Focus
- 1 Led by CEO Satya Nadella, Microsoft is once again working hard to increase its share of the digital advertising market. The company has made several advertising-related acquisitions, including Xandr owned by wireless carrier AT&T and gaming giant Activision Blizzard.
- 2 Microsoft is trying to transform its digital advertising business with ChatGPT AI, starting testing ads in Bing chat replies in February. Bing is also testing photo and video ads, which will appear below the user's conversation with the chatbot.
- 3 Sainsbury Carter, Microsoft's head of advertising, says chat technology helps its customers be more productive when doing more with less. This not only improves the return on advertising spend, but also the return on time spent using the Microsoft platform.
- 4 Sainsbury-Carter believes that the rise of AI technology has made the user experience more personalized and relevant, which has also accelerated the need for advertisers to truly think digitally to remain competitive.
Tencent Technology News on April 17, under the leadership of CEO Satya Nadella, Microsoft has been working hard to increase its share of the digital advertising market, and has carried out a number of acquisition transactions that are conducive to advertising sales. Recently, Microsoft appointed a new head of advertising, Kaia Sainsbury-Carter, who is looking to transform digital advertising with ChatGPT AI.
Sainsbury-Carter, who has worked at Microsoft for 17 years, was named the company's first female leader of the company's $18 billion advertising business in March. Just weeks before her appointment, Microsoft integrated the technology behind the explosive chatbot ChatGPT into the Bing search engine and began experimenting with adding paid ad links to chat results. ChatGPT is developed by AI research firm OpenAI, a startup that Microsoft owns 49 percent of.
Led by CEO Satya Nadella, Microsoft is once again working hard to increase its share of the digital advertising market. The company has acquired a slew of advertising-related companies, including wireless carrier AT&T's Xandr, which became an exclusive partner in streaming service Netflix to help sell and support advertising, gaining a coveted customer. Now, Microsoft is working to complete a $75 billion deal to buy video game giant Activision Blizzard, which will give Microsoft another asset to sell ads. The deal is awaiting regulatory approval.
Microsoft began testing ads in Bing chat responses in February. The company said that during the trial phase, users occasionally saw ads, but it declined to say exactly how many users saw ads.
In a traditional search service, users enter a query, and advertisers can display their links in search results. Ad-based search results appear at the top of the page or in replies, often tagged with words like "ad" or, as Google does, with the "sponsored" tag.
Bing Chat, on the other hand, answers the user's questions in a conversational manner and links to pages that provide more information. In some cases, Bing links to brands that have paid for sponsored ads. While these links will not be marked as ads in the chat, users can hover over the link, and if it is a paid link, the advertising icon will appear in the link pop-up.
During the trial phase, advertisers don't bid on a single bid. For advertisers who have already purchased sponsored ads, Bing integrates their paid links into relevant chat results. At the same time, a Microsoft spokesperson explained that policies on sensitive categories of products, such as paid links to prescription drugs, will continue to be enforced in the chat experience, just like the traditional search experience.
Bing is also testing photo and video ads, which will appear below the user's conversation with the chatbot.
Sainsbury-Carter recently gave an exclusive interview to the media to discuss AI and its implications for digital advertising.
The following is the full text of the interview:
01 A moment of great change
Q: Since Bing started using ChatGPT in search results, it has attracted worldwide attention. As Microsoft integrates paid links into Bing's AI-generated search results, how will you ensure that these AI-generated responses remain useful to consumers?
Sainsbury-Carter: If you look closely at traditional search query services, they tend to be very clear, like "Show me Microsoft's stock price, the weather, or a brand, or show me the product." With the birth of new chat experiences, we are starting to see more conversations and more fuzzy queries.
So I like such improvements. I can ask Bing: "I need to throw a dinner party with six people, one of whom is vegan." Can you recommend a three-course meal?" If you put this query in a traditional search, you will get a variety of almost useless results. But if you put it into the new Bing, you get a lot of very specific things, and then you can get involved and go find the product. So, we're better able to truly understand user intent.
The power of this technology lies in helping our customers be more efficient when doing more with less. This not only improves the return on advertising spend, but also the return on time spent using our platform. This is a huge opportunity for us.
When I talk about the new Bing and conversational chat features, the term I've been using internally is "shiny utility." It's a major moment of change, and the technology is practical. But this is not always the case for new innovations. With many new innovations, it takes years to really figure out their use cases.
Q: Is the Bing team committed to controlling results to prevent them from being over-advertised?
Sainsbury-Carter: Yes, it's important to make sure consumers have a good experience. If its use becomes like driving on a highway with billboards everywhere, people won't continue to use it. This is definitely not what we want. We look forward to participating in it. In terms of ad load and user experience, we have a large number of controls. We have the highest level of metrics to measure how consumers engage with ads, such as how quickly they click away from an ad, which can indicate ad relevance or whether they intentionally clicked away.
Q: Do you expect certain searches to always be off-limits to paid links? For example, can health-related queries include paid links for drugs or supplements?
Sainsbury-Carter: We haven't fully considered all the policy updates. When you think about pharmaceuticals or financial services, we already have a pretty strict set of policies, and these topics and verticals are very sensitive and need to be aligned with how the industry operates. We're thinking about the basics of policy application, and we also need to learn if something different is needed now.
02 Share revenue with partners
Q: If search moves to a format that only provides AI-generated answers, it could cripple the traffic that current search drives to publishers' pages. How would you respond to publishers concerned that the rise of AI search could reduce ad revenue?
Sainsbury-Carter: We have a clear view that the future of search is an experience of searching, answering, chatting, and creating. By putting data into the core search experience from the start, the feedback we get is that we need to have an informed conversation with our publisher partners so we can move the model forward together. We believe the publisher's value proposition is to drive more traffic and clicks, not less, and ensure that publishers and partners make more money. So we're exploring how we can share our ad revenue in Bing Chat in different ways because we learn about user behavior.
Q: Some users have experienced scenarios where the Bing AI chatbot gets out of hand, spreading misinformation and, in some extreme cases, even threatening to destroy marriages. What are you doing to keep Bing safe?
Sainsbury-Carter: First of all, it doesn't mean that we shouldn't do what we're doing and we're going to do, but the events you're describing are meant to destroy chatbots. They are not a situation in which people interact with them normally.
But in any case, there is still a lot of work to be done to decide how to stop this contact. For example, limit the number of Q&A times per chat, as some chats are up to two and a half hours long. We have a very strong goal of not spreading misinformation, so we have done a lot of different efforts in this area. But we can also take other, more strategic efforts to ensure that people use chat tools in ways we think are more normal.
Q: Under former CEO Steve Ballmer, Microsoft spent billions of dollars trying to compete with Google in online advertising, but Google still dominates the market. Over the past few years, under Nadella's leadership, Microsoft seems to have rekindled its advertising ambitions. Why is this?
Sainsbury-Carter: Digital advertising has gone through a lot of changes over the last few years, such as changes in consumer habits and behaviors, and an increasing and ongoing focus on privacy, and we're really at that inflection point. Today, with the rise of AI technology, the user experience is more personalized and relevant, which is also accelerating the need for advertisers to truly think digitally to remain competitive. Marketers are focused on reaching and engaging the right audience in the right context and on a safe and trusted platform. As the industry shifts, our investments and innovations set us up for success. (Golden Deer)