In March, Microsoft announced that it was working towards injecting ads into Bing Chat. At the time, the company didn’t particularly have the whole plan mapped out but it did indicate that it was working closely with key industry players to establish “a healthy ecosystem.”
Ever since Microsoft debuted Bing Chat which is now in open preview, there’s been a growing concern about how it will impact the search experience for users. And while some users might have reservations about Microsoft bringing ads to its chatbot, the company’s Corporate Vice President & Consumer Marketing Office indicated that the main objective behind this move is to drive more traffic to publishers thus increasing their revenue especially after Bing surpassed 100 million daily active users.
And now, Microsoft’s plans seem to be taking shape. Earlier today, the company announced the release of Chat API for publishers, apps, and online services. It is designed to help users to customize their chat experience. This means that users will be able to select ad formats based on their preferences. What’s more, they’ll also get to pick the ads that are featured on their platforms for more engagement from the audience.
What does the new API mean for advertisers? Well, while the tool will allow publishers to curate a unique chat experience for their audience, Microsoft has indicated that it will continue to make use of the same outcomes-based metrics that it uses for ads across its services and products. “Our goal is really to focus with [publishers] on the monetization piece and to be the expert there, and for them to bring to the table what’s going to be best for their audiences and create the best overall experiences,” says Corporate Vice President at Microsoft Advertising, Kya Sainsbury-Carter
The company is opening up the platform for testing and has invited users to try it out. However, it’s not yet clear how this new entry will redefine the experience for users in terms of revenue. Kya Sainsbury further stated:
From what we hear, advertisers don’t want to be disrupted right now. Marketers are tired, they have less resources, they’ve had a crazy three years of pandemic and war and economy. People aren’t looking for wild disruption, but rather evolution and transformation that helps them move their businesses forward in a way that they have the resources to actually execute on — and this is a perfect instantiation of that type of transformation.
Microsoft is currently working towards launching hotel ads, with prospects of tapping into travel as well as real estate in the future. Compared to traditional browser-based searches Bing Chat’s responses are relatively longer. As such, incorporating ads into this experience could prove to be quite beneficial.
However, the ads need to resonate with the users for the desired engagement to be achieved. The company has stated that it is working towards getting the basics right with the aim of promoting effectiveness and efficiency.
The Corporate Vice President at Microsoft Advertising, Kya Sainsbury-Carter added that:
Integrating [ads] into chat and into the conversation flow when you’re specifically asking about these things is pretty powerful. We’re also very focused on just getting the basics right. As you can imagine with new technology, we’re paying close attention to overall optimization in the ads experience and really finetuning the marketplace to ensure we’re showing the right, relevant ads relative to this much deeper context that we are able to gain through the conversational mode.
Depending on how Microsoft moves forward with this venture, it could serve as a lucrative avenue for publishers as well as other users who build chat into their site or app to increase their income. In related news, Microsoft has also started pushing ads to the Settings Home page on Windows 11.