Microsoft appears to be quietly winding down its retail advertising platform, PromoteIQ, and shifting its clients to Criteo, an external partner. Multiple sources indicate that Microsoft began informing retail media publishers about the phase-out of PromoteIQ in the summer of 2023, coinciding with the announcement of a “strategic collaboration” with Criteo.
While Microsoft hasn’t officially labeled the shutdown of PromoteIQ, it is understood that the service is being de-emphasized in favor of other retail media initiatives, leading to layoffs and a strategic pivot.
Microsoft acquired PromoteIQ in 2019, aiming to connect retail advertisers with publishers for targeted advertising using product catalogs. PromoteIQ had several high-profile clients, such as Kroger and Home Depot, which likely contributed to Microsoft’s decision to acquire the platform.
However, the move was also driven by Microsoft’s ambition to cross-sell its cloud services, particularly Azure, to retailers and advertisers who were already using its retail media technologies. At first, things seemed to go well, with PromoteIQ securing more clients like Hudson’s Bay and Sephora.
However, over the years, Microsoft realized that PromoteIQ’s advertising business was operating on slim profit margins, and it would take time for the service to become a significant revenue generator.
Microsoft Phases Out PromoteIQ in Strategic Shift Toward Criteo Partnership for Retail Media
This realization prompted Microsoft to reconsider its strategy, leading to the decision to cut back on PromoteIQ and lay off staff. Moreover, as some of PromoteIQ’s major clients, such as Kroger, began moving their retail media ad tech in-house, Microsoft’s strategy shifted toward finding an external partner.
In a notable pivot, Microsoft entered into a deal with Criteo, positioning the ad tech company as its preferred partner for onsite media. This partnership is still in its early stages and isn’t expected to generate significant revenue until 2025.
The collaboration is intended to bring Microsoft’s advertiser demand into Criteo’s publisher network, further integrating their retail media offerings. While Microsoft hasn’t explicitly mentioned PromoteIQ’s closure, industry insiders confirm that the company has been phasing out the service, creating uncertainty among some retailers who feel uneasy about the shift.
The transition to Criteo has not been smooth for all stakeholders. Some retailers expressed concerns over being nudged toward the external partner, and there are indications that layoffs will continue as Microsoft winds down PromoteIQ.
While Microsoft’s existing customers are not required to adopt Criteo’s services, the direction of the partnership signals Microsoft’s broader shift away from in-house advertising technology. The full migration process is expected to take up to a year, leaving some retailers with questions about the future of their partnerships.
This move by Microsoft underscores the dynamic and evolving nature of the retail media space. Experts, like Jason Goldberg from Publicis Groupe, note that the market is still maturing, and predicting which tools and integrations will succeed is challenging.
Retailers and tech companies must continuously evolve to maintain their positions in the market. The rise of external partnerships, like Microsoft’s with Criteo, highlights the need for retailers to build resilient, proprietary advertising systems to avoid being overly reliant on larger tech ecosystems, a lesson that PromoteIQ’s experience brings to light.
