Microsoft Ads Chief Rob Wilk On Why Advertising Is The Company’s ‘Newfound Religion’

Microsoft is the multitrillion-dollar advertising company that nobody saw coming.

There’s a reason for that. Until recently, Microsoft was a distant and relatively uninvested competitor in the advertising sector. The company didn’t have ad tech, exactly, and its own properties – MSN, the Bing search engine and the Edge browser – never gained marketer mindshare.

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

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

Microsoft acquired Promote IQ, a retail media ad tech company, in 2019, and changed the name of its ads business from Bing Ads to Microsoft Advertising at around the same time, signaling its ambition. Even so, Microsoft was still only dipping its toe. But last year, Microsoft took the plunge and full-on cannonballed into ad tech with the acquisition of Xandr, although that deal needs to pass a regulatory review before it can close and Microsoft can integrate the tech.

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

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

AdExchanger caught up with Wilk.

AdExchanger: What’s your priority coming into this new job?

ROB WILK: How do we get the market to understand that what we’re doing is beyond search advertising. We have a fast-growing native business, our retail media offering with Promote IQ, we’re doubling down on 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 have available right now? 

We power our own search and the search for Yahoo, for AOL and thousands of smaller publishers and services we syndicate search ads to. That is still the core of our revenue.

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

We’re going to grow that with other Microsoft properties and get into the third-party supply business in the future. Xandr will be a big part of that.

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 contribute important data to Google’s internal ID graph. Are there similar Microsoft businesses that fill out the MSAN data but aren’t big ad revenue properties?

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

Xbox, for instance, has a console business, but it also has a cloud gaming service people pay for monthly. They have logged-in accounts. That’s just one of the areas we’re going to play in.

Imagine a world, not too far off, where all of these pieces are stitched together to make a cleaner, clearer offering for our advertisers. And, don’t forget, we’ve also got browsing information and data across gaming and the Microsoft Windows business with billions of users – this gives us a unique advantage to understand intent.

There’s a flywheel for advertising that actually starts with Windows. If a consumer loves Windows, there’s a good chance they’ll love Edge and Bing, and if we can tie things together so Edge is a stickier browser, that in turn drives more ad supply.

Is LinkedIn its own separate business with separate ad sales?

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

We also have the ability to use certain aspects of LinkedIn targeting within Microsoft Advertising which you can only get through us. For example, some clients want to reach people based on, say, job title, or the name or size of a company.

How do you bring the advertising mentality to businesses that historically haven’t been plugged into ad tech and the audience graph?

Whether it’s Google, Facebook or Twitter, the majority of the companies that we compete with are predominantly advertising-based companies. We are an ad-supported division of a very large company that makes significant revenue not in advertising.

But now that we’ve reached this level of scale – hitting $10 billion in search and news ads – we’re starting to become significant within Microsoft. That $10 billion is bigger than Mattel, bigger than Southwest Airlines and other big standalone companies. It’s bigger than Snapchat and Twitter combined.

And so there’s a newfound commitment I’m feeling from Satya all the way through to our senior 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’ve got plugs and pipes into the whole ecosystem globally that will give us a lot of opportunity to experiment and grow.

It’s a lot of pieces to keep straight.

And we’ve sent some 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 again.

It doesn’t surprise me that even people steeped in the industry are still like, “Hey, how does it all come together?” That is going to be made much clearer for our advertisers.

There’s still another pending acquisition down the road, which is Activision Blizzard. But there will come a day when all of those things are stitched together in a way you’ll understand and our clients will understand. We’re working our way through that.

What’s the biggest differentiator for Microsoft Advertising compared with the big, fully ad-based platforms?

The feedback we get from agency and advertiser partners is that we’re much more leaned in to those relationships than our competitors.

It’s just a different mentality.

Take Google and Facebook: Because we don’t have the same share that they have, our mentality is much more focused on going out and earning every dollar that we get. You do that by setting a high bar on account and on the insights and data we can provide to agencies or to help clients be better marketers.

This interview has been edited and condensed.

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