Microsoft Outlook Rolls Out Email Message-Looking Ads to Ramp Up Business

Credit: Microsoft

Microsoft Outlook is ramping up its ads strategy as it places more advertisements in its iOS and Android apps. The rollout has been taking place for the past few months, to the surprise of many users. There is a high probability of clicking on these since they look like real email messages. Outlook provides filtering options to cut through the clutter but even if users tap on the “Focused” tab, ads still persist.

This aggressive ad strategy is reminiscent of the one adopted by YouTube in which free users are bombarded with advertisements until they avail of a paid subscription. Microsoft is no different. The company advises users to pursue a subscription if they wish to not encounter ads across all Outlook platforms. Swiping on them also works, but a new batch is generated shortly after. Meanwhile, tapping on an ad leads users to a brand page within an in-app browser, which could mar a user’s experience.

Unsurprisingly, this did not sit well with many Outlook users. Although Microsoft Outlook enjoys high ratings from both the Apple App Store (4.8) and Google Playstore (4.7), many negative reviews point out the increased ad frequency, on top of speed- and functionality-related concerns. However, Microsoft won’t likely renege on its current strategy, given how profitable ad-supported plans are.

Besides encouraging paid subscriptions, the ads are part of the Microsoft Audience Network, a branch of the company’s ad business. The network enables brands to have native ad placements across devices on Microsoft’s apps, including Outlook, and the ones from partner companies. This means Microsoft generates revenues regardless if users stick with their free accounts or upgrade to a paid subscription.

Surging Ad Business

The introduction of more ads to Outlook and other Microsoft apps signifies the company’s pursuit of its bustling ad business. According to recent digital marketing software statistics, Microsoft made $11.59 billion in search advertising revenue for the fiscal year 2022, nearly doubling 2021’s $6.94 billion. In addition, the company’s search and advertising revenue for 2022’s fourth fiscal quarter amounted to about $3 billion, which represents a 15% year-over-year growth.

Outlook has over 500 million users. A user base of this size makes for an attractive deal for brands that aim to increase their online presence, especially those introducing new products or services. Couple this with the user bases of Microsoft’s other applications and a lot of brands won’t resist such an offer. As such, there is little incentive for Microsoft to slow down its ad placement on Outlook and its other apps.

It’s not only Microsoft that’s adopting an aggressive approach to ad placements. Apple has adopted a similar strategy. It plans to introduce ads to many of its apps, including Apple News, Apple Stocks, Apple Maps, Apple Books, Apple Podcasts, and the App Store. With this, the company intends to triple the revenue from its already-successful ad business. In fact, it anticipates revenues of $6.5 billion by 2025 from mobile advertising alone.

Users will now be forced to purchase subscriptions to dodge a bombardment of ads. If it’s any consolation, paid subscriptions do offer better features and improved support.