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Boost your creativity and productivity with Retail Media Creative Studio powered by generative AI

January 11, 2024
Female shop worker smiling while checking her smartphone.

Retail media is a fast-growing industry that is expected to reach $100 billion in the next five years and will account for over 25% of total digital media spend by 2026, according to BCG.

Microsoft Retail Media is at the forefront of this sector, offering the most complete omnichannel retail media solution in the advertising market, and is now using generative AI to create new opportunities for retailers, advertisers, and consumers.

We announced the integration of Artificial Intelligence (AI) in 2022 and now we’re taking it to the next level with the launch of the Retail Media Creative Studio leveraging generative AI, which can be used to create customized and engaging content for retailers, advertisers, and consumers. Microsoft Retail Media is not just a platform, it’s a holistic omnichannel retail media solution that connects retailers and advertisers with consumers across multiple touchpoints.

Microsoft is a leader in AI and we’re excited to demonstrate how generative AI can unleash the potential of retail media at NRF 2024: Retail’s Big Show in New York City.

Transforming retail media with generative AI

We’re announcing the launch of Retail Media Creative Studio, a comprehensive, end-to-end banner ad creative solution tailored for retail media. Retail Media Creative Studio will be available in preview in the Microsoft retail media platform (powered by PromoteIQ) in January 2024. With Retail Media Creative Studio, we’re leading the way in using generative AI for retail media. Our solution is designed for the specific needs and challenges of retail media, based on customer feedback. With this creative management solution, retailers and advertisers can boost creativity and productivity by generating banner creative with ease, thereby improving banner ads’ participation, performance, and ultimately revenue. With the easy-to-use AI-powered tools, retailers can also support the full breadth of their advertisers, especially the smaller ones who may not be equipped to run effective banner campaigns, thereby unleashing the full potential of banner ads’ growth in retail media programs.

Retail Media Creative Studio is only the beginning of our journey in leveraging generative AI in retail media programs. As Microsoft is leading how generative AI transforms our life and work, we aim to unlock powerful generative AI offerings to transform retail business across personalization, efficiency, and monetization. From simplifying campaign creation through to generating campaign insights, our vision is to harness the power of generative AI to deliver a more personalized shopping experience for retailers’ consumers and ultimately, improved campaign performance and program revenue.

Elevating creativity and productivity with Retail Media Creative Studio

Regardless of retailer or advertiser size, producing high-quality ad creative at scale is challenging. This is because retailers and advertisers must heavily rely on professional services or in-house teams for creative work, which can limit banner campaign participation when resources are tight, resulting in low fill rates, and revenue for retailers’ banner ads business.

With Retail Media Creative Studio, retailers and advertisers can use generative AI to create captivating banner ad creative in mere seconds based on a product’s URL. AI-generated banner creative will automatically align to each retailer’s style guide, saving time for manual resizing or repeated tweaks.

In addition to easy banner generation, retailers and advertisers can rely on Retail Media Creative Studio as an everyday design companion that offers seamless banner editing with user-friendly integrated features—all powered by generative AI. This allows them to:

  • Transform a simple product photo into an eye-catching lifestyle image with a simple prompt such as “put this sofa in a cozy living room.”
  • Simply input preferred words and phrases into the tool and be wowed by the various tailor-made headline options.
  • Crop and clean up any unwanted background or words in an image with a single click.
  • Easily modify all banner elements from imagery to headlines until their vision comes to life.

With Retail Media Creative Studio, retailers and advertisers can explore infinite creativity.

After advertisers create banners, retailers can control what appears on their websites through a streamlined creative review process. Different retailer teams can work together to review and approve the same set of banner creatives, enhancing cross-functional collaboration and speeding up the creative approval process so that advertisers can launch campaigns faster.

Once the banner ad campaign goes live, Microsoft Retail Media also leverages AI-powered algorithms to choose and display the most effective banner creative based on key performance metrics such as click-through rates (CTRs) and sales conversion rates. With AI-driven optimization, advertisers can improve banner campaign performance without spending time running A/B testing. This in-flight optimization can unlock incremental revenue for retailers and advertisers.

Retailers and advertisers are unlocking the full potential of generative AI in retail media

With Retail Media Creative Studio, retailers and advertisers can leverage Microsoft's cutting-edge generative AI technology and deep retail advertising knowledge to create and optimize banners that meet specific business goals.

By partnering with Microsoft Retail Media, each retailer can harness the power of generative AI technology, training and iterating the generative AI models continuously to further tailor them based on the retailer’s unique requirements.

To learn more about Retail Media Creative Studio available in preview, visit Microsoft Retail Media.

From NRF 2023 to now: delivering on our vision

Microsoft Advertising has grown through acquisitions (PromoteIQ, Xandr) and partnerships (Netflix, Roku, Yahoo) to offer innovative solutions for digital advertising and have signaled a new era of collaboration centered on consumer relevance. We announced changes to some of our platform names, reflecting this evolution, where PromoteIQ became Microsoft Retail Media.

Last year at NRF, we announced Microsoft Retail Media In-Store proof of concept, which supports our vision of enabling retailers to succeed in an omnichannel consumer landscape that includes unified measurement across onsite and offsite channels.

Today, we’re delighted to share progress on our In-Store pilot.

Microsoft Retail Media In-Store will provide a comprehensive omnichannel solution for retailers; integrating in-store will unlock a more complete view of the shopper's journey and enable advertisers to optimize their investments. In-store ads face challenges such as fragmented channels, disparate hardware, and lack of measurement. Microsoft can help solve these problems by offering a unified omnichannel solution for running, optimizing, and measuring campaigns across all retail media channels.

Our in-store measurement solution shows promising outcomes for solving a long-standing challenge of disconnected measurement across online and offline channels. This is an innovative offering that Microsoft Retail Media can provide, thanks to our distinctive capabilities and partnerships.

We’ve made significant progress since our last NRF update in January 2023. We’ve partnered with Vibenomics, a Mood Media Company and leading expert in audio ads, with an in-store network reaching over 170 million monthly unique shoppers in the US. 1 This scale provides the perfect partnership to collaborate and integrate in-store channels. Vibenomics provide the hardware and Microsoft Retail Media will manage measurement, providing unified reporting and attribution. The goal of this successfully completed pilot was to create an omnichannel retail media solution that integrates onsite, offsite, and in-store channels. We’ve demonstrated the effectiveness of our audio activation solution in collaboration with Vibenomics, and our solution has shown a positive impact on sales metrics with an unnamed yogurt advertiser that ran onsite and instore advertising, resulting in an increase of 40% higher household spend and 50% share of category results.

We’re excited about our collaboration with Microsoft Advertising to bring omnichannel retail media capabilities in-store. Our expertise in infusing in-store audio and display experiences within the broader shopping journey complements Microsoft’s strength in measuring true campaign impact across online and offline touchpoints. This integration demonstrates the vast potential of unifying digital and physical channels to immerse audiences while also providing advertisers transparency into what messages inspire action.

— Paul Brenner, SVP of retail media and partnerships at Vibenomics, a Mood Media Company

Our vision is to build a future that adapts to the changing demands of retailers, advertisers, partners, and consumers, by offering cutting-edge retailer monetization capabilities, and engaging shopper experiences. We help retailers and advertisers connect with customers online and offline, using advanced retail media solutions.

To partner with Microsoft Retail Media, contact us.

To learn more about Retail Media Creative Studio available in preview, visit Microsoft Retail Media.

Help us improve Microsoft Advertising

Your comments and feedback are integral to shape and improve our product. You can use the Microsoft Advertising Feedback portal, in-product feedback, Twitter, or Instagram, and as always, contact Support.

[1] aggregated point-of-interest data (chain-level cross-sampling of average monthly visits within the retail stores that we serve from October 2022 to September 2023)


  • Lynne Kjolso


    Lynne Kjolso

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