Microsoft this week unveiled the Ads for Chat API — an advertising solution designed to monetize AI chat experiences in a seamless and engaging way.
According to the announcement, Chat API ads would create native advertising experiences that benefit partners, consumers and advertisers.
Who will benefit from the Ads For Chat API?
Chat API ads can potentially benefit those using AI-based chat, such as:
Partners (selection of publishers, apps, and online services) who could monetize content shared during chats. Advertisers who could reach target audiences who interact with partner chatbots on relevant topics. Consumers who could find the right product or service recommendations based on their chats.
While the initial announcement did not provide details on which partners will have access to the API, a recent blog post suggests that the group may include Microsoft Start partners.
A Microsoft spokesperson added that the company will provide more information about partners soon, adding:
“Microsoft aims to work with online services, apps and publishers that are investing in their own AI chat functionality and want to monetize it through advertising.”
Ultimately, partners could generate more revenue through AI chat advancements while creating an experience that fits their audience.
In a recent interviewKya Sainsbury-Carter, corporate vice president of Microsoft Advertising, said:
“The power of this technology is to help our clients be more efficient in a time of doing more with less, improving not only the return on ad spend, but also the return on time spent using our platforms. This is a great opportunity for us.”
When asked about growing up concerns on generative AI chat services that reduce the traffic that publishers receive from organic search, Sainsbury-Carter responded:
“The value proposition that we see specifically for publishers as we go forward is driving more traffic and clicks, not less, and making sure that publishers and partners make more money. So we’re exploring how we might share the ad revenue from Bing Chat in different ways as we learn what behaviors look like.”
In a recent blog post, Yusuf Mehdi, corporate vice president and director of consumer marketing at Microsoft, also assured editors of Microsoft’s intent:
“…we are also exploring additional capabilities for publishers, including our more than 7,500 Microsoft Start partner brands. We recently met with some of our partners to begin exploring ideas and getting feedback on how we can continue to distribute content in a way that is meaningful to traffic and revenue for our partners.”
How does the Ads For Chat API work?
Through the Chat Ads API, partners choose the ad formats that audiences prefer to integrate into chat content.
Like native advertising, it focuses on delivering ads that blend with the platform’s content and user experience, while maintaining a consistent look and feel.
By giving partners the ability to customize ad formats, the ad experience aligns with the platform’s native environment, creating a less disruptive experience for consumers.
The API can serve ads to chat platforms developed by Microsoft or other companies, allowing advertisers to reach a wider network of audiences.
Microsoft continues its advances in AI
The introduction of ads for the chat API follows Microsoft’s recent unveiling of the next generation of AI features in Bing and Edge and the end of the Bing AI waiting list.
With more than 100 million daily active users on Bing, Microsoft could offer publishers a profitable new revenue stream and an expanded advertising audience for advertisers.
On his next arrival Microsoft Build event, Microsoft plans to showcase the latest developments in GitHub Copilot, machine learning, Azure OpenAI Service, GPT-4, .NET and more.
As a result of changes to OpenAI’s data usage policy, the data used to train its language models does not include information shared through the API unless users explicitly agree to provide it for this purpose.
Featured image: Daniel Chetroni/Shutterstock
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