In a surprising turn of events, Microsoft is reportedly shutting down its retail media platform, PromoteIQ, citing low profit margins as the primary reason for the decision. This news, first reported by Digiday on October 7, highlights the challenges Microsoft faced in the competitive retail media landscape.
According to Harsh Jiandani, former chief revenue officer of PromoteIQ, the platform operated on “very low margins,” which led Microsoft to prioritize profitability. Jiandani remarked that it would take considerable time before the business could achieve the milestone of generating $1 billion in revenue.
While Microsoft has not publicly commented on the specifics surrounding the closure of PromoteIQ, Lynne Kjolso, Vice President of Global Partnerships and Retail Media at Microsoft Advertising, emphasized the company’s ongoing commitment to enabling clients to access retail media inventory. This will now be facilitated through partnerships with third-party ad tech platforms, notably Criteo.
“Criteo will allow our advertisers to expand their reach to shoppers at the bottom of the funnel through a single point of entry via the Microsoft Advertising Platform,” Kjolso stated in an email.
Andrew Lipsman, an independent analyst specializing in media, advertising, and commerce, noted that PromoteIQ had a “strong reputation” prior to Microsoft’s acquisition in 2019. Lipsman pointed out that the platform was often favored by retail media networks for its flexible architecture that allowed for greater customization. However, he also mentioned a lack of clarity regarding the platform’s performance after being acquired, suggesting that it may have faced challenges, including the loss of key executives and major clients.
Microsoft acquired PromoteIQ with the goal of enhancing its retail advertising capabilities and better competing with giants like Amazon. At the time, Rik van der Kooi, Corporate VP for Microsoft Advertising, described the acquisition as a strategic move to offer retailers a comprehensive suite of technology solutions aimed at modernizing their e-commerce platforms and maximizing monetization opportunities.
As part of the transition, Kjolso highlighted that Microsoft’s tech stack, Curate, which is accessible to third parties, will help expand the inventory of curated deals available to advertisers. This allows them to reach shoppers through their preferred demand-side platform.
In summary, Microsoft’s exit from the retail media business illustrates the difficulties tech giants face in navigating the complexities of this market, reinforcing the importance of profitability and strategic partnerships in the advertising landscape.
Related Topic:
Supply Chain Leaders Predict Business Growth in Next 12 Months
