Microsoft is telling advertisers that the product feed, not the ad creative, is now the primary marketing asset, because the customer reading it is increasingly an AI agent rather than a person scrolling a page.

Per Microsoft Advertising’s own blog, written by Shirley Chen, Senior Director of Product Marketing for AI Commerce, AI-referred site traffic grew 693% year over year during the last holiday season and influenced roughly $262 billion in global retail sales over that period. Microsoft cites 72% of consumers expecting AI-assisted shopping within the next year, and says AI-referred visitors convert 42% better than non-AI traffic. The post lays out a three-step readiness framework for advertisers: get discovered, by keeping product feeds AI-ready inside Microsoft Merchant Center; get chosen, through AI-native ad formats, Copilot Checkout and Brand Agent; and measure what is working, using AI Visibility insights inside Microsoft Clarity.

Why it matters: Microsoft is explicit that this is a pre-holiday-season push, and its own framing treats structured, complete product data as a prerequisite for being surfaced by an AI shopping agent at all, not an optimization layered on top of a campaign that already exists. A retailer whose feed is incomplete or inconsistent is not just running a weaker ad; on Microsoft’s own account, it may not be eligible to be recommended by an AI agent in the first place, a stricter and more binary gate than traditional search ranking ever imposed.

The original insight: Microsoft’s own conversion figure is published by the company that also sells the tools to capture that traffic, and it arrives the same week this publication reported marketers trust AI advice more than they trust AI acting autonomously. Microsoft’s pitch asks brands to hand product decisions to an agent it operates end to end, from Merchant Center to Copilot Checkout, a bigger ask than the advisory role marketers say they want today. That gap, also visible in iHeartMedia’s cautious agentic buying test, is the more useful signal for a CMO than the holiday statistics themselves.

Source: Microsoft Advertising