Microsoft underwent big shifts in its platforms and ads business in the last year, first when it shook up its sales structure by outsourcing its direct order business to AOL and again, when it dropped $26.2 billion on LinkedIn.
And now, Microsoft is eyeing artificial intelligence.
It recently bought messaging app developer Wand Labs to beta test intelligent chat bots for Bing.
And like Salesforce’s Einstein, which seeks to democratize access to AI, Microsoft gave third-party developers access to a bot framework in June to spur the development of messaging bots.
While Microsoft aims to fuse its own digital assistant, Cortana, and Bing search intelligence into other Microsoft apps and services, the stakes grew when Google revealed Google Assistant on Wednesday.
AdExchanger caught up with Rik van der Kooi, corporate vice president of advertising sales for Microsoft, to take the pulse of its publishing and AI pursuits.
AdExchanger: What is Microsoft prioritizing as a company these days?
RIK VAN DER KOOI: We are investing a lot of time and energy into building the capabilities that allow both publishers and app developers to take advantage of [our] APIs to voice-enable their services and to then connect that back into CRM, or whichever analytics engine they want to use against those interactions.
We’re innovating to understand how a combination of natural language and machine learning translate into new ways of enabling search through personal assistants or any conversational interface.
How does that play into search?
Search will remain important. We see personal assistants moving from a basic, almost gimmicky stage right now to becoming far more mature and handling complex questions from users to surface useful answers. We’re spending most of our innovation capital taking natural language, understanding it, processing it into deeper meaning into underlying intent and then serving up relevant answers so that people use the mobile device for more of their needs.
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How will other Microsoft products benefit from AI?
Cortana’s intelligence suite runs complex data analytics against multiple large first- and third-party data sets a company traffics. That product has been in market for about 12 months, but it will permeate a lot of other Microsoft services. It’s pretty clear to us that that search intelligence can also be used within Skype or Office365 or LinkedIn.
How will Microsoft use LinkedIn data?
There are ad products we can cross-fertilize. [LinkedIn] has some great products in sponsored content that are in high demand by advertisers, and there’s just not enough supply. We are looking at ways to cross-fertilize once the acquisition closes. The second part is around data. LinkedIn, of course, has signed-in users with very deep profiles. They tend to be business profiles, but in the same way that Facebook has a lot of understanding around what people’s preferences are.
In a totally privacy-compliant way, we will be thinking about how we make advertising more relevant by combining our data sources. And those offers can be Microsoft offers, LinkedIn offers, joint subscriptions.
How is Microsoft considering LinkedIn within its broader applications, such as [Microsoft Dynamics] CRM and Cortana?
This isn’t my immediate area of focus, but [there’s tremendous benefit by connecting] the professional network of the world to one of the big CRM systems of the world. Likewise, we see a real benefit with Office365. If you think of that as the world’s largest enterprise productivity application, and the world’s largest professional network, what are the synergies we could explore there relative to how people collaborate across professional, company boundaries and inside company applications?
What was the result of all the changes to your sales org?
Although we have a number of different publishers and services like Skype, Xbox, Outlook, MSN and Windows store, we are now using partners for the monetization side. It was a big change and as a result, most of our ad sales force moved into AOL and some to AppNexus. We’ve invested a lot in a new client service team since we took over the sales effort from Yahoo, and we are getting very good feedback on that.
What are you focusing on with video?
We don’t sell any of the advertising inventory on Xbox. AOL does sell their own endemic sites and Adap.tv and Microsoft video inventory, all of MSN video and all of Xbox video, which is a powerhouse when it comes to overall video supply.
From conversations with AOL, we know if we produce more video, they’d love to have it. Quality video is still in short supply. Lower-tier video is starting to get oversupplied in the market, at least based on my interaction with a lot of the sales houses and publishers and I think we’re starting to see the trend shifting where if we could put more high-tier video into Xbox, they’d love to have it and we have to think about what is the overall user experience there.
Interview edited for clarity and length.
