The tech giant plans to make it possible for paid links to show up in search results in an effort to challenge Google’s monopoly on the market.
Microsoft presented a demo of the new Bing in a private meeting with a major advertising agency and outlined its plan to integrate paid links into search results. It is anticipated that this move will increase Microsoft’s ad revenue and generate more users for its search function.
The use of Generative Artificial Intelligence (AI) has recently captured the attention of the world as it is capable of generating original answers in a human voice in response to open-ended questions. Both Microsoft and Google have recently announced the development of generative artificial intelligence chatbots that can synthesize information from the web for complex search queries.
Early search results and conversations, though, have demonstrated that they can be unpredictable. For instance, Alphabet’s market value dropped by $100 billion when it released a promotional video for its chatbot Bard, which provided false information.
Microsoft believes that integrating ads within the chatbot will prevent them from being pushed further down the search page, and the company’s new Bing AI chatbot is anticipated to offer more human-like responses. In comparison to conventional search ads, the ads may also appear with more prominence on the page. A small number of users can access the company’s early Bing chatbot version, which is already testing advertisements.
Microsoft is preparing a different chatbot ad format that will be targeted at advertisers in particular industries. For instance, hotel advertisements may appear if a user queries the new AI-powered Bing, “What are the best hotels in Mexico?” Microsoft believes that integrating advertisements into the Bing chatbot could be a profitable opportunity and that every percentage point of market share it increases in the search advertising market could generate an additional $2 billion in ad revenue.
During a separate meeting with Microsoft representatives, Michael Cohen, executive vice president of performance media at Horizon Media, was shown Bing, and the company indicated that the links at the bottom of Bing’s AI-generated search responses could serve as advertising spaces. While Microsoft has conducted early tests, it has not provided a timeline for when brands will be able to directly purchase ads through the chatbot.
Eventually, conversational AI is expected to become the dominant way consumers search on the web, and this development will likely represent the greatest change to search in 20 years. In spite of Microsoft’s refusal to comment about its specific plans, the company aims to work with its partners and the advertising industry to explore the potential of AI technology in advertising.