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Microsoft and Google’s Strategy to Test AI Search Ads Frustrate Some Brands

Microsoft and Google’s Strategy to Test AI Search Ads Frustrate Some Brands


June 8 (Reuters) – Alphabet’s (GOOGL.O) Google and Microsoft (MSFT.O) are injecting ads into AI experiments without offering an option to opt out of participating, an approach that has been taken. has already unnerved some brands and risks further backlash from the US. ad buyers told Reuters.

Two tech giants are racing to modernize search engines powered by artificial intelligence that can generate written answers to free-form queries. The process will transform the way advertisers reach consumers through ads on search results, a market estimated to grow 10% this year to $286 billion, according to research firm Magna.

Microsoft is testing ads in the Bing AI chatbot, which it began rolling out to users in February, by rearranging some of the traditional search ads and inserting them into AI responses, the company said.

Google’s advertising general manager Jerry Deschler said in an interview in May that the company will use existing search ads to generate AI Search Snapshots, an early test feature called Search Generated Experiences that first became available last month. It said it plans to experiment with ad placement within. . Google said advertisers cannot currently opt out of the test.

Both companies said they are in the early stages of testing ads with generative AI capabilities and are actively working with advertisers and seeking feedback.

Ad buyers say some advertisers are wary of spending marketing budgets on features available to a limited number of users. Advertisers typically want to control where their ads appear online and are wary of appearing next to inappropriate or inappropriate content.

Microsoft and Google said existing guardrails on search engines, such as lists of blocked keywords that prevent ads from appearing in queries, also apply to AI search features.

Both companies have been pouring billions of dollars into generative AI, making it important to make money from the technology. This includes Microsoft’s multi-billion dollar bet on OpenAI, the developer of his popular ChatGPT, and his $400 million stake in Google’s OpenAI competitor Anthropic, among other his AI stakes. It also includes investments in companies.

‘Black box’

Jason Lee, executive vice president of brand safety at media agency Horizon Media, which has worked with brands such as insurer GEICO and Corona beer, said testing new ad runs without obtaining consent from brands was not an option for advertisers. said it was a disturbing act for Another ad buyer at a large ad agency also said the practice is not considered standard in the industry.

Ad buyers familiar with the matter said several major advertisers responded by temporarily increasing their ad spend from Microsoft. Of these, Wells Fargo (WFC.N) continues to ditch some of its advertising budget from Microsoft, the person added.

Wells Fargo did not respond to a request for comment.

Lynne Kjolso, Microsoft’s vice president of global partners and retail media, said in an interview that the company aims to make the introduction of the new Bing ad format as seamless as possible without adding new work to advertisers. said there is.

Microsoft recently launched hotel ads on Bing chatbots and is working to introduce ads for other industries such as real estate, he said.

Concerns from advertisers are also more likely as AI solutions are increasingly being offered by technology platforms that need to relinquish some control over advertising, although they may have better outcomes for advertisers. influences tension.

This is not the first time Google and Bing have expanded their networks while limiting advertiser control, said Samantha Aiken, paid search supervisor at marketing agency Code 3.

For example, rather than having advertisers set up different ad campaigns, many in the industry prefer Google P-MAX, a tool that uses AI to automatically find the best ad placements across multiple Google services. is an analytical black box, she said. The algorithmic model doesn’t reveal how it decides where to serve ads.

Three ad buyers said Microsoft provided a transparency report on what search terms triggered branded ads to appear in generated AI experiences, or how ads performed compared to traditional search ads. He said he was concerned about the lack of reports showing how much.

Two of the ad buyers said Microsoft officials have accepted their concerns but provided no timeline for when the more transparent report will be available.

According to one ad buyer who asked to remain anonymous about private conversations with business partners, advertisers simply pull reports to see how often they are being viewed (on the Bing chatbot). It is not possible.

Kyorso said transparency reports are a top request from ad agencies and a priority for Microsoft’s product teams.

We’re thinking hard about what additional measures and controls we need to give advertisers, she said, adding that the sales team has taken steps to alleviate concerns about where their ads may appear. It added that it is actively cooperating with department brands.

Two media buyers at major ad agencies said they questioned how the search giant would prevent ads from appearing on AI responses containing “hallucinations” or misinformation.

Bings Web information can act as a “grounding” mechanism for large language models and can actually reduce the risk of hallucinations, Kjolso said.

Reporting by Sheila Dunn of Dallas.Editing: Kenneth Lee and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.




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