In a significant move that aligns with its broader strategic vision, Microsoft has announced the closure of Invest, its once-prominent AppNexus DSP business, further solidifying the company’s shift away from third-party programmatic advertising. This decision, while not entirely unexpected, highlights Microsoft’s evolving priorities within the competitive ad tech ecosystem. Since acquiring Xandr from AT&T in 2021, Microsoft has been deprioritizing the third-party programmatic landscape, instead opting to build its own advertising solutions that are more integrated with its first-party assets. This shift reflects the broader trend among walled gardens in the digital advertising space, where major players like Meta, Google, and Amazon prioritize monetizing their proprietary platforms over engaging with external ad tech vendors.
The closure of Invest is not the first time Microsoft has scaled back its third-party initiatives in favor of internal growth. Last year, the company also shuttered PromoteIQ, its third-party retail media ad tech business. This move is part of a broader trend where large tech firms are distancing themselves from the complexity and scrutiny of the open internet, including the privacy and antitrust challenges associated with third-party advertising. Instead, Microsoft is doubling down on its own assets, which include Xbox, Gaming, Bing, Copilot, MSN, Outlook, Edge, Windows, LinkedIn, and its extensive Microsoft publisher network. According to Kya Sainsbury-Carter, Head of Microsoft Advertising, the company will continue to integrate with external Demand-Side Platforms (DSPs), but the core focus will now be on leveraging its own ecosystem to connect demand and deliver targeted, personalized experiences directly through Microsoft’s owned platforms.
Microsoft’s decision to focus its advertising efforts on its own properties mirrors the strategies employed by other digital giants in the space. Meta, for instance, has long been focused on monetizing its own platforms, such as Facebook and Instagram, while maintaining control over user data and advertising experiences. Similarly, Google and Amazon have been streamlining their advertising offerings, emphasizing their own properties like YouTube, Google Search, and Amazon Marketplace. The Trade Desk’s Jeff Green recently noted that Google’s third-party ad network has been declining for years, while its proprietary properties continue to thrive. This reflects a broader industry trend, where advertising on walled gardens has become a dominant force in the digital advertising world, leaving third-party networks to navigate increasingly complicated legal and regulatory challenges.
Microsoft’s shift also comes at a time when antitrust scrutiny on the ad tech industry is intensifying. The ongoing legal battles, including the DOJ’s antitrust suit against Google, have underscored the risks associated with third-party advertising. By consolidating its advertising efforts around its own platforms, Microsoft aims to mitigate these risks while still capitalizing on the growing demand for personalized, data-driven advertising solutions. Sainsbury-Carter framed the closure of Invest as part of a broader reset of Microsoft’s advertising business, aligning it more closely with the company’s focus on generative AI and conversational, personalized digital engagement.
As Microsoft pivots towards this new vision, it’s clear that the future of digital engagement will be more agentic, more conversational, and highly personalized. By aligning its advertising strategy with its first-party assets, Microsoft is positioning itself to lead in the next era of advertising, where personalization and direct engagement will be the key drivers of success. As the digital advertising landscape continues to evolve, Microsoft’s approach sets a bold precedent for how companies can adapt to the changing dynamics of privacy, data ownership, and platform control. It remains to be seen how this will play out, but for now, Microsoft is positioning itself as a leader in the new wave of advertising that embraces AI-driven solutions and first-party ecosystem dominance.
