentsu share the vision to work towards a responsible AI. This is followed by Azure AI and Co-Pilot’s ability to drive creativity and productivity. He stated,

We are working closely with dentsu to enable AI to drive business and technological outcomes that will fuel a symphony of ideas, orchestrate captivating narratives, elevating brands and campaigns, and provide a powerful platform for their clients.

Dominic Shine, Group Chief Information Officer for Dentsu commented,

By extending our deep partnership with Microsoft and rolling out Azure OpenAI infrastructure, we’re making AI resources accessible to all dentsu employees within a framework defined on ethical and responsible AI principles.

The Dentsu-Microsoft partnership reflects the former’s dedication to employees’ access to the latest AI platforms. Their main goal is to give their staff the tools they need to take advantage of evolving technologies. AI-powered innovation and brand success have never been greater owing to this collaboration between Dentsu and Microsoft. This collaboration should produce outstanding brand experiences and enable the digital workforce.

Read More: Google and Omnicom Collaborate to Enhance Advertising with Generative AI

Microsoft and Meta Deepen Partnership to Boost AI Capabilities with New Gen Llama

Microsoft and Meta, formerly Facebook Inc., have announced the launch of their next generation of large language models (LLMs). Llama 2 will be the latest addition to their growing family of LLMs on Azure and Windows. The collaboration will deepen Microsoft and Meta’s existing alliance. Meta identified Microsoft as their preferred partner with Llama 2. Currently, Llama 2 is accessible to businesses and researchers. They intend to allow access to a large cohort of businesses. Customers will also include academics, tech industry experts, and anyone else who recognizes the value of accelerating AI technology advancements. It is currently under public review.

Llama 2’s capabilities will offer developers flexibility in the type of model they wish to create and support open and experimental models. The approach aims to make it possible for organizations and developers to create generative AI tools and experiences. Meta and Microsoft are dedicated to liberalizing AI and its benefits.

John Montgomery, Corporate Vice President, Azure AI at Microsoft, in the announcement stated,

The announcement builds on our partnership to accelerate innovation in the era of AI and further extends Microsoft’s open model ecosystem and position as the world’s supercomputing platform for AI.

Democratizing AI through the power of partnership.🎉 We're excited to welcome Llama 2 from @Meta to @Azure and @Windows: https://t.co/OJyYP9sVBA

— Microsoft (@Microsoft) July 18, 2023

Customers will now be able to modify and implement Llama 2’s 7B, 13B, and 70B parameters in a more direct and safe manner on Azure. The model will also support Windows PCs. Developers can use Llama by focusing on DirectML execution source through ONNX Runtime. In addition to integrating AI into their apps, it will produce a seamless workflow.

Meta and Microsoft’s evolving relationship

For AI development, Meta and Microsoft have a longstanding relationship. The collaboration first began with the integration of ONNX Runtime with PyTorch to refine the developer experience and Azure as Meta’s choice for a strategic cloud provider.

Azure’s specially designed AI supercomputing platform is created to assist the world’s top AI organizations in developing, honing, and utilizing some of the most resilient AI capabilities. The Llama 2 model equips programmers with tools to use Azure AI’s robust modeling, training, modifying, interpreting, and supporting abilities. It will be the latest addition to Microsoft’s Azure AI model catalog. This catalog will act as a central point for foundation models. This will enable developers and machine learning (ML) experts to find, examine, customize, and distribute huge pre-built AI models widely.

A Vow to Responsibility

Both companies pledge to build AI that is centered around transparency and access. They know the risks that accompany AI. Meta and Microsoft are committed to building responsible AI models and provide a number of resources to help those who use Llama 2

• Safety testing: Several internal and external efforts have red-teamed or safely tested the finely refined models. To help improve the model, their teams created an aggressive prompt. They also commissioned third parties to conduct external combat testing to find gaps in performance.

• Transparency: Both companies promise to outline the model’s tuning and evaluation procedures as well as point out any areas of improvement. Their transparency plan reveals known difficulties and problems they have encountered, offering suggestions to resolve them.

• Responsible resource for developers: In order to help developers with responsible development and safety assessments, they have also created a user guide. These procedures discuss the best practices for the best research underway right now on ethical generative AI.

• Suitable Use Policy: To ensure these models are used ethically and responsibly, policies have been implemented prohibiting specific use cases.

Llama 2 will help programmers build customized experiences via a GitHub repo. They can fine-tune LLMs to meet their specific needs on Windows PCs using Subsystem for Linux and highly capable GPUs. Both Meta and Microsoft agree that making LLMs publicly accessible will aid in the creation of useful and secure generative AI

We are eager to witness what innovations and advancements this partnership brings in order to revolutionize the realm of AI!

Read More: KPMG-Microsoft Amplify Partnership To Unlock New AI Possibilities

KPMG-Microsoft Amplify Partnership To Unlock New AI Possibilities

Microsoft and KPMG have agreed to advance their coalition for mutual benefit. Both major industry players have agreed to cooperate on developing personalized artificial intelligence over the next five years. This partnership will strengthen KPMG’s professional services across several business segments. This will include building a more skilled workforce, implementing safe and secure AI solutions, and ensuring society’s safety.

KPMG and Microsoft are entering a substantial phase in their relationship, which began in 2000. The goal will be to take advantage of the growing prospects for AI in the business world. The expanded cooperation will enhance client engagements and employee experiences in a more responsible, trustworthy, and sound manner.

Satya Nadella, Chairman and CEO at Microsoft, in the announcement remarked,

We have a real opportunity to apply this next generation of AI to help transform every industry, including professional services. Our expanded partnership with KPMG will bring together AI innovation across the Microsoft Cloud with KPMG’s tax, audit and advisory expertise to empower its employees and unlock insights for its customers.

Today, we’re expanding our partnership with @KPMG, as we bring together AI innovation across the Microsoft Cloud with KPMG’s tax, audit, and advisory expertise to empower employees and unlock insights for customers in the new age of AI. https://t.co/KiAhfGg31A

— Satya Nadella (@satyanadella) July 11, 2023

The deal will include the accounting firm’s multibillion-dollar pledge to Microsoft cloud and AI services. The agreement is said to unlock potential incremental growth projections in areas such as cybersecurity, cloud computing and tax services. KPMG is estimated to gain more than $12 billion in benefits from the agreement.

KPMG will have prompt access to Microsoft’s 365 Copilot, cloud, and Azure OpenAI Service offerings. As a result, KPMG’s global workforce of more than 265,000 will be equipped to unlock their vision, provide quick analysis, and gather detailed strategic information. The professionals will also head the technologies for a select group of businesses across the organization globally. Moreover, KPMG and Microsoft will be able to support 2.5K combined clients to keep up with AI developments. They will be able to overcome business obstacles.

What’s in it for KPMG?

The KPMG-Microsoft extended partnership will benefit KPMG’s audit, tax, and advisory business sectors. This is a detailed analysis of how it will be helpful to KPMG.

Audit

KPMG Clara is KPMG’s smart audit platform and has 85,000 audit personnel responsible for auditing more than hundreds of thousands of works annually. They will be able to invest in analytics, artificial intelligence, and Azure Cognitive Services to enhance their audit process. As a result of this method, shareholders and capital markets will understand high-risk areas in audits and sector-specific risks. This collaboration will enable KPMG professionals and clients to discover new horizons.

Tax

Clients will get access to KPMG’s Tax and Legal technology through KPMG Digital Gateway, one of the firm’s single platform solutions. It will enable them to have explicit access to their data collection and a more comprehensive management outlook on their tax functions. In addition, KPMG professionals will work with a generative AI powered virtual assistant for establishing tailored client service models. This will help tax specialists become more proficient. It will also offer income-generating opportunities like product experience development and knowledge management of tax laws.

Advisory

Client-based specialized services will be deployed using an AI development and knowledge platform integrated into Azure. With ethos and security at the center, the agreement will advance their competitive advantage and productivity.

Making an impact

The deal will also extend to commercial prospects. KPMG and Microsoft will discover and contribute to allied opportunities where they will join forces and lead social and community impact across the world. These drives will include UNESCO’s global education coalition and KPMG’s 10×30 strategy. This will empower more than ten million destitute youth economically by 2030. The global education coalition has been launched to help the student population affected by school closures because of Covid-19. It will provide the highest quality distance learning practices for those most affected. Building on KPMG’s Circularity Tracker, the relationship will also encompass their clients’ environmental, social, and governance (ESG) initiatives.

Bill Thomas, Global Chairman and CEO, KPMG international stated,

Our renewed and strengthened relationship with Microsoft is an exciting moment for our people and our clients It will help harness the power of our multidisciplinary model by ensuring that our people always have the right expertise, skills, and tools to overcome challenges and provide the very best to clients.

He further added,

KPMG is embracing the future, and we believe that AI is key to unlocking sustainable growth in a way that will build a better future for our people, our clients and society.

Read More: Microsoft Store Ads Expand to Bing Search Results, Empowering Global Advertisers

The AI Search War: Microsoft & Google Compete for Search Engine Leadership

The swift ascent of ChatGPT, developed by OpenAI and supported by Microsoft, has caused a sensation worldwide with its capability to deliver rapid results. In fact, within just two months of its release, the app has garnered 100 million users, making it one of the quickest-growing applications globally.

Microsoft announced the launch of its latest AI product, a revised version of Bing-powered by a custom-made OpenAI language model that is designed specifically for search and is more powerful than ChatGPT. The tech company describes tools as an AI copilot for the web. The company will also be upgrading its Edge browser, bringing new features to the table. 

The announcement from Microsoft arrives around the same time as Google’s announcement of Bard, its answer to ChatGPT. As ChatGPT posed a challenge to Google, the company responded with Bard. Microsoft has now entered the field with a cutting-edge search engine that utilizes artificial intelligence. 

Interesting Read: Google’s BARD vs ChatGPT: Which AI Will Rule the Search Realm?

However, during its live demo, Google’s AI algorithm, Bard, made grotesque errors, resulting in a loss of $100 billion in market capitalization for its parent company. What precisely occurred to cause such significant damage to Google? Industry specialists have pointed to a mistake in the response given by the chatbot in Bard’s promotional material. This error happened in response to the query, “What new discoveries from the James Webb Space Telescope (JWST) can I tell my nine-year-old about?” 

Bard’s response in the online demo includes an answer that states the telescope “took the very first pictures of a planet outside of our own solar system.”

The error was picked up by many astronomers including Grant Tremblay, an astrophysicist at the US Center for Astrophysics, who tweeted:

Not to be a ~well, actually~ jerk, and I'm sure Bard will be impressive, but for the record: JWST did not take "the very first image of a planet outside our solar system".

the first image was instead done by Chauvin et al. (2004) with the VLT/NACO using adaptive optics. https://t.co/bSBb5TOeUW pic.twitter.com/KnrZ1SSz7h

— Grant Tremblay (@astrogrant) February 7, 2023

 

The incident highlights the fierce competition between Google and Microsoft, as Bard was developed to rival Microsoft-backed ChatGPT. In less than a week, we witnessed the two big tech giants engage in all sorts of acrobatics to secure their positions and control the market as they compete to lead the next wave of AI-enhanced computing.

Who will win the AI-powered search/chat war?

Despite the fact that the market is still bullish on Google, experts believe they are still a few steps behind Microsoft, which has recently caught up to ChatGPT’s advances. Today, Microsoft stands ahead on the AI front. People are curious about the potential impact of large language models (LLMs) on search. Last week, Microsoft caused a sensation by integrating OpenAI’s technology into Bing search.

“First of all I have the greatest of admirations for Google and what they’ve done. They’re unbelievable with great talent. I have a lot of respect for Sundar Pichai and his team.I just want us to innovate. Today was the day when we brought some more competition to search. We’ve been at it, believe me, I’ve been at it for twenty years and I’ve been waiting for it. 

But at the end of the day, they are the 800 pound gorilla on this which is what they are and I hope that with our innovation they will definitely want to come out and show that they can dance and I want people to know that we made them dance and I think that will be a great day.” 

– Satya Nadella

Google’s recent actions certainly make it look like they are dancing. Despite their superior AI models and expertise, they have not effectively commercialized this technology due to a lack of a culture that supports innovation. However, the pressure from Microsoft and OpenAI is quickly transforming this situation. 

The intense competition between the leading tech companies has been captivating to observe, with each company making impressive announcements in quick succession. Behind the scenes, there is a fierce battle being waged in the boardrooms of these tech giants. The heightened interest in the latest AI-powered version of Bing has resulted in high demand for the product, causing a waitlist to form for those eager to try it out.

Race to ace the AI-powered search industry

Google holds a dominant position in the global search market with a market share of over 93%, while Bing’s share is 3% in January, 2023. According to Microsoft Chief Financial Officer, Amy Hood, search advertising represents a significant portion of the digital advertising industry, accounting for an estimated 40% or $200 billion of the $500 billion market. The majority of these revenues are generated by Alphabet, which reported a total of $163 billion in search advertising last year.

Its business model revolves around advertising and search-based revenue, with roughly 60% of its income coming from Google Search. Microsoft announced the integration of ChatGPT into Bing sent Google into a state of emergency. A significant disruption to this income stream could have disastrous effects. The emergence of ChatGPT as an AI-powered alternative to search represents a potential threat to Google’s business.

Microsoft may be counting on its chatbot-powered information search to attract new users who could then use Bing for higher-value searches. This strategy may come at the cost of lower margins, at least until expenses can be reduced. However, it would only be justified if Microsoft can effectively challenge Google and gain a significant market share.

“for every 1 point of share gain in the search advertising market, it’s a $2 billion revenue opportunity for our advertising business.”

-Microsoft

Challenges for Google: Balancing Cost and Market Dominance

The shift to AI-based large-language models could also increase Google’s costs, in addition to the threat to its market share. A research note from Morgan Stanley analyst Brian Nowak, quoted by Barron’s, highlights the potential for increased costs for Google due to the shift towards AI-powered search queries. The note indicates that a 10% shift in queries to AI will result in a $1.2 billion increase in Google’s operating costs. If the shift were to reach 50%, expenses would grow by $6 billion and trim pretax profits by 6%. Nowak’s perspective is that AI-powered search queries will cost Alphabet roughly five times more than the current method.

The partnership between Microsoft and OpenAI presents a double challenge for Alphabet investors, as it could result in a loss of market share and increased costs. This comes at a time when Alphabet is already facing regulatory scrutiny over allegations of monopolistic practices and misinformation on its platforms. The Microsoft-OpenAI deal has the potential to add additional stress to the already challenging situation for Alphabet and its investors.

The current technology and business model that has produced consistent profits for 20 years may be challenging to let go of. However, CEO Sundar Pichai is determined to resolve this “innovator’s dilemma” and find the best solution. On the other hand, Microsoft CEO Satya Nadella is hoping that Bing will gain popularity as a search term before Pichai finds a solution.

Wrapping up

In light of the recent “Bard AI fiasco,” Alphabet CEO Sundar Pichai must swiftly resolve the “innovator’s dilemma” and find a suitable solution. Meanwhile, Microsoft CEO Satya Nadella has high hopes for Bing to establish itself as a popular search term before Pichai’s resolution. The pressure is on both tech leaders as they navigate the constantly evolving technology landscape and competition in the search engine market.

Microsoft is ready to reclaim its position at the forefront. Google, be prepared, as Microsoft takes the lead in this first round. Witnessing this AI search engine battle is going to be a lot of fun!

Interesting Read: Tête-à-Tête With ChatGPT- The Power Of AI

 

 

AVOD Surprise: Netflix Advertising Powered By Microsoft

Netflix is building its advertising business and the streaming giant has signed Microsoft as its first ad tech partner. In April, Netflix surprised the world with the news that it plans to launch an ad-supported tier. Industry watchers were expecting that Netflix was close to picking an advertising platform to help it build the ad-supported tier of service. 

Why Microsoft of all the choices?

Microsoft Advertising is the dark horse contender for the Netflix account and a positive surprise for the industry. Notably, other potential adtech partners such as FreeWheel or Google have interests competitive to Netflix’s. They both sit inside companies that have their own content plays on streaming TV. This likely knocked them out of the race.

Prior to its acquisition of Xandr, Microsoft was not even considered a serious programmatic competitor in the industry. As an early, dominant player in programmatic display advertising, Xandr (formerly AppNexus) started focusing on the TV/video ad space after being acquired by AT&T in 2018. 

Xandr is well suited to build Netflix’s ad operation from scratch, a task that won’t be easy but isn’t new for the company. The ability to provide privacy, combined with an established ad tech stack and a strong ability to iterate quickly, helped Xandr push over the finish line. Greg Peters COO and CPO said,

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering. More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members. “

Interesting Read: Marriott International : A Hotel or An Ad Tech Company?

What does this mean for advertisers?

Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. The Microsoft platform will be the exclusive provider of all Netflix ads.

In the future, a Netflix subscription with ads at a lower price may entice value-seeking customers. With Netflix entering the ad-supported streaming world (AVOD), advertisers will have access to a wide range of premium inventory.

As AVOD continues to expand, this partnership not only supports the momentum but also creates more competition in the field. The recent Disney partnership with the Trade Desk also gives advertisers access to more premium AVOD inventory.

Interesting Read: Connected TV Explained: The Essential Glossary Of CTV

Why do we care?

With Netflix getting into the AVOD market, the equation changes entirely for TV watchers who compare steep cable subscription fees with rising streaming costs.

CTV advertising is known for its chaos, consumer dissatisfaction, and controversy. Netflix has never faced any of these issues. The biggest challenge will be to maintain the balance between efficient monetization and retaining subscribers who are used to ad-free content.

The question of the hour: Does this partnership really push the envelope on ad innovation?

Certainly, Microsoft brings gaming to the table, where there are opportunities and innovation, but there is still much room for development. If It could be magic if these new partners are able to translate this kind of next-gen thinking into the more traditional streaming TV ad ecosystem.

Interesting Read: Is Microsoft Reinventing Its Ad Business With Massive Acquisitions?

Is Microsoft Reinventing Its Ad Business With Massive Acquisitions?

Microsoft has a sizeable ad business. In the latest earnings call, the company reported the advertising revenues “surpassed $10 billion, ex-TAC [traffic acquisition costs]”. The company believes its vertical will grow in the mid-to-high teens. 

“Across Bing and Edge, we are creating differentiated, high value experiences for consumers and advertisers in key verticals, including shopping. More broadly, we are expanding our opportunity in advertising.”

–CEO Satya Nadella

The company has taken center stage with its recent notable acquisitions -gaming giant Activision Blizzard and a leading adtech company Xandr.  Recently, Nadella said, 

“And with our acquisition of Xandr, we will bring to market new advertising solutions that combine our deep audience understanding and customer base with Xandr’s large-scale data-driven platforms.”

Does all this mean the stirring of a sleeping giant in the ad industry? Microsoft has access to an extremely powerful first-party data operation based on subscriptions. Even though Bing, Edge, and MSN may seem passe today. However, Microsoft still has a huge audience which includes Xbox, Game Pass, LinkedIn, and Outlook.

Interesting Read: 5 Ad Industry Trends That Are Likely To Unveil in 2022!

All The Ingredients Of The Ad Business

Despite the size and stellar performance of its ad business, Microsoft has not really been seen as a true rival for Google and Facebook in the advertising sphere. It’s been some time since Amazon officially dispensed Microsoft from the “Big 3” of digital media, joining Google and Facebook among the world’s largest digital advertising companies.

Still, analysts do not seem to have discounted Microsoft’s ad dominance. As GroupM Business Intelligence Global President outlined in a report, “We estimate advertising to be a $15 billion business in 2021.” These figures are before Xandr’s acquisition; making Microsoft the fourth largest player outside of China in ad sales. Weiser attributes this to a surge in overall ad demand, as well as LinkedIn‘s success in recruiting advertising following the “Great Resignation.”

Ad offerings from Microsoft currently include ads on its search engine Bing, placements on its O&O networks, as well as its Microsoft Audience Network, a programmatic network that places native ad units on properties like CBS Sports and Fox Business. This is in addition to its retail media offering PromoteIQ.

There is still plenty of opportunities for Microsoft to enhance its ad revenue even beyond what it is currently doing. For its advertising business, the company has “bold ambitions”, especially around data, audiences, and international expansion.

Interesting Read: A Panoramic Perspective Of Amazon’s Advertising Business!

Xandr- A crucial ingredient 

The acquisition of Xandr (formerly App Nexus) will not only solidify Microsoft’s position as a prominent ad tech player but also develop capabilities in the demand-side and supply-side of advertising.

On the supply side, it helps them monetize their data and ID better because in the past, they didn’t sell that outside of their own businesses but now they can do so with Xandr. On the demand side, it helps them secure more budget.

Xandr and Microsoft had a close relationship before their merger, which may have led to a much better outcome. Recent acquisitions have the potential to awaken the sleeping giant. In contrast to before, Microsoft has more content, data, and now technology. All walled gardens possess this very powerful characteristic. So, is there a new walled garden in making? Experts interpret this acquisition as Microsoft’s bid to build a walled garden with a buying platform, unique inventory, persistent ID layer, and proprietary data.

Activision Blizzard- an advantage to ad-funded gaming

Xandr’s purchase is a drop in the ocean compared to the Activision Blizzard deal. This acquisition provides a shortcut for Microsoft to ramp up its content offerings. It will also help to build out their audience, a key area for Microsoft’s ad business.

Activision’s great content could also boost subscription numbers for Game Pass, assuming the regulatory approval. Both are hoped to drive future growth for Microsoft’s gaming division as revenue models and platforms shift in the industry. Activision Blizzard’s developer resources will expand Microsoft’s ability to make games, and as a result, the company’s metaverse plans will be bolstered.

Interesting Read: 6 Data Privacy Trends To Look Out For In 2022!

Cross-Platform Monetization 

Microsoft could increase sales and monetization by connecting its various tech properties, such as CTV and in-game ads. ( Note-Video game consoles support streaming apps for the CTV category.)

In addition, the search business presents them with a great opportunity to grow their advertising revenue. As Bing is the second-ranked search engine in the U.S., Xandr can integrate its search intent data. 

Xandr can help Microsoft build out its in-house ad tech stack. Ads across their content portfolio could be served through Xandr. The company could start an open demand-side platform and plug Xandr in all the in-game inventories. Xandr could be the link between all their inventories, even on consoles. Publishers can upload some creativity to appear in games like Candy Crush, Call of Duty, and the Xbox storefront. However, few experts are not convinced of any brand link between the Xandr acquisition and the Activision Blizzard acquisition as the space of adtech is quite further down the chain.

Microsoft’s own mobile apps, native content, and CTV assets can be monetized through Xander’s DSP, SSP, and Xandr Curate’s audience data-fueled curation capabilities. These capabilities serve as a powerful foundation for the omnichannel advertising ecosystem.

Interesting Read: All You Need To Know About Connected TV Advertising!

Wrapping Up

As a credible alternative to the current market leaders, Microsoft’s brand could undoubtedly be instrumental in establishing the advertising offering as a viable proposition. However, Microsoft will require to overcome two points at issue- lack of non-search DNA and mobile app monetization. The company has predominantly focused on search. Also, it is a learning curve for Xandr too, as mobile app monetization and native is not its expertise.

History shows that mere having adtech sprinkled with data or inventories on top won’t suffice to compete with the likes of Google or Facebook. Much more is needed to succeed realistically and very few companies have it. And Microsoft is absolutely one of them. Challenges lie ahead but are achievable. A matter of time for sleeping ad giant to wake up!

Interesting Read: The Ultimate A-Z Glossary Of Digital Advertising!