While search engines use sponsored links, Copilot and similar AI assistants haven't yet found a strong monetization method. To address this, Microsoft Advertising is introducing new ad formats specifically for Copilot's chat interface. These new ad formats are interactive and adapt based on user input.
The first format is called Microsoft Advertising Showroom ads. People generally visit showrooms to ask questions and understand the product. Microsoft is trying to emulate the same with Microsoft Advertising Showroom ads. Using this immersive ad experience, users can explore what they are searching for. For example, when a user starts asking questions about a particular product to purchase, they will be presented with this new Showroom ads experience. Rich sponsored content will showcase the product benefits, and users can also further ask questions about the product in this new experience.
In the future, brand agents will be integrated into the Showroom ads, which will allow users to connect directly with a virtual brand representative. Microsoft is planning to start a pilot of the Showroom ads in April with select clients. You can check out the demo of this experience below.
The second ad format is called Dynamic filters. When users are searching for products, product ads will appear based on the query. This new ad format will allow users to easily narrow down the product they are looking for based on their individual preferences. Dynamic filters will begin piloting in English language markets this March.
These new ad formats represent a significant step in the evolution of advertising for chat-based UIs. By leveraging interactive and adaptive experiences, Microsoft is exploring ways to effectively monetize AI assistants while delivering value to both users and advertisers.
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