Microsoft introduces AI chat monetization for digital partners
4 mins read

Microsoft introduces AI chat monetization for digital partners

Microsoft this week introduced the Ads for Chat API: an advertising solution designed to monetize AI chat experiences in a seamless and engaging way.

According to the announcement, the ads for the Chat API would create native advertising experiences that benefit partners, consumers and advertisers.

Who would benefit from the Ads for Chat API?

The Chat API ads may benefit those using AI-powered chats, including:

  • Partners (select publishers, apps and online services) who may monetize content shared during chats.
  • Advertisers who could reach audiences engaging with partner chatbots on relevant topics.
  • Consumers who could use their chats to find the right product or service recommendations.

Although the original announcement didn’t provide any details on which partners will have access to the API, a recent blog post suggests that the group could include Microsoft Start partners.

A Microsoft spokesman added that the company will soon provide more information about partners, adding:

“Microsoft is looking to partner with online services, apps and publishers who are investing in their own AI chat functionality and want to monetize it through advertising.”

Ultimately, AI chat advances could allow partners to generate more revenue while creating an experience that fits their audience.

In a recent interview, Kya Sainsbury-Carter, Corporate VP of Microsoft Advertising said:

“The power of this technology is to help our clients be more efficient at a time when we need to do more with less, improving not only the return on ad spend, but the return on time spent with advertising.” using our platforms. This is a huge opportunity for us.”

When asked about the growing concern over AI generative chat services reducing the traffic publishers receive from organic search, Sainsbury-Carter replied:

“The value proposition we see going forward specifically for publishers is to generate more traffic and clicks – not less – and ensure publishers and partners make more money. So we’re exploring how we can share Bing Chat ad revenue in different ways by learning what behaviors look like.”

In a recent blog post, Microsoft’s Corporate Vice President & Consumer Chief Marketing Officer, Yusuf Mehdi, also reassured editors of Microsoft’s intent:

“…we’re also exploring additional opportunities for publishers, including our more than 7,500 Microsoft startup partner brands. We recently sat down with some of our partners to start exploring ideas and get feedback on how we can continue to distribute content in ways that matter to our partners in terms of traffic and revenue.”

How does the Ads for Chat API work?

Using the Ads for Chat API, partners select the ad formats that audiences prefer to include in chat content.

Like native advertising, it focuses on delivering ads that blend into the platform’s content and user experience while maintaining a consistent look and feel.

By offering partners the ability to customize ad formats, the advertising experience adapts to the platform’s native environment, creating a less disruptive experience for consumers.

The API can serve ads on chat platforms developed by Microsoft or other companies, which allows advertisers to reach a broader audience network.

Microsoft continues its AI advances

The launch of ads for the Chat API follows Microsoft’s recent unveiling of next-generation AI capabilities in Bing and Edge and the end of the Bing AI waitlist.

With over 100 million daily active Bing users, Microsoft could offer publishers a profitable new revenue stream and advertisers an expanded ad audience.

At its upcoming Microsoft Build event, Microsoft plans to showcase the latest developments in GitHub Copilot, Machine Learning, Azure OpenAI Service, GPT-4, .NET and more.

Due to changes to OpenAI’s data usage policy, the data used to train the language models does not include information shared via the API unless users explicitly consent to contribute it for this purpose.

Featured Image: Daniel Chetroni/Shutterstock