• by Laurie Sullivan  @lauriesullivan, September 26, 2023

Microsoft on Tuesday announced the creation of a new advertising network for retailers in the U.S. wanting to quickly launch a retail media program.

The network, designed to simplify the process of creating retail media campaigns, can connect retailers with a large pool of consumers, expand reach offsite to drive traffic to websites at no cost through co-branded ads, and provide an additional buying path.

The company said even retailers with a private retail media marketplace can leverage this network to reach additional high-margin revenue.

A retail media program typically requires a retailer to invest significant time and resources to create a private marketplace for their brand advertisers, which means building teams across product, engineering, marketing, and sales. The idea is to collaboratively develop, onboard techniques to grow the program.

Microsoft estimates that building a strategy and onboarding can take months to years before the program generates meaningful revenue. The company did not say how long its process takes, but ensures “retailers can launch a profitable retail media program quickly.”

Microsoft acquired a media advertising portal called PromoteIQ to help retailers create experiences for shoppers. In July, the company went through an advertising transformation for some of its recent acquisitions. At that time PromoteIQ became Microsoft Retail Media. All services integrated with generative artificial intelligence (GAI) to re-imagine the customer and ad experiences.

Retailers are leaning on algorithms and predictive technologies like artificial intelligence (AI) and machine learning (ML) to help serve customers more personalized, curated ads. Since price is one of the most important factors in purchasing decisions, data from Insider Intelligence suggests retailers need to balance ads that promote discovery and predictive analysis with ads that serve more practical purposes like discounts or deals.

With its foot planted firmly in search, it makes sense for Microsoft to expand in retail media. The research firm Insider Intelligence believes retail media is boosting search ad spend, with Amazon accounting for nearly all of the $29.69 billion U.S. retail media search ad spend this year, though Walmart and Instacart are also contributing to retail media’s share of search ad spend.

U.S. retail media search ad revenue will grow nearly four times faster than the rest of search advertising this year, according to its forecast.