Microsoft has starts discussing with ad agencies how it plans to make money from its revamp Bing search engine power by generative artificial intelligence as the Microsoft seeks to battle Google’s dominance.
Microsoft show off a demo of the new Bing and said it plans to allow paid links within responses to search results, said an ad executive, who spoke about the private meeting on the condition of anonymity.
Generative AI, which can produce original answers in a human voice in response to open-end questions or requests, has recently captivate the world.
As Microsoft and Alphabet’s Google announce new generative AI chatbots a day apart from the other.
Those bots, which have not yet roll out widely to users, will be able to synthesize material on the web for complex search queries.
Early search results and conversations with Microsoft’s Bing and Google’s chatbot call as Bard have shown they can be unpredictable.
Alphabet lost $100 billion (approx. Rs. 8,27,500 crore) in market value on the day when it release a promotional video for Bard that show the chatbot sharing inaccurate information.
Microsoft expects the more human responses from the Bing AI chatbot will generate more users for its search function and therefore more advertisers.
Advertisements within the Bing chatbot may also enjoy more prominence on the page compare to traditional search ads.
Microsoft is already testing ads in its early version of the Bing chatbot, which is available to a limit number of users, as per the ad executive.
As Microsoft said it is taking traditional search ads, in which brands pay to have their websites or products appear on search results for keywords relate to their business, and inserting them into responses generate by the Bing chatbot, the ad executive said.
Microsoft decline to comment on the specifics of its plans.
Microsoft is also planning another ad format within the chatbot that will be gear toward advertisers in specific industries.
For example, when a user asks the new AI-power Bing “what are the best hotels in Mexico?”, hotel ads could pop up, according to the ad executive.
Integrating ads into the Bing chatbot, which can be expand to fill the top of the search page, could help ensure that ads are not push further down the page below the chatbot.
Microsoft Limits Revamped Bing Chatbot to 5 Questions per Session, Says Long Sessions Confuse Chat Model
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Omnicom, a major ad group that works with brands like AT&T and Unilever, has told clients that search ads could generate lower revenue in the short term if the chatbots take up the top of search pages without including any ads, according to a note to clients last week.
The new Bing, which has a waitlist of millions of people for access, is a potentially lucrative opportunity for Microsoft.
Microsoft said during an investor and press presentation last week that every percentage point of market share it gains in the search advertising market could bring in another $2 billion (approx. Rs. 16,550 crore) of ad revenue.
Microsoft’s Edge web browser, which uses the Bing search engine, has a market share under 5% worldwide, as per web analytics firm.
Michael Cohen, executive vice president of performance media at media agency Horizon Media, who receive a demo of Bing during a separate meeting with Microsoft representatives, said the company indicate that links at the bottom of Bing’s AI-generated search responses could be places for ads.
Michael Cohen Said :
“They seem intent on starting off immediately with paid ads integrated,”
Microsoft also said more information about the strategy could come in early March.
Microsoft, when ask about the Parts Geek ads, said the potential of the new AI technology in advertising is only beginning to be explore and it aims to work with its partners and the ad industry.
Despite the early tests, Microsoft has not provide a timeline for when brands will be able to directly purchase ads within the chatbot, Michael Cohen and the ad executive said.
