Customized Advertising Promotion..."Insert Links in Responses"
Attention on Whether Google, Dominating 90% of Search Engines, Can Be Surpassed
Microsoft (MS), which has entered the 'search engine AI chatbot battle' with Google, has been actively holding briefings around the world over the past month to secure advertisers. Since dominating the search engine market is directly linked to advertising revenue, MS is providing information to advertisers on how they can utilize AI chatbots.
On the 13th (local time), the US economic media Business Insider reported, citing multiple sources, that MS has recently been holding events and private meetings worldwide for advertisers and advertising agencies, introducing Bing, a search engine equipped with AI, which is undergoing experimental implementation.
Unlike traditional search engines that simply provide desired information, AI chatbots conduct conversational searches, and MS has reportedly presented advertisers with rough plans on how to attach advertisements accordingly.
For example, when asked, "Which is better for children, Tenerife Island (in northwest Africa) or Fuerteventura Island (in the North Atlantic)?", the Bing AI chatbot provides an answer with annotations, and MS introduced that advertisements such as flight booking links can be attached there. They also added that hotel advertisement pop-up windows could appear.
However, attendees said MS has not yet clearly answered how it will deliver targeted advertisements during the use of the Bing AI chatbot service. There are ambiguous aspects regarding ad execution, such as whether ads will be displayed based on the user's questions or based on AI-generated content within the conversation results.
Currently, the new Bing AI chatbot does not include advertisements. Instead, experiments are being conducted by incorporating ads previously displayed on Bing into the chatbot's answers. Business Insider quoted one attendee saying, "(MS) said that text ads, multimedia ads, and product ads will not be created separately but will be able to be included in the new Bing AI chatbot."
Advertising is the primary revenue source for search engines. Google currently holds over 90% of the search engine market share. Google's advertising revenue last year was $224 billion (approximately 293.1 trillion KRW). In comparison, MS's search engine advertising revenue in the past 12 months was only $18 billion. Although this is an increase from $10 billion a year ago, it is still far behind Google.
In this context, the emergence of AI chatbots is regarded as a major event that could change the online advertising landscape. Since 40% of last year's online advertising revenue was generated in connection with search engines, if the leadership in search engines shifts from Google to MS due to AI chatbots, the advertising market will inevitably follow suit.
According to marketing company WordStream, as of 2021, Google's advertising cost per click was on average 33% higher than Bing's, Business Insider reported.
MS expects that as AI features are added to Bing and another web browser, Edge, enhancing the search experience and expanding users, the number of advertisers will increase. MS explained last month, "Every 1 percentage point increase in market share in the search advertising market results in a $2 billion increase in advertising revenue."
Google also unveiled its own AI chatbot 'Bard' last month and is conducting internal experiments, but has not yet announced any advertising-related plans.
Advertisers are paying attention to the fact that MS's new Bing AI chatbot has reached 100 million daily active users amid public interest in ChatGPT, the generative AI chatbot developed by OpenAI, in which MS has invested. Dennis Vesterbik, who attended the MS advertising roadshow held in Amsterdam, Netherlands, said, "We are seeing people moving to MS, which means advertisers are being offered opportunities to reach more potential customers through the platform."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
