Microsoft Ads chief Rob Wilk explains why advertising is the company’s ‘new religion’

Microsoft is the multi-trillion-dollar advertising company that no one saw coming.

There is a reason for this. Until recently, Microsoft was a distant and relatively underinvested competitor in the advertising business. The company had no ad tech, exactly, and its own properties — MSN, the Bing search engine, and the Edge browser — never gained notoriety from marketers.

But that will change, said Rob Wilk, who took over from Rik van der Kooi as head of Microsoft Advertising in January.

Today, Microsoft has much better toys. MSN and Bing aren’t the most exciting, but Xbox and Activision Blizzard are cool. LinkedIn may be too business-focused to be called cool, but it’s an exciting data empire, to say the least.

Microsoft acquired Promote IQ, a retail media ad tech company, in 2019, and renamed its advertising business from Bing Ads to Microsoft Advertising around the same time, signaling its ambition. Even so, Microsoft was just dipping its toe. But last year, Microsoft took the leap and went full-throttle into ad tech with the acquisition of Xandr, though that deal must pass regulatory review before it can go ahead and Microsoft can integrate the technology. .

“There’s something interesting about the change that Microsoft is going through right now,” Wilk said.

Earning $10 billion in a year, like Microsoft Advertising did in 2021, is definitely the kind of thing that makes the C-suite sit up and take notice. From CEO Satya Nadella to other organizations within Microsoft, including Xbox and LinkedIn, there’s a “new religion” when it comes to advertising opportunities, Wilk said.

AdExchanger has caught up with Wilk.


Ad Exchange: What is your priority for this new role?

ROB WILK: How do we get the market to understand that what we do goes beyond search advertising? We have a fast-growing native business, our retail media offering with Promote IQ, we’re doubling our SMB business with hundreds of thousands of advertisers – and, of course, we have our pending acquisition of Xandr.

What media and inventory do you currently have?

We power our own search and search for Yahoo, AOL, and thousands of smaller publishers and services to which we syndicate search ads. It’s still the main part of our income.

Then there’s our native business, which we call the Microsoft Audience Network, or MSAN, which today is mostly on Outlook.com, MSN.com, and Bing.

We will be expanding this with other Microsoft properties and getting into the third-party supplies business in the future. Xandr will be a big part of it.

Google has properties where it serves ads – Search, YouTube, etc. – but also properties like Gmail, Chrome, and Maps that aren’t necessarily inventory sources but still provide important data to Google’s internal ID graph. Are there similar Microsoft companies that populate MSAN data but are not large ad revenue properties?

We have first-party data signals that help us target better and more effectively.

Xbox, for example, has a console business, but it also has a cloud gaming service that people pay monthly. They have connected accounts. This is just one of the areas in which we will play.

Imagine a world, not too far away, where all of these pieces come together to make a cleaner, clearer offer for our advertisers. And, don’t forget, we also have browsing insights and Microsoft Windows gaming and activity data with billions of users – this gives us a unique edge in understanding intent.

There is a flywheel for advertising that actually starts with Windows. If a consumer loves Windows, chances are they love Edge and Bing, and if we can tie things together, Edge is a stickier browser, which in turn drives more ads.

Is LinkedIn a separate company with separate ad sales?

LinkedIn is a completely separate division – not just advertising, but the entire company. But we often collaborate and organize meetings with advertisers jointly.

We also have the ability to use certain aspects of LinkedIn targeting in Microsoft Advertising that you can only obtain through us. For example, some customers want to reach people based on, for example, job title, name, or company size.

How do you bring the ad mindset to businesses that historically haven’t been connected to ad tech and audience graphing?

Whether it’s Google, Facebook, or Twitter, the majority of the companies we compete with are primarily ad-based businesses. We are an ad-supported division of a very large company with significant non-advertising revenue.

But now that we’ve reached that level — hitting $10 billion in search and news ads — we’re starting to become big within Microsoft. That $10 billion is bigger than Mattel, bigger than Southwest Airlines and other big stand-alone companies. That’s bigger than Snapchat and Twitter combined.

And so there’s a new commitment that I feel from Satya right through to our leadership team that, hey, if we can build a $10 billion ad business, what else can we do to accelerate that?

The biggest example of the change in mentality is that we aggressively pursued Xandr. They have outlets and pipes throughout the global ecosystem that will give us plenty of opportunities to experiment and grow.

That’s a lot of parts to keep straight.

And we have sent confusing signals in the past.

If you follow Microsoft closely, we had search sales that we gave to Yahoo and then brought back. We had ad sales for years that we gave to Oath, which became Verizon and is now back to Yahoo.

It doesn’t surprise me that even people steeped in the industry are still thinking, “Hey, how does this all fit together?” It will be much clearer for our advertisers.

There’s yet another acquisition pending on the road, which is Activision Blizzard. But there will come a day when all of these things will be put together in a way that you will understand and our customers will understand. We are working to resolve this issue.

What is the main differentiator of Microsoft Advertising compared to large platforms entirely based on advertising?

The feedback we receive from partner agencies and advertisers indicates that we are much more inclined towards these relationships than our competitors.

It’s just a different mentality.

Take Google and Facebook: because we don’t have the same share as them, our mentality is much more about going out and earning every dollar we get. You do this by setting the bar high on accounts and what insights and data we can provide to agencies or to help clients become better marketers.

This interview has been edited and condensed.

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