“The promise of a way better consumer experience is here. The promise of real personalization is here,” said Kya Sainsbury-Carter, corporate vice president of Microsoft Advertising.
Earlier this month, Microsoft announced new updates to its conversational search ads. The announcements offer insight into what the future of ads in generative AI (genAI) search will look like—and how advertisers should be preparing.
Microsoft’s updates to the Copilot ad experience will use entire conversations as context for delivering ads, rather than just basing ads on the last prompt. By doing this, ads can connect more closely with a users’ entire conversation. Ads will have their own “voice,” reacting to a Copilot user’s tone, intentions, and overall “vibe” throughout a conversation. The resulting ads are far more relevant to users than ads served when tracking keywords, said Sainsbury-Carter
Microsoft is also streamlining how these ads look within Copilot and introducing new diagnostic tools and a performance snapshot for its Copilot ad campaigns.
Microsoft’s advertisers can activate these search ad updates by opting into Performance Max, said Paul Longo, general manager of AI in Ads at Microsoft. Performance Max users can optimize their campaigns once and benefit twice, because optimizations for Performance Max campaigns automatically also optimize search, said Longo.
GenAI search ad personalization is no longer a distant goal. Advertisers should be setting up campaigns for success with genAI search ads now, both on Microsoft’s ad platform and on other platforms that have genAI search ad formats, such as Google and Perplexity.
GenAI search ads will enable brand advertising in a performance marketing context, Sainsbury-Carter said. Search advertising has been historically seen as a performance marketing tactic focused on the bottom of the purchase funnel by targeting consumers who already know what they’re looking for. But by incorporating a conversational brand voice, advertisers can target upper-funnel browsers as well and search can potentially serve as a discovery channel.
In the future, conversational ads may transform into what Microsoft calls “immersive ads,” which could bring Copilot users from a conversation into an immersive brand experience, such as a virtual Nike showroom, and then back into their Copilot conversations. While these transformations are likely still a couple of years away, advertisers can prepare now by making sure they are opting into genAI advertising in search and iterating with creative search advertising options as they become available.
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