Microsoft’s Move to Programmatic Real Results and Lessons Learned Kelly Davidson, Director of Global Partnerships 2017 TAtech Programmatic Summit Minneapolis, MN | June 1st, 2017

About Me Director of Global Partnerships at Microsoft Manage Microsoft’s strategic partnership with AppNexus across 58 countries. 11 Years in Digital Advertising Ad Ops at Disney Sales Engineer at PointRoll Director Technical Solutions at OpenX Friends with Matt Plummer, VP Product at ZipRecruiter (previously OpenX)

Ulrik Krag Morrell’s Proverb

What is Microsoft Advertising?

Microsoft’s Ad Scale in 2015…

not profitable Our Ad Sales Motion: O&O Inventory: Reserved Sales Prog. Sales (MAX) Search and User Profile Targeting IAB Standard Ads IAB Standard Ads Search and User Profile Targeting 1st Party Tech Platform: AdExpert 3rd Party Tech Platform: AppNexus 1,000+ Employees Local Sales Houses Majority of Revenue Declining YoY Minority of Revenue Growing YoY 50+ Employees AppNexus Support Reserved Buys (Full Day Takeover & Custom) 2nd Price Bidded Auction Ecosystem

Our AppNexus Partnership

Industry Trends

What if… We took the most common Reserved assets and made them available through programmatic channels? We trained our sales teams on selling programmatic and shifted relationships from Advertisers to Agencies/ATDs? We used programmatic deals to bridge the delta in rates between reserved and programmatic to maintain revenue? We embraced a Growth Mindset to experiment and move faster?

The Nordics Pilot Created x-company proposal for pilot with Exec approval Piloted shifting sales motion in Nordics with goal of 50% rev from programmatic (up from ~15%) Trained small sales team, led by Ulrik, to focus on prog. & deals 7 month pilot, launched in Nov 2015 through May 2016

Flat 86% What We Learned… 55% Exceeded 50% rev goal Prog. offset Res. Resource savings

What if… We applied the Nordics learnings globally? We partnered for Display AdTech and Display Sales, leveraging AppNexus more? We realized global cost savings, while preempting the rise of programmatic? We could be profitable by quickly changing our business model?

So What Happened…?

Microsoft’s World Today 49 AppNexus Markets AppNexus tech and AppNexus Microsoft Supply Evangelism Team (MSET) MSET Playbook: Find pickets of Premium Demand Covert Reserved IO Demand Increase Fill Focus on relationships Across Agencies and ATDs 9 AOL markets USA, Canada, Brazil, United Kingdom, France, Germany, Spain, Italy and Japan. AOL ONE Tech for reserved sales AppNexus Tech for prog. Sales 100% AOL Sales Team (many Ex-MSFT) 2 Sales House markets Australia/New Zealand and Mexico On AppNexus, 100% programmatic AOL-Represented Not Represented AppNexus Represented Local Microsoft Sales Partner

Profitable! How Did It Go? 28% 3x 26% 43 We went from non-profitable to profitable! 28% The amount of revenue we made from reserve (complete flip from 2015) 3x The rate difference between deals and RTB 26% YoY Programamtic Revenue growth on 4% volume increase 43 The number of people MSFT employs to run Display advertising

My Advice to You… Have big, bold goals, but track progress with small wins along the way Adopt a culture of constant experimentation and questioning the status quo Play Devil’s advocate and take the seat of a buyer Make sure you leverage the right partners and treat them like consultants

Snatch Your Eagle From the Sky!

Q&A