In recent weeks we’ve received a lot of inquiries from advertisers, agencies, and other partners about our approach to working with third parties who resell our inventory (who we call channel partners). I referenced the topic in a three-part post back in June, but in the wake of our recent partnership with Yahoo! and AOL, this is an opportune time to reaffirm our position and unequivocally articulate the strategy and principles that drive it.
One of the key pillars of Microsoft Advertising’s long term strategy - and one that is shared throughout the company – is a commitment to be an enabling influence in the ecosystem in which we participate. The guiding principle is that we need to operate in such a way that our actions benefit not only Microsoft, but the overall ecosystem as well. The digital advertising business today is vibrant, famously fragmented, and therefore complex. We believe that there are three approaches that businesses like us can choose from to help minimize this complexity:
- Own end-to-end capabilities in a single vertically-integrated stack, eliminating the need to work with multiple providers
- Institute policies that restrict engagement with 3rd parties, eliminating the choice to work with multiple providers
- Maintain an open approach with a focus on decreasing the friction involved in working with multiple providers
At Microsoft Advertising, we believe that option 3 is the best choice.
As a large publisher of premium inventory like MSN, Windows Live, and Xbox Live, we have a choice in how we monetize our inventory and help marketers reach their target audiences. We can use our inventory to create solutions and sell them directly to advertisers and agencies, or we can rely on channel partners to do that for us. We believe that employing a combination of these two sales channels is the best way to meet marketers’ needs while also maintaining our inventory yield goals – two things which, in the long run, are the healthiest approach for the ecosystem overall.
A key tenet to this approach is that while we utilize all the technology, data, and creativity at our disposal, we know that others in the industry are doing the same, and that in doing so, they bring unique assets to bear. Though we may be accessing the same inventory, each company is not creating the same solutions. Both as a publisher looking to increase our yield and as an advocate for the consumers and brands we work on behalf of, we’re interested in employing all available solutions.
We acknowledge that it can be difficult to differentiate between partners who are creating unique solutions and those that are not. Different publishers have chosen to navigate this challenge in different ways. At Microsoft Advertising, we have been very pleased with the launch of the Microsoft Advertising Exchange as a platform through which partners can efficiently use our inventory as a raw ingredient to power solutions they build for marketers. And we have been equally pleased with the control we maintain over that demand and the results it has produced for our bottom line. The launch of the Exchange in 15 markets around the world since March of 2011 has increased the choice and scalability of solutions available to marketers, while simultaneously improving our yield as a publisher.
To sum things up, I want to underscore Microsoft’s commitment to a combination of the solutions that we develop in house as well as the innovation our partners provide. Whether you are an advertiser wanting to take advantage of the increasingly sophisticated solutions flooding the market, or a channel partner looking for the premium inventory to make your offering come alive, Microsoft can help. Reach out to your Microsoft rep to find out more about how you can take advantage of our in-house offerings, our Exchange, or both!