Google Brings Advertising to Chatbots: A New Frontier in Digital Advertising | Visual generative ai tools | Generative ai google | Google cloud skills boost generative ai | Turtles AI

Google recently expanded its AdSense for Search program to include ads within the conversations of AI-powered chatbots. The move is intended to maintain its leadership in digital advertising as generative AI transforms the search landscape.

Key Points:

• AdSense for Search now supports integrating ads into AI chatbots.
• Startups like iAsk and Liner are partnering with Google to test this new form of monetization.
• Competition from companies like Perplexity AI and Nexad is intensifying competition in the space.
• Regulators are scrutinizing Google’s influence on the digital advertising market.

Google’s move to include ads in AI chatbot conversational streams is a strategy to adapt to changing user habits, as users increasingly rely on AI-generated responses rather than traditional search results. Through AdSense for Search, Google is enabling AI-powered websites and apps to show relevant ads during user interactions, opening up a new monetization opportunity for AI startups.

Startups like iAsk and Liner have begun experimenting with this integration, showing contextual ads in response to user queries. For example, iAsk displays ads under AI-generated answers, while Liner focuses on a select number of personalized ads based on user searches, while maintaining accessibility for its core student audience.

In parallel, other companies are exploring similar business models. Nexad, an adtech startup, has raised $6 million in funding to integrate native ads into AI chat apps. Nexad’s platform uses a “flywheel” model to deliver contextual ads during chatbot interactions, honing future ads based on user engagement data. Perplexity AI is also testing ad formats within its platform, allowing brands to sponsor follow-up questions to user queries.

These moves come amid growing competition in the digital advertising market. According to eMarketer, Google’s U.S. market share of online search advertising is set to fall below 50% next year for the first time in more than a decade. The growing popularity of alternative platforms like TikTok, which lets brands target ads based on users’ search queries, and Amazon, which continues to capture a significant share of search-based ad spending, are contributing to this dynamic.

Meanwhile, regulators are scrutinizing Google’s influence on the digital advertising economy. A federal judge recently ruled that its Alphabet unit violated antitrust law in the markets for ad exchanges and the tools websites use to sell ad space. Google claims to have a dominant position thanks to the effectiveness and ease of use of its tools, but growing competition and legal challenges could affect its future strategy.

In this evolving landscape, integrating ads into AI chatbots is one of the many strategies companies are adopting to adapt to changes in user behavior and new emerging technologies.

The evolution of digital advertising continues to be shaped by technological innovation and changing user preferences, creating new opportunities and challenges for companies in the sector.

Source: Bloomberg