HomeWinBuzzer NewsGoogle and Microsoft are Ramping Up AI Powered Search Ads

Google and Microsoft are Ramping Up AI Powered Search Ads

Both tech giants seek to better satisfy advertisers' needs while also improving user experience with AI-optimized search ad functionalities.


and have started incorporating artificial intelligence into their search advertising platforms, aiming to make ads more precise and engaging for users. This development reflects a shift in the digital advertising space, as both tech giants seek to better satisfy advertisers' needs while also improving user experience with AI-optimized search ad functionalities.

AI-Driven Ad Transformations

Google has recently shared details about its new AI powered methods to display ads. AI Overview ads, which utilize advertisers' current search, shopping, and Performance Max campaigns, were introduced, as well as ads for above, below, and within automatically generated summaries of search results compiled from various sources.

At the last Google Marketing Live event, the company gave one example of showing ads for fabric care products from the brands Downy and Bounce from retailers like Instacart and Walmart when users ask how to remove clothing wrinkles. Another new search format lets users upload images and various criteria to find products based on their shopping needs.

There have also been noticeable changes in how ads appear on Microsoft's Bing since the introduction of AI features. For instance, previous ads for products such as cold plunge baths were straightforward, urging users to make purchases. Now, the ads aim to inform users about the benefits of such products, showing a trend towards more educational content. The company said already last year it wants to make Bing Chat an ad-supported service.

This transition is evident in Microsoft's AI chatbot, Bing Copilot, which frequently directs users to informative resources rather than just purchase links. Complementarily, Google plans to introduce similar AI-driven ads within its AI Overviews search feature, prompting advertisers to adjust to these newly designed formats.

Challenges and Criticisms

Despite promises, the in search ads is not without challenges. Test results from WIRED and feedback from others have pointed out issues concerning ad relevance. There have been cases where searches for specific items resulted in unrelated ads, such as queries about ice baths pulling up advertisements for backpacks.

Kya Sainsbury-Carter, Microsoft's corporate vice president of advertising, has admitted that while the aim is for ads to remain relevant, there is room to improve. James Murray, senior product marketing manager for advertising at Microsoft, mentioned that Copilot ads are shaped by various dynamics, including prior user searches and AI responses, which can sometimes cause unexpected ad placements.

Another issue has been the clarity around ad disclosures. Marcus Pratt, senior vice president for insights and technology at Mediasmith, noted that some sponsored links were not clearly labeled, potentially confusing users. Microsoft is working to address these concerns based on ongoing feedback.

Advertiser Adaptation and Future Prospects

In response to the new AI-driven ad formats, advertisers are modifying their strategies. As WIRED writes, Paula Thompson's agency, for example, is shifting its focus from targeting precise product searches to broader educational inquiries. This method aims to engage users curious about new topics rather than those immediately ready to buy.

Integrating AI into search ads signifies a substantial shift in the industry, akin to the advent of smartphones. Microsoft reports that users interact with Copilot ads almost twice as much as with traditional search ads, suggesting a user preference for the AI-enhanced experience. However, the overall impact of these new ads on Microsoft's ad revenue is still unclear.

One primary concern is ensuring ads stay relevant and visible within AI-created content. AI search chatbots are designed to offer users more precise and customized information, so advertisers must seamlessly integrate their messages without interrupting the user experience. This requires careful consideration in ad placement and content development.

Markus Kasanmascheff
Markus Kasanmascheff
Markus is the founder of WinBuzzer and has been playing with Windows and technology for more than 25 years. He is holding a Master´s degree in International Economics and previously worked as Lead Windows Expert for Softonic.com.