Your Guide to Microsoft Advertising + Tips From the Pros

Microsoft Advertising is your ticket to reaching customers at scale across Microsoft properties. Get up to speed on campaign setup, ad costs, pro tips, and how Microsoft ads compare with Google Ads.

Does your pay-per-click (PPC) advertising strategy focus completely on Google Ads? If you aren’t using Microsoft Advertising, you could be missing out on key opportunities to reach your customer base at a comparatively lower cost per click (CPC).

In this article, we’ll cover everything you need to get started with Microsoft Advertising, including an introduction to objectives and ad formats, a campaign walkthrough, and pro tips to improve your ads.

What is Microsoft Advertising?

Microsoft Advertising is a PPC advertising platform that helps brands reach potential customers across the Microsoft network, including partner sites.

As an advertiser, you can place ads in search results on Bing, Yahoo, and AOL as well as on sites like MSN, Microsoft Edge, and Outlook.

If you use the ad network for connected TV (CTV) ads, you have even more options. You can place CTV ads on streaming platforms like Netflix, Paramount+, and HBO Max.

Many Microsoft ads use a CPC model. In other words, you generally pay when someone clicks on your ad, rather than when someone sees your ad.

However, brand awareness campaigns typically use an impression-based model with cost-per-thousand impression (CPM) pricing.

What goals can you achieve with Microsoft Advertising?

With Microsoft ads, you can achieve goals throughout the marketing funnel. The advertising network supports these campaign objectives:

• Building brand awareness to introduce your business, products, and services to new customers
• Generating leads by driving potential customers to your website
• Driving conversions, including selling products in your Microsoft Merchant Store
• Promoting your app to improve discovery and drive more downloads

Which ad formats does Microsoft offer?

When you promote products or services with Microsoft ads, you can choose from several different ad formats.

Responsive search ads

Microsoft search ads are primarily text-based ads that appear above organic results on the AOL, Yahoo, DuckDuckGo, and Bing search engines.

They’re triggered when the keywords you target align with the query a user types into the search engine.

For instance, the QuickBooks ad below appeared above organic search results for the query “How to hire a CPA.” In addition to a headline and a description, the ad includes several clickable sitelink extensions.

When you set up responsive search ads, you input several headline and description options. Microsoft Advertising automatically combines them to drive optimal performance.

The ad platform also offers dynamic search ads. This ad type doesn’t require a list of keywords. Instead, the platform automatically generates search ads based on your website or landing page.

Product ads

Product ads also appear in search results, where they’re triggered by keywords. But unlike search ads, product ads promote a single product.

They include a product image, name, brand, and price. In some cases, they also include callouts like “free shipping.”

To run product ads, you first have to set up a Microsoft Merchant Center store. Microsoft shopping campaigns pull images, copy, and pricing directly from your Microsoft Merchant Center feed.

Multimedia ads

Multimedia ads display on the right sidebar in search results on Bing and other Microsoft properties. Like responsive search ads, multimedia ads are triggered by keywords.

These ads include both text and images, as the Expedia example below shows. Microsoft Advertising creates these ads automatically by combining relevant, top-performing headlines, descriptions, and images.

Audience ads

Audience campaigns include native and display ads, which appear on sites like MSN, Outlook, and Microsoft Start. These image-based ads grab attention as they read news and browse Microsoft partner sites.

For example, the MSN homepage features a display ad by Hertz and a native ad by Amazon:

Performance Max

Performance Max is an AI-powered campaign type that handles much of the campaign and ad setup for you. Once you provide the assets and targeting signals, Microsoft’s AI creates and optimizes ads automatically.

In addition to the time savings, Performance Max allows you to create multiple types of ads in a single campaign. It can create product ads, responsive search ads, multimedia ads, and more.

How does Microsoft ad targeting work?

The targeting options for Microsoft ads depend on the type of campaign you run and the data sources available to you. Some of the most common types of targeting include:

• Keywords, which let you bid to show ads to people use certain search terms
• Age and gender, which let you reach people who fit your ideal customer’s demographics
• By device, which lets you reach people on specific devices
• Purchase intent signals, which let you target people actively shopping in specific categories
• Remarketing, which lets you target people who have visited your website or viewed your ads
• Customer data, which lets you target your existing prospects or customers
• LinkedIn profile, which lets you target people based on data from the professional networking site

Microsoft also offers predictive targeting, which is designed to help you reach new audiences. You can use it independently or combine it with the targeting options above.

How to create a Microsoft Advertising campaign

Follow these steps to set up a new Microsoft ad campaign. Note that the steps may appear in a different order depending on the campaign type you choose.

1. Choose a campaign goal

Open your Microsoft Advertising dashboard and click the “Create” button in the upper left corner. Choose one of the five preset goals that best aligns with what you want to achieve.

For example, choose “Build brand awareness” for top-of-funnel objectives. Pick “Drive conversions” or “Sell products” for bottom-of-funnel objectives. Alternatively, click “Skip” to build a campaign manually.

2. Pick a campaign type

The goal you choose determines the available campaign types. For example, brand awareness campaigns allow display ads, native ads, video ads, and CTV ads. Conversion campaigns allow search and audience ads.

3. Check campaign settings

Give the campaign a name. Then, choose the location and language for your audience.

Depending on the campaign type, you may need to confirm other settings, too. With search campaigns, for example, you’ll have the option to enable dynamic search ads.

4. Set up an ad group

You’ll find most targeting options at the ad group level. To set up a search ad group, you’ll need to create keyword lists. Use Microsoft Advertising’s automated tool to generate keyword ideas automatically.

With audience ads, you’ll have options to target in-market audiences, create retargeting audiences, and upload customer match lists. This campaign type also allows device-based targeting.

5. Build an ad

Now you’re ready to create an ad. For visual formats like display ads, native ads, and video ads, the process involves uploading a creative.

For text-based formats like responsive search ads, you’ll need to write multiple headlines and descriptions. Multimedia ads require headlines, descriptions, and images.

6. Add ad extensions

While ad extensions aren’t available for audience ads, they’re crucial elements for search ads. These components give you the option to include calls-to-action (CTAs), pricing, sitelinks, and promotions in your ads.

With extensions, you can also display your phone number to prompt customers to call you, show reviews as a point of social proof, and feature your business’s location details.

Ad extensions don’t increase the cost of your campaigns. Instead, they give your audience more information and more opportunities to click. As a result, they may increase your click-through rate (CTR).

7. Decide on a budget and bid

Finally, set a daily budget for the campaign and choose a default bid. Microsoft Advertising automatically suggests a bid, which is helpful for new advertisers.

If you have past campaign metrics to draw from, use them to set a bid manually.

With some campaign types, you can also adjust the bidding strategy. For example, search campaigns allow you to set a CPC bid, maximize clicks, choose a target return on ad spend (ROAS), and other options.

Note that neither the budget nor the bid has to be set in stone. You can adjust both of these elements after you review campaign performance and revisit your advertising goals.

Pro tips for Microsoft ad campaign optimization

Create and optimize campaigns efficiently with these pro tips for stellar Microsoft ad campaigns.

Import campaigns from other ad platforms

If your business already advertises on other platforms, you don’t have to create Microsoft ads from scratch. Rather than creating a new campaign, choose the “Import” option instead.

Microsoft Advertising allows you to import campaigns from Google Ads, Meta Ads, and Pinterest Ads. You can also import campaign setup data from a CSV file.

Use AI tools to generate advertising assets

Most Microsoft ad campaign types include generative AI tools to help you create high-performing ads faster. For example, the platform can generate display ads from your landing page.

It can also generate search headlines and descriptions from your landing page.

And when you create Performance Max campaigns, the platform can generate most campaign elements for you, based on your landing page. Make sure you review each asset carefully and edit or replace as necessary.

Plan search campaigns with Microsoft’s keyword planner

You don’t have to rely on third-party tools or external research to build keyword lists. Instead, use the native Microsoft Advertising keyword planner tool.

With this tool, you can generate new keyword lists from your website or landing page. You can also check search volume and estimate costs to plan your search campaigns more effectively.

Why you should use Microsoft ads

Unsure if Microsoft ads are right for your search engine marketing (SEM) strategy? Here’s why you should seriously consider leveraging this ad network.

Microsoft’s search network is growing

Google is by far the largest search engine worldwide, with an 82% share of desktop searches as of January 2024. However, Bing has an 11% market share, and it’s grown steadily since 2022.

Keep in mind that when you advertise with Microsoft ads, Bing ads are just one placement option. Ads can also run in Yahoo, AOL, and DuckDuckGo search results.

You’ll have an easier time reaching PC users

Many Microsoft ad placements are built into Windows products. As a result, PC users are more likely to see and engage with them.

For starters, PC users rely on Microsoft Edge as a default browser and Bing as a default search engine. As an advertiser, you can also place ads in Microsoft 365 and Outlook as well as in Microsoft Start, the platform’s news aggregator.

How many PC users can you reach exactly? Microsoft reports that 686 million unique PC users perform 13.9 billion searches every month.

You can connect with in-market decision-makers

According to Microsoft’s data, search advertisers can reach an educated and relatively affluent audience. Almost 35% of users are college graduates, and 36% have a household income in the top 25%.

Among B2B users, 52% are decision-makers, and 26% are senior decision-makers. And in many verticals, a high percentage of users are planning to make a purchase. For example, 100% of users in the automobile segment are planning to buy a vehicle in the next three months.

Microsoft Advertising vs. Google Ads: Which should you choose?

Can’t decide how to allocate your search advertising budget between Microsoft vs Google ads? Use these tips to develop the right approach for your business.

When to prioritize Microsoft Advertising

Microsoft ads are a smart choice when your target audience includes primarily PC users. This ad network is also helpful for reaching audiences on major streaming platforms like Netflix and Hulu.

“Choosing Microsoft ads over Google Ads makes sense if you’re targeting a B2B audience,” explains Will Yang, Head of Growth & Marketing at Instrumentl. “Microsoft ads tend to perform better on LinkedIn-connected platforms like Bing, which is heavily used in professional settings.”

Curious about who uses Microsoft ads? Finance and healthcare businesses, retailers and ecommerce brands, and B2B companies have all seen success with this ad network.

Because Microsoft ads reach a comparatively smaller audience, the ad network tends to have lower competition. As a result, costs can be lower. According to Microsoft, the average CPC for the network is $0.84.

“Microsoft ads allow us to make the most of our budget by generating more clicks for the same investment,” shares Eli Itzhaki, CEO and Founder of Keyzoo.

“Our average CPC on Google was about $2.50, whereas on Microsoft it was closer to $1.80. This makes a significant difference in our overall ad spend and ROI.”

When to prioritize Google Ads

Google ads are a good choice when you want to reach a larger audience that generates a mind-boggling number of searches every day. Google handles about 8.5 billion searches every day.

With Google Ads, you can also reach customers on a range of different platforms. With this ad network, you can place ads in Google search, YouTube, Gmail, and millions of websites in the Google Display Network.

However, because Google Ads has a larger user base, it tends to be more competitive. More competition often means higher costs for advertisers.

When to allocate for both in your budget

You don’t necessarily have to choose between the two ad networks when you run PPC campaigns. Instead, many advertisers opt to include both Microsoft and Google ads in their digital marketing strategy.

By running ads on both, you have the potential to reach the largest possible audience. As a result, you can also collect and analyze more data.

With this approach, “we’re able to optimize our campaigns based on performance data,” Itzhaki explains.

“We can see which keywords perform better on each platform and adjust our strategy accordingly. This dual approach has increased our visibility and helped us fine-tune our ad spend to get the best results.”

Running ads on both networks gives you comparative data, which can prove helpful. As a result, they “help you refine your targeting and messaging. Just ensure you’re prepared to analyze and adjust each channel separately,” Yang suggests.

A strong PPC strategy also factors in risk management. “My general recommendation is to test placements on both platforms simultaneously, at least at first,” shares SEO expert James Dooley.

“It gives you data to compare performance and make adjustments. And if something changes with one platform, having a fallback helps reduce risk.”

Most successful PPC campaigns include a healthy dose of experimentation. “The most important thing is trying different approaches and seeing what resonates best with your audience,” Dooly advises.

“Don’t be afraid to experiment. That’s how you’ll discover the most effective path forward.”

The takeaway

Whether you want to connect with customers as they search Bing, read news on Microsoft Start, or browse MSN, Microsoft Advertising can be a smart investment.

In many cases, it can supplement Google Ads campaigns and help you achieve goals at a lower CPC.

However, you don’t have to experiment with Microsoft ads independently. HawkSEM is a Microsoft Advertising Partner, and our team of PPC experts is here to help. Contact HawkSEM for a PPC audit today.

This article has been updated and was originally published in April 2020.