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Turns out retail media does not spell success for everyone.
Microsoft is reportedly shuttering its retail media platform, PromoteIQ, because of low margins. Digiday broke the news on Oct. 7.
PromoteIQ’s former chief revenue officer Harsh Jiandani told Digiday that PromoteIQ operated on “very low margins” and Microsoft wanted to focus more on profitability, adding Microsoft realized “it was going to be a while” before it could earn $1 billion from the business.
Microsoft declined to comment on the specifics about PromoteIQ. However, Lynne Kjolso, VP of global partnerships and retail media at Microsoft Advertising, told Retail Brew that Microsoft Advertising continues to enable clients to access retail media inventory through “multiple avenues,” including its partnership with third-party ad tech platform 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 Microsoft Advertising Platform,” Kjolso said in an email.
Andrew Lipsman, independent analyst at Media, Ads + Commerce, told Retail Brew via email PromoteIQ had a “strong reputation” prior to the Microsoft acquisition. Promote IQ “was often selected by [retail media networks] due to a flexible architecture that enabled greater customization,” he said.
However, Lipsman was quick to add that he doesn’t have “a strong sense” of what happened post-Microsoft acquisition, but alluded to things that might have gone awry soon after. He said he’d heard that PromoteIQ “lost some key execs and big clients” after Microsoft acquired it.
Microsoft acquired PromoteIQ in 2019. At the time, Rik van der Kooi, corporate VP for Microsoft Advertising, wrote that PromoteIQ’s technology “strategically complements” Microsoft’s retail advertising offerings. The deal was meant to help Microsoft better compete with rivals like Amazon that have built sizable ads businesses on the back of the strength of retail media.
“Together, we can enable retailers with a portfolio of technology solutions to modernize their e-commerce platforms and maximize their monetization opportunity,” van der Kooi wrote in a blog post in 2019.
On the ad-buying side, Kjolso said Microsoft’s tech stack, Curate, which is open to third parties, will “grow the inventory of curated deals offered to advertisers to reach shoppers, which they can buy through their [demand side platform] of choice.”