Plans For Microsoft's Bing To Make Early Pitches For AI Ads To Advertisers

As the tech giant attempts to challenge Google's hegemony, Microsoft has begun talking with advertising agencies about how it intends to monetize its updated Bing search engine.
 
An advertising executive who spoke about the private meeting on the condition of anonymity said that Microsoft demonstrated the new Bing and stated its intention to permit paid links within search result responses.
 
The world has recently been enthralled by generative AI, which can create original responses in a human voice in response to open-ended questions or requests. A day apart from one another last week, Alphabet's Google and Microsoft both unveiled new generative AI chatbots.
 
These bots, which have not yet been made widely available to users, will be able to gather information from the internet for sophisticated search queries.
 
Early search results and conversations with Google's chatbot Bard and Microsoft's Bing have demonstrated their unpredictable nature. On the day that it made a promotional video for Bard that showed the chatbot providing false information, Alphabet saw a $100 billion decline in its market value.
 
Microsoft anticipates that the Bing AI chatbot's more human responses will increase the number of people using its search function and, consequently, the number of advertisers. In comparison to conventional search ads, advertisements within the Bing chatbot might also appear with more prominence on the page.
 
According to the ad executive and advertisements viewed by Reuters this week, Microsoft is already testing ads in its early version of the Bing chatbot, which is accessible to a small number of users.
 
According to the company, it is incorporating traditional search ads—in which businesses pay to have their websites or products show up on search results for terms related to their industry—into the responses provided by the Bing chatbot.
 
Microsoft declined to provide more information about its plans in detail.
 
Microsoft is also preparing a different chatbot ad format that will be targeted at advertisers in particular industries.
 
According to the ad executive, hotel ads may appear when a user queries the new AI-powered Bing, "What are the best hotels in Mexico?" as an example.
 
Ads could be prevented from being pushed further down the page below the Bing chatbot by integrating them into the chatbot, which can be expanded to fill the top of the search results page.
 
According to a note sent to clients last week and reviewed by Reuters, Omnicom, a significant advertising agency that represents companies like AT&T and Unilever, warned clients that if chatbots dominated search pages without any ads, search ads might experience a short-term decline in revenue.
 
Microsoft may make money from the new Bing, which has millions of people on the waitlist for access. The business claimed last week that every percentage point of market share it increases in the market for search advertising could generate an additional $2 billion in ad revenue.
 
According to one estimate from web analytics company StatCounter, the market share of Microsoft's Edge web browser, which uses the Bing search engine, is less than 5% globally.
 
During a separate meeting with Microsoft representatives, Michael Cohen, executive vice president of performance media at media agency Horizon Media, saw a demo of Bing. He reported that the company said links at the bottom of Bing's AI-generated search results might be places for advertisements.
 
"They seem intent on starting off immediately with paid ads integrated," Cohen said, adding that Microsoft said more information about the strategy could come in early March.
 
This week, when a Reuters reporter asked the new AI-enhanced version of Bing how much car air filters cost, Bing also displayed advertisements for filters offered by the auto parts retailer Parts Geek.
 
If Parts Geek was aware that its advertisements were running in the new Bing chatbot, they did not respond right away when contacted.
 
When questioned about the Parts Geek advertisements, Microsoft stated that the potential of the new AI technology in advertising is still being explored and that it intends to collaborate with its partners and the advertising industry.
 
Cohen and the ad executive claimed that despite the early tests, Microsoft has not given a timeframe for when brands will be able to directly buy advertisements within the chatbot.
 
According to Omnicom's letter to clients, conversational AI will eventually take over as the primary method of internet consumer search.
 
"It is not an exaggeration to say that (Microsoft and Google's) announcements signal the biggest change to search in 20 years," Omnicom said.
 
(Source:www.reuters.com)