Microsoft wants a piece of Google and Amazon's advertising business. Here's the pitch deck it's using to win search and e-commerce budgets from manufacturers and retailers.

Getty

Microsoft CEO Satya Nadella.

• Microsoft has increased its product offerings for brands and retailers since it rebranded its ad platform in April. One new product is Sponsored Products.
• Business Insider obtained a pitch deck on Sponsored Products that Microsoft Advertising has been presenting to brands, retailers, and ad agencies.
• The pitch is that brands and retailers can bid together on search shopping campaigns, leading to more clicks, conversions, and ROI.
• Sponsored Products are Microsoft's equivalent of Google Shopping Campaigns. Amazon has a similar product, but that's sold directly, not to retailers and brands together.
• Microsoft is pitching Sponsored Products as an alternative to Amazon, since it can plug into the Microsoft Search Network, which includes all sites powered by its Bing search engine, including AOL and Yahoo properties.
• Click here for more BI Prime stories.

Amazon may control the lion's share of e-commerce advertising budgets - but Microsoft is increasingly taking aim at them.

While much of its ad business has comprised search and network advertising on Bing and LinkedIn, Microsoft has increased its product offerings for brands and retailers since it rebranded its ad platform in April. One such product is Sponsored Products, a format aimed at making brand manufacturers' products more visible and sending more traffic to them on retailers' websites.

"Providing solutions like sponsored products is a top priority for Microsoft Advertising as we look for more ways to give retailers a competitive edge in the marketplace," Steve Sirich, GM of Microsoft Advertising, told Business Insider.

The Sponsored Products pitch is that brands and retailers can bid together on search shopping campaigns, driving more clicks, conversions, and ROI. For example, Target and Samsung could share the cost of clicks on targeted ads for promoted TVs when someone searches for TVs on Bing to drive sales on Target's website.

Business Insider obtained a pitch deck on Sponsored Products that Microsoft Advertising has been presenting to brands, retailers and ad agencies. Selected slides from the deck are embedded at the bottom of this story.

Microsoft is trying to take on Amazon and Google

A media buyer familiar with Sponsored Products said it's Microsoft's equivalent of Google Shopping Campaigns, since it lets brands themselves run shopping ads across Microsoft's network; in the past, just the retailer could do that. Amazon has a similar product, but it's direct-sold, not a partnership between retailers and brands.

"They think they've got something neat because there's a co-bidding process where the brand and the retailer can both add budget to a campaign and see it skyrocket," the buyer said.

Another media buyer, who has a retail client testing Sponsored Products, said Microsoft was trying to elevate its advertising operation to better compete with Amazon. Several slides in the deck compare Bing to Amazon, pitching Sponsored Products as reaching a different audience since it can be plugged into the Microsoft Search Network, which includes all sites powered by the Bing search engine, including AOL and Yahoo properties.

Microsoft cites Comscore data from September 2018 to show that only 36% of shopper searches happen on Amazon, versus other search engines. It also highlights how Bing users across categories like food and home furniture don't search the same categories while on Amazon, citing internal data.

Microsoft is trying to appeal to marketers who feel burned by Amazon

It also takes an indirect swipe at brands' gripes that Amazon doesn't share enough data, saying Microsoft "does not have a business interest in competing directly and your data is your data."

Microsoft's search advertising revenue was up by 13% for the fiscal year ending in June, reaching $7.6 billion versus $7 billion the previous year. The company has also secured partnerships with retailers like Kroger, Digiday reported. Still, its ad platform trails Google and Amazon, whose share of US search revenue is, respectively, 73.% and 12.9%, per eMarketer.

Read More: eBay wants a piece of Amazon's giant advertising business. Here's how it's betting on data to win over performance-obsessed advertisers.

"There's potential for Microsoft Sponsored Products to be the next Amazon in search advertising," the first media buyer said. "But if a brand is e-commerce enabled, they can upload their own catalog and redirect to their own website. So there's no real value proposition."

Here's how Microsoft is pitching itself to advertisers: