When Microsoft launched its Copilot AI assistant in 2023, it included a personalized advertising element based on picking up commercial intent from user conversations. The results were promising.
Blending AI chat with ads is potentially difficult territory. But, after a recent update, the company’s advertising division is more sure than ever that the two can coalesce harmoniously.
In this video interview with Beet.TV, Paul Longo, GM of AI in Ads at Microsoft Advertising, described the beginning of an “exciting journey” for personalization and audience engagement.
Ads Accelerate Consumer Journeys by 30%
“When we launched ads as part of the conversation, there was a personalized element to it,” said Longo. “By having that ad in the conversational context versus a more traditional search context, we saw higher engagement.”
Microsoft Advertising found that ads served through Copilot were not only more engaging, with higher click-through and conversion rates, but they also accelerated consumer journeys by 30%.
The key was the relevance and personalization of the ads, and how they connected to the user’s conversation, something Longo described as the “ultimate experience”.
“You’re having a real personal conversation with a Copilot, that’s helping you to do things, but also that’s really having more of a connection to you and to your experience.”
New ‘Conversational Creative Advertising Canvas’
The latest version of Copilot, launched this month, has a faster and cleaner user experience. But it’s also more personal, with more turns in the conversation. Microsoft says it pulls users in for 10, 15 or even 20 interactions.
This “stickiness” creates a new “conversational creative advertising canvas” for brands to be super relevant and provide added value to consumers, Longo said.
Microsoft’s updated Copilot ads have more delineation between organic and sponsored conversations and feature an “ad voice” that communicates why the ads are being shown. It makes the experience more inviting and natural to the conversation.
“If you have a trusted AI companion, you don’t want that trusted AI companion selling you ads,” Longo explained. “But if that trusted AI companion could have a soft handoff and introduce you to something that is very complementary or additive to your conversation or additive to your needs, that’s where I think that real value comes in for the consumer.”
Brand Immersive Experiences and Agent-to-Agent Conversations
Longo said he sees two key areas where generative AI could transform advertising.
- The first is more “brand immersive experiences” that bring a brand’s assets to life in a showcase format, accelerating the consumer journey from conversation to conversion.
- The second is an “agentic future” where brands have their own AI copilots that can converse with a user’s personal assistant, if given permission.
“That’s where we see the future going,” Longo said. “This (represents a) more of an agentic experience where there’ll be a Copilot-to-Copilot type of a conversation.”
You’re watching “Personalization in the Age of AI,” a Beet.TV Leadership Series presented by Microsoft Advertising. For more videos from this series, please visit this page.
