Home Latest News How Bing's AI chat will challenge search advertising – Ad Age

How Bing's AI chat will challenge search advertising – Ad Age

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Microsoft fused Bing with the AI technology that is used in ChatGPT.
Not everyone welcomes the new AI overlord to Bing search, especially companies that work in open web advertising markets, where money flows to publishers after a web searcher clicks over to a website. But if consumers get all their answers from an AI chatbot, the publishers could get nothing.
Earlier this month, Microsoft fused Bing with the AI technology that is used in ChatGPT, the experimental chatbot developed by OpenAI. Early testers don’t just search Bing but chat with it.
Advertising experts wonder how the AI will change search ad specialties that have evolved over the past three decades—entire companies have grown up to handle keyword advertising and search engine optimization. Publishers also lean on search as the portal for the web, providing all of their clicks.
Related: A generative AI guide for brands
“There is great cause for worry about what these AI chatbots will mean for the open web over the next five to 10 years,” said Andrew Casale, president and CEO of Index Exchange, the programmatic ad tech firm. “An AI that can endlessly articulate anything you wish to know about a given subject, over time, will lead people to use the open web less.”
Add that to the growing list of concerns for publishers who count on website visits to serve targeted ads to readers and make their money. Publishers already are dealing with the deprecation of cookies on web browsers—Apple blocked them on Safari and Google intends to follow suit in 2024—which degrades the ability for a website to target ads. Cookies have been a cornerstone of programmatic ad auctions, relied upon by publishers to derive higher ad rates, because cookies are repositories of personal information that inform the ads. Also, search has been one of the main sources of referral traffic for publishers and retailers, by capturing web users through sponsored links and images in search queries.
Microsoft is changing the game by integrating AI into Bing and the Edge browser, which could fundamentally alter the way advertising works. Earlier this month, Microsoft opened AI chat in Bing, and in its presentation, it showed off how search ads look in that setting. Instead of a prominent link atop a search results page, links are inserted into citations within the AI chat responses. In one example, a person could ask Bing about 9/11 victims and compensation, and the chat cites the websites from which it gathers the information. In the citation, which is a numbered footnote, links are embedded and there is room for a sponsored link.
Sponsored images also appear in, say, a chat query about 4K TVs, which displays the ads in a carousel below the chat. In many ways, the ads look like traditional sponsored content, but it remains to be seen how often chat users will click on those links. Search ad specialists are worried about how the click-through rates, the number of times a person reads the citation or visits a site, compare to old-fashioned search.
Sponsored images also appear in, say, a chat query about 4K TVs.
“The big concern is not just about publishers,” said Barry Schwartz, a contributor to the publication Search Engine Land and founder of RustyBrick consulting firm. “The concern is about how search monetizes and how advertisers take advantage of that.”
“Who is going to mouse over a link to see the citation, and if they do are they going to click on it,” Schwartz said.
The ads look like traditional sponsored content, but it remains to be seen how often chat users will click on those links.
This week, Reuters reported that Microsoft was already talking with major ad agencies about the potential for AI in advertising products. Scwhartz was at the presentation for Bing’s chat AI debut and said Microsoft shared examples of chat search ads.
“The potential of this new technology is only just being explored with new opportunities to rethink traditional ad experiences and ROI scenarios on a broad set of advertising objectives,” a Microsoft spokesperson said in an email. “We look forward to innovating with our partners and the industry. Beyond this, Microsoft has nothing more to share.”
Brands, such as Coca-Cola, already are rethinking their marketing to accommodate AI tools, and ad agencies, such as WPP, are talking about how they have embraced the new technology. AI is not just affecting search, but creativity, too.
Read more: Coca-Cola embraces ChatGPT
AI already has a role to play in Microsoft ads, and within Google and Meta, which owns Facebook and Instagram. Internet ad companies have been using AI to fill in gaps left behind as more personal data gets stripped from the web, such as is happening with the death of cookies and other identifiers. Microsoft and Google both use AI to help understand search queries and then place the most relevant ads. Generative AI can also help create the best combination of headlines and text to optimize the chances for a click.
Of course, Bing is only a small portion of the search market, about 3%, according to Statcounter, leaving Google the dominant player. However, since introducing AI features into its internet products, Microsoft has been capturing more attention. Google, meanwhile, announced an AI chatbot called Bard, which would affect its search experience, too.
Ad tech companies and publishers will need to adjust their tactics to catch up with AI chat in searches, according to Nicole Perrin, VP of business intelligence at Advertiser Perceptions, a research and business intelligence firm. Marketers are proficient in classic search engine optimization strategies, but they don’t know yet how to get a chatbot to surface their material.
“Just like with SEO, you become an expert by figuring out what works,” Perrin said. “They’re going to have to figure out what works at being an expert of the Bing chatbot.”
This week, Microsoft also revealed an AI chat assistant in Edge, its browser, which can answer questions for people as they visit websites. In Bing, the chatbot answers almost anything—it can spit facts, recommend restaurants, recite sports scores and recap the news.
“It’s a safe assumption, and we’ll have to see in practice,” Casale said, “but there will be a dramatic reduction in traffic that comes by citations in chat versus organic results in a search.”
If people stay within the search environment, brands must reevaluate how they measure search marketing, and where the value comes from, Perrin said. “Advertisers need new metrics to measure the effectiveness of their search advertising [and] search marketing, relying on measuring via clicks when clicks are no longer necessary for consumers to complete the activity they are doing won’t make sense.”
In this article:
Garett Sloane is Ad Age’s technology, digital and media reporter. He has worked in newspapers from Albany to New York City, and small towns in between. He has also worked at every advertising industry trade publication that matters, and he once visited Guatemala and once rode the Budapest Metro.