Bing's new AI could soon get an ad-infusion

In 2018, Microsoft published The future of AI marketing: human ingenuity amplified, on its Ads website. In it, Microsoft describes how organizations may take advantage of AI in marketing. Now, in 2023, Microsoft is reportedly planning on integrating ads into the Bing AI experience.

The report, which comes from Reuters, claims that Microsoft is already discussing advertising options with agencies. A first test on Bing has started already, but it appears very limited at this point.

Microsoft showcased a demo version of the new Bing to representatives of ad agencies to highlight the technology and its potential for marketing. According to the report, Microsoft has plans to integrate paid links "within responses to search results". It is unclear what is meant by that specifically. Options would include integrating text links into the responses of the AI, or adding ads to the responses that can be visually distinguished by users from the non-marketing part of the answer. Most likely, ads will be placed next to AI generated content, but not as part of it.

Microsoft's Bing search engine has seen a surge of users ever since Microsoft demoed the capabilities of AI in Bing. The company launched a beta program and started to invite some users already to test the new AI-powered Bing functionality. Millions more are on a waitlist at the time of writing, and it will likely take several weeks or even months before most get their invitation to start using the new Bing as well.

The low number of users who participate in the test currently give Microsoft time to figure out how to best monetize these new user experiences. Unlike traditional search results, which display lists of results based on ranking algorithms, responses by Bing's AI tend to be more in the form of dialogues.

Microsoft is considering other advertising formats, next to the traditional paid links search advertising model on Bing. One format that Microsoft highlighted specifically was to display ads to very specific queries. A user asking Bing's AI for hotel recommendation, might get hotel ads displayed in a different way.

Closing Words

Both Microsoft and Google will monetize AI using advertisement. It may not be set in stone how the companies plan to do so, but display ads will play a big role. Users may switch to using AI chats predominantly, and this would result in search ads losing relevancy.

There is also the danger of adding parameters to AI conversations that would prioritize answers that can be monetized over those that are not as easily monetized. Search engines might lose credibility if this is taken too far though, as users may wonder whether the answer itself is the best possible one, or just there to earn revenue.

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