From clicks to connections: 3 things we learned from Microsoft’s Connect 2024 event

Here’s what we learned:

1. Early adopters win with brand-seeking consumers

Consumers shop around more, and earlier than you’d think – especially during peak seasonal moments. A Microsoft online study revealed that on average, retail shoppers consider 6.5 brands during their decision journey. Their tendency to explore new brands is also increasing: the same study showed that Microsoft users are 38% more likely to be open to new brands compared to last year. Meanwhile, half the clicks they make in October go on to drive conversions in November and December.

But there’s a problem: insights show that in the month before Black Friday, consumer engagement ramps up way more than advertiser activity. So, there’s a marketplace full of eager customers, but not enough noise from the stall holders. And that’s a big, missed opportunity for advertisers.

Marketers who connect early drive a 6-10% higher order value on average, according to a Microsoft internal study. As Microsoft’s director of advertising insights, Thom Arkestål, said: “With hotels, it’s location, location, location. And with advertising, it’s becoming more about timing, timing, timing.” In an over-saturated advertising market, his call to action was clear. Marketers should get on consumers’ radar sooner than they think and gain the competitive edge by leveraging rich audience intent signals to guide their tactics, drive brand consideration and improve conversions.

How can marketers gain a competitive advantage during peak and seasonal moments?

2. Use advertising ‘layers’ to tell richer, more personalized stories

To keep pace with changing consumer preferences, marketers are moving from traditional purchase funnels to dynamic, multi-media strategies that leverage vast, storytelling canvases which meet audiences at strategic points throughout their digital journey. Arkestål suggested that once audiences have been identified, advertisers should ‘layer up’ their strategies, much like dressing in layers for varying weather conditions while skiing: “When competition heats up or when consumer interest increases, layer up with different ad types.”

The key to creating these rich narrative layers, as ever these days, is the right kind of permissioned, audience intelligence. Specifically, that’s audience intelligence from AI-powered ad platforms, like Microsoft Advertising, which is home to over one billion people with a high propensity to spend online. According to Microsoft, users across its properties have a 49% higher income than average and are 25% more likely to purchase.

What’s the most important lever for driving successful omnichannel performance?

But it’s not all about the numbers…

3. AI-enabled marketers drive business growth

Performance marketing and data-driven media planning is only one part of the equation. Creative content is equally crucial for enhancing ROI – especially during peak moments of ad saturation. Reckitt’s chief insights and analytics officer Elaine Rodrigo referred to a recent Kantar study which “showed that about 50% of ROI can come from creativity.”

While adapting creatives across ad formats makes campaigns more effective, it can be costly. In the Microsoft Advertising Platform, Copilot can help advertisers uplevel their performance by expanding the variety of creative assets within campaigns - providing valuable support for marketers constrained by time, resources and budget.

AI tools are not just driving growth externally among consumers, but also unlocking opportunities to streamline operations and improve efficiencies across entire organisations. 74% of knowledge workers use AI to automate routine tasks and enhance productivity, freeing up their time to push the boundaries of creativity and innovation to drive growth.

However, it’s important not to adopt AI for the sake of it, but to remain focused on where it can create efficiencies for teams. Xanthe Pickford-Avery, head of search at The7stars advised that marketers need to clearly understand their challenges before implementing AI, ensuring that the technology is used strategically and with purpose. It needs to be “based around the jobs to be done for our customers and our stakeholders,” added Jonathon Palmer, LinkedIn’s head of content solutions.

As AI tools become the norm, agencies are rethinking how they hire, train and organize teams. Brands will need agencies more than ever to keep them up to speed with the fast-evolving landscape. Alex Hamilton, group innovation director at Dentsu, emphasised that agencies need to truly embrace AI by “bringing products to clients that aren’t commercially beneficial for us in the short-term, but will help us be seen as strategic partner to navigate this space in the long term.”

How can leaders deliver more impact with AI?

For more insights on how to unwrap business growth this festive season and beyond, visit Microsoft Advertising.

*Unless stated otherwise, the statistics referenced throughout this article have been sourced from a range of Microsoft Advertising internal data and analysis, earnings calls and Microsoft Advertising commissioned research.