Microsoft buys PromoteIQ to help retailers build on-site ad programs

Dive Brief:

Microsoft has acquired PromoteIQ, a startup that provides a vendor marketing and native ad platform for e-commerce retailers looking to build an advertising business on their sites, according to a blog post by PromoteIQ. Deal terms were not made public.
Founded in 2012 as Spotfront with a SaaS solution called PromoteIQ, the newly acquired firm will become part of Microsoft Advertising and use its own name.
PromoteIQ's client list includes Kroger, Kohl's, Overstock, Office Depot and B&H Photo.

Dive Insight:

A number of e-commerce retailers are hoping to drive advertising sales on their sites in response to demand from consumer packaged goods brands and other marketers for digital inventory that reaches shoppers looking to make a purchase. Retailers are also watching Amazon's quickly growing advertising business and see an opportunity to both compete against the e-commerce giant and develop a new revenue stream at a time when in-store sales are slowing and more consumers are researching purchases and completing them online.

PromoteIQ is a platform that helps retailers manage such on-site advertising programs in-house. By acquiring the business, Microsoft gets entry into a growing area of digital advertising and one that complements its existing ad properties. The PromoteIQ acquisition is just the latest move connecting retailers to advertising, following Walmart's purchase of ad serving platform Polymorth Labs last April and Amazon's pickup of Sizmek's ad server business in May.

In April, Microsoft split off its digital advertising from its Bing search engine to become Microsoft Advertising, in order to chart a course separate from the search engine. A key step to growing Microsoft's ad business is offering advertisers reach with additional inventory that complements its existing platforms LinkedIn, Bing, MSN Outlook and Skype — which together constitute the Microsoft Audience Network, launched a year ago.

PromoteIQ says its platform can "manage hundreds of brands promoting millions of SKUs on-site," and lets vendor-driven product placements live on a web page next to a retailer's organic site content. This opens up a potentially significant new arena of inventory for Microsoft and its digital advertising goals.

The purchase in May of cross-device identity resolution provider Drawbridge by Microsoft-owned LinkedIn may also figure into the benefits of this purchase. The ability to identify unique users across retailers and devices, such as provided by Drawbridge, could provide a kind of consistent user profile across products that, at a much larger scale, is similar to one of the factors driving Amazon's ad business.