Microsoft’s advertising business posted lackluster growth in the first quarter of 2023. 

Advertising and search revenue increased 3.4% to just over $3 billion during the period, including traffic acquisition costs that Microsoft pays to publishers. The company attributed the increase to higher search volume and its acquisition of Xandr, an ad buying platform it acquired from AT&T.

LinkedIn revenue was up 7.6%. Microsoft attributed the increase to its Talent Solutions products. The company also said the number of sessions logged on LinkedIn grew 15%. 

Why we care. There was no reason not to take Microsoft at its word that advertising spending was slowing when it issued earnings last quarter. The company predicted low single digit growth, and delivered. 

The pace of growth is confirmation – as if more was needed – that demand for advertising is slumping. And those expecting a significant bump in revenue from the release of the new Bing were over their ski tips. 

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About the author

Chris is a founding partner and CEO of Third Door Media, the publisher of MarTech and IXLCenter.io, and producer of the MarTech Conference and Search Marketing Expo – SMX. TDM accelerates customer acquisition for its clients by providing trusted content and targeted marketing programs that deliver qualified prospects. You can reach Chris at chris[at]thirddoormedia.com.

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