On May 19, 2026, Microsoft Advertising had its annual Activate event, one of the most impressive product announcements in recent years. The Activate event is limited to Microsoft Advertising Partner Program registered users, and the key message of this year’s Activate was clear: AI is taking over more of the advertising workflow, but advertisers are not losing control. The priorities of visibility, transparency, and tangible results were the stated focus of all announcements this year.
Here is a breakdown of what was unveiled and what it means for advertisers and agencies.
The Three Forces Reshaping Marketing Right Now
Kenneth Andrew began the event with a description of the environment advertisers find themselves in. According to Microsoft, three forces are reshaping marketing right now: empowered consumers with higher expectations and more choice, a new marketing era where performance and transparency go hand in hand, and an AI-driven shift that is changing how people discover products and convert.
Microsoft’s stated position is that it wants to give partners tools that drive results, simplify workflows, and unlock growth without adding complexity.
Smarter Measurement Across the Board
One of the most practical announcements that happened at Activate was related to measurement and reporting, areas where advertisers always feel pain.
Custom Columns have been expanded to include conversion metrics. Advertisers can now build metrics like lifetime value and average order value directly inside the platform without pulling that data elsewhere.
Another improvement for Performance Max was made in terms of reporting. Now advertisers will be able to see in what channels their ads run and what search queries drive results. This kind of transparency has been a long-standing request from Performance Max users.
Microsoft announced two more improvements to measurement: Bid Strategy Reporting and Cross-Account Portfolio Bidding. The latter is especially valuable for large accounts with lots of campaigns, allowing more mature campaigns to influence the bidding strategy of newly launched campaigns in one portfolio.
AI That Keeps You in the Loop
Navah Hopkins repeatedly emphasized that Microsoft builds together with its partners, not for them. This was especially noticeable in the part where AI was discussed.
Copilot-Powered Root Cause Analysis uses AI to identify the reasons for the poor performance of campaigns, offer the opportunities for growth, and troubleshoot the conversion tracking problems. Instead of spending time analyzing the reasons why the campaign is underperforming, the tool will analyze all of it for the advertiser.
AI-Generated Creative with Brand Controls gives advertisers the opportunity to create ad materials with the use of AI while controlling the tone, messaging, and brand consistency. This directly addresses the longstanding concern that AI-generated creative tends to drift off-brand.
The biggest AI announcement was AI Max, currently in a closed pilot. It brings such features as query-matching to find new demand, real-time creative personalization, transparent reporting of the performance across assets and keywords, and experimentation tools to measure performance lift. The focus on transparent reporting directly addresses advertisers’ needs for better visibility.
What Is New With Performance Max
Performance Max remains a centerpiece of the product portfolio of Microsoft Advertising, and there are many improvements for it this year.
New Customer Acquisition Goals have been added to Performance Max, and these goals are focused on true incrementality rather than on total conversions. Incrementality measures whether a conversion would have happened anyway, which gives a more accurate picture of what the campaign is actually contributing.
Expanded controls, such as exclusions, targeting options, and publisher transparency have been added to the campaign too. Microsoft reports 8% lift in incremental conversions when advertisers use Performance Max, and this is what they show as the proof of effectiveness of this product.
Also, experiments framework has been added to help advertisers to measure the true performance impact of the campaigns, making the process of validation of this approach cleaner.
Targeting and Audience Updates
There are several improvements of audiences and targeting capabilities which are worth attention.
Impression-Based Marketing and Remarketing gives advertisers the opportunity to target users not just based on the click-throughs, but also on ad impressions. It is a significant change as it makes the connection between upper-funnel awareness activity and lower-funnel conversion activity much clearer.
Content Targeting and Placement Control provides advertisers with the opportunity to target specific Microsoft-owned properties, choose the contextual topics which fit the brand the most and get a dedicated content targeting report. For advertisers who care about where their ads appear, this is a meaningful addition. And LinkedIn Targeting has been greatly simplified. There are no more complicated steps in choosing the audience and the logic of AND/OR targeting has become more clear, making the setup easier.
Creative and Workflow Tools
Several updates of creative and workflow tools have been announced.
Ad Studio has been enhanced with improvements for AI-generated assets and brand kit management. Ad Preview Hub lets advertisers to generate live ad previews with shareable links, making the process of sending screenshots to the clients easier.
Also, the Import Center has been updated. Migration of the campaigns from Google, Meta, and Pinterest became much easier, with clear visibility of what is being migrated and optimization suggestions during the migration.
E-Commerce Got a Significant Upgrade
There have been many updates for e-commerce capabilities.
With Merchant Center, the self-service updates of store names and domains are now possible, avoiding unnecessary contacts to the support team for basic changes. Supplemental Feed Support gives more freedom in managing certain subsets of product data and promotions, without the need to restructure the entire feed.
The most progressive update is the introduction of the Universal Commerce Protocol (UCP). It will enable advertisers to use the AI to power various experiences, including Copilot Checkout, with accurate and fresh product data. With the rise of AI-driven shopping, having a proper product data flow through standardized protocol becomes vital for any brand selling products online.
The Bigger Consumer Behavior Shift
Aside from the product announcement, Activate released research on changes to shopper behavior. Kelli Kemery outlined findings that demonstrated the stability of demand while the manner of its realization fundamentally changed.
Nearly two-thirds of shoppers start their research early and many continue buying well after key shopping periods end. Most consumers also tend to compare prices and look for a good deal instead of discounts. Shoppers are flexible in switching from online shopping to offline one and vice versa; hence, visibility across both channels becomes necessary.
The takeaway is straightforward: the customer journey is longer and more deliberate. Showing up early and staying visible throughout matters more than it used to.
What Comes Next
Microsoft closed Activate 2026 by announcing the following coming opportunities: AI-focused workshops, Partner Pulse webinars, Agency Growth Forums in person in London and New York, and expanded Partner Awards for enrolled partners.
The through line across everything at Activate 2026 was clear. AI is doing more, but advertisers are not being sidelined. The tools being built are designed to give automation more power while keeping advertisers informed about what that automation is doing.
Frequently Asked Questions
Q 1: What is Microsoft Advertising Activate 2026?
Activate 2026 is an annual invitation-only event exclusively for members of the Microsoft Advertising Partner Program. It took place on May 19, 2026, and was dedicated to major product announcements, AI advancements, and roadmap guidance for advertisers and agencies.
Q 2: What is AI Max in Microsoft Advertising?
AI Max is a new AI-powered layer for search campaigns which is currently available only in a closed pilot. It introduces expanded query matching, real-time creative personalization, transparent asset and keyword reporting, and experimentation features to measure the performance lift.
Q 3: What changed with Performance Max at Activate 2026?
Microsoft added new Customer Acquisition Goals focused on incrementality to Performance Max, updated controls including exclusions and targeting features, and introduced an experiments framework. In addition, the company noted an approximate 8% lift in incremental conversions for Performance Max campaigns.
Q 4: What is the Universal Commerce Protocol?
Universal Commerce Protocol, or UCP, is a new protocol for brands allowing them to provide Microsoft with timely and precise product data to use it in AI-powered shopping experiences including the Copilot checkout. The protocol aims to help brands remain relevant to the growing AI commerce ecosystem.
Q 5: What is Impression-Based Remarketing in Microsoft Advertising?
Impression-Based Remarketing allows advertisers to target users based not only on clicks but also on ad exposure. This feature is intended to create a connection between the upper-funnel awareness efforts and the lower-funnel conversion behavior.
Q 6: What did Microsoft announce for agencies specifically?
Several valuable new features were launched for agencies, such as Ad Preview Hub for shareable live previews of the ads, enhanced Import Center to facilitate the process of migrating campaigns from Google and Meta, and simplified LinkedIn targeting with clear AND/OR audience logic.
Q 7: What is the Ad Preview Hub?
Ad Preview Hub is a tool that enables advertisers to get live preview of their ads via shareable links and thus avoid manual screenshot generation during the process of reviewing and approving ads.
Q 8: What consumer behavior trends did Activate 2026 highlight?
Research presented at the event revealed that nearly two-thirds of shoppers conduct research ahead of time, most shoppers actively compare prices and seek value instead of discounts, and consumers switch fluidly between online and offline purchase experience.
Q 9: What is Copilot-Powered Root Cause Analysis?
It is an AI feature that automatically diagnoses campaign performance issues, identifies growth opportunities, and troubleshoots conversion tracking problems, reducing the time advertisers spend manually investigating performance drops.
Q 10: What events is Microsoft Advertising planning after Activate 2026?
After Activate 2026, Microsoft announced AI-focused workshops, Partner Pulse webinars, in-person Agency Growth Forums in London and New York, and expanded Partner Awards and recognition opportunities for enrolled partners.
