Microsoft Acquired Xandr: Improves Ad Offerings

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All right. Good morning, Devin.

Good morning. What do we got today?

Well, you know, I've been hearing about this outfit called Xander with an X, I believe, and they have recently been purchased by AT&T. No, I'm sorry. They were owned by AT&T and sold to Microsoft, correct? Yeah. And so what are the implications of that? Because AT&T, we think about them as, you know, TV and entertainment and communications people. We think of Microsoft. Well, Microsoft has a search engine called Bing and they serve search ads and they've got LinkedIn. So how does this all fit into the picture? Where do you think this is going?

Yeah, it's probably one of the most interesting acquisitions that I think will take place in 2022. At this point, it was actually announced very quietly right before Christmas break. And I think what's interesting about this is AT&T acquired Xander not too long ago, and I think their hopes was, you know, they're going to bring in all this programmatic and digital technology and integrate it with their DirecTV online streaming offer that they had. The issue is that I think AT&T has a pretty limited data set compared to Microsoft when you look at their whole, their their whole suite of options, right? And I think AT&T really hemorrhaged a lot of money to try and make this thing sing for them, and ultimately it didn't work. So selling to Microsoft, I think, was actually a great move. And what I believe this does on the other side of the coin is that it's really going to help bump up Microsoft's ad offerings, both giving more monetization opportunities for publishers as well as obviously adding a you know, a kind of a DSP-style programmatic ad offering for retailers, for businesses. And certainly Microsoft has boatloads, boatloads, boatloads of first-party data, you know, even coming out of, you know, information coming out of LinkedIn, coming out of all the Microsoft users. So this is really a marriage that I think will take a huge chunk out of the duopoly of Google and Facebook. In terms of advertising. And that's why I'm particularly excited about it. So I think this is gonna be a big, this is gonna be a big opportunity for Microsoft.

Yeah, I think, you know, it's interesting 'cause I think Microsoft, the problem with Microsoft traditionally has been, or their challenge has been their reach, right? I mean, you got good reach in the B2B world with LinkedIn, but their search engine, you know, can't hold a candle to Google. So if you advertise on Bing, you're just, I mean, you just can't spend the money if you're doing search ads on Bing because They just, not that many people use Bing. Now, having said that, Bing is the search engine that's under DuckDuckGo, which is great for people who want privacy. And it's also the default search engine in Windows. So if you're running Edge or something like that, the default search engine's Bing. So I think their market share may be growing, but they're still up against the 900-pound gorilla. And I think, correct me if I'm wrong, but I think this kind of gives them much better reach. So if you do use the Microsoft, Microsoft ad platform, you're going to be able to spend that money. You're going to be able to reach more people and generate more business as a result, potentially.

Exactly. Yeah, I think that's always been Microsoft's big challenge with the advertising space. And that was one of the reasons why I think LinkedIn looked very attractive to them early in the game. They understood that it was a— it was the only social platform that they could really control well. And they knew that there was a big opportunity for business professionals. So that was a, that was a very strategic move on their part. I think they're seeing the value of having LinkedIn in their back pocket, right? It's generating boatloads of money for Microsoft. And so this was just another opportunity to be able to expand their digital footprint and add more technology, because really that's, that's what they need. They need more inventory available for people to purchase. And acquiring Xander, I think, will allow them to do that in that connected TV and programmatic space, which they just don't historically have. They currently don't have that offering, so this is going to be a great way to expand on that.

So Xander is going to be able to allow them to show, serve ads, not so much on a computer or a, let's say, a handheld device, but a connected TV, which could be, you know, casting from your phone, correct?

Yeah, and what I think the dream is in my side or kind of just how I'm picturing this is imagine being able to go into the Microsoft Ads platform and say, all right, I want to use this audience from LinkedIn, right? So I'm targeting X professionals at Y companies with Z scale. Yeah, I want to target them with image ads and video ads on LinkedIn, or maybe even just image ads. And then on the actual Microsoft Ads platform, bring that audience over and then say, all right, now I want to show them connected TV ads and some other programmatic banners and then remarket to them using that technology. I think that future is not too far away. We've certainly seen a huge, a huge step in inroads for other programmatic and, you know, self-serve ad platforms have just gone gangbusters in 2021. And I think that will continue to hold steady in 2022. This is another step in that direction, and it's easy to dream, right? But that, that's my hope, is we'll be able to get to that place in the future where we can leverage LinkedIn data, leverage the existing Microsoft Ads data around searches, and be able to, to just have another avenue for getting ads out there.

All right, so I know you don't have a crystal ball, but when might we see— I mean, this, this, this acquisition just took place, right? Literally less than a month ago.

It was just announced. So, okay, it probably will take a good chunk of 2022 to actually see any type of fruit, any type of fruit coming out of this. Uh, what's been interesting is that LinkedIn, or Microsoft, acquired LinkedIn several years ago, and it's been, it's been a little slower than I think people wanted in terms of getting LinkedIn data brought into Microsoft Ads, which, spoiler, if, if you're not familiar with Microsoft Ads enough, there is actual LinkedIn data that you could be using for observational purposes only at the moment, though it's expected to be released for targeting options exclusively here in the near future. Okay, but that, that migration, or that, that connection, took a couple years to actually make happen. Yeah, so I think it may be— we, we probably are still a couple years out from actually seeing Xander being integrated pretty heavily with Microsoft, but you never know. You— the other thing you've got to keep in mind is, well, Microsoft is a ginormous company with a lot of arms They are, they are pretty nimble. They stay quiet. They're, they're not as, uh, well publicized as, as Apple and Google and Facebook are, but they make some pretty quick moves, and they will, they will do the things that certainly benefit their bottom line and their shareholders. So they're ultimately— they stand to benefit from adding this in sooner rather than later, especially considering this ad market being as diverse as it is, which Actually brings up one other quick point. Uh, Cloudflare announced the, the world's most popular websites for 2021, and for the first time ever, Google is dethroned— or what seems like the first time ever, Google was dethroned for TikTok of all platforms. TikTok, get out! Yeah, I know, I know. So if you're a, if you're a B2C marketer going after Gen Z, you need to seriously consider, uh, your content strategy both organically and paid on that platform because it's now officially the most popular most visited website in the world in 2021, and I suspect that will only continue in 2022.

They have a feeling older and older, but I'm sorry, I'm feeling older and older by the day here, Devin.

I know, I know, me too, me too. I don't get it, but hey, let the Gen Zs go dance however they want. Yeah, so I think the bottom line is there's a day of reckoning coming for Google and for Facebook. Now's a great time to start exploring what other avenues and platforms are out there. And I'm really, really hopeful that 2022 Xander can make some— there could be some inroads with integrating into the Microsoft Ads platform and chipping away at dethroning, you know, both Google and Facebook in terms of that ad platform duopoly they currently hold.

That sounds great. That sounds great. That's very promising.

All right.

Well, thanks, Devin. That's been a good, good wrap for the morning. I like that.

Yeah. Yeah, definitely an interesting game. So Stay on the lookout for more, more interesting news like this. I'm sure there's going to be a lot more happening in 2022.

All right. Thanks.

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