Google and Microsoft's AI search advertising strategy tested but boycotted by brand merchants

On June 9th, many advertising buyers stated that Alphabet's Google and Microsoft have inserted advertisements during their own search engine experiments with artificial intelligence, and have not yet had the option to exit or close them. This approach has angered some brands and may face resistance from the advertising industry

On June 9th, many advertising buyers stated that Alphabet's Google and Microsoft have inserted advertisements during their own search engine experiments with artificial intelligence, and have not yet had the option to exit or close them. This approach has angered some brands and may face resistance from the advertising industry.

Due to the ability of artificial intelligence to automatically generate responses to open query questions raised by users, Google and Microsoft are competing to use artificial intelligence technology to transform their own search engines. This process will overturn the original way advertisers approach consumers through search result advertising. According to research firm Magna, the search advertising market is expected to grow by 10% this year, reaching $286 billion.

In February this year, Microsoft began to release the AI Chatbot function to Bing users. Microsoft said that the company is testing to insert ads into the AI Chatbot of Bing search engine, and transfer some traditional search ads to AI generated replies.

In an interview in May this year, Jerry Dischler, Google's general manager of advertising, stated that the technology company will also use existing search ads to experiment with how to place ads in AI search snapshots. This early testing feature called "Search Generative Experience" was first launched last month. Google stated that advertising buyers are currently unable to opt out of this test.

Both companies stated that they are in the early stages of testing generative artificial intelligence advertising capabilities and are actively collaborating with advertisers to seek their feedback.

Advertising buyers say that some advertisers are cautious about spending their marketing budget on features that only a few users can use. Advertisers usually hope to control the specific location of their display advertisements, and are very concerned that their brand advertisements may appear next to inappropriate or inappropriate content.

Microsoft and Google have stated that existing protective measures in their search engines allow users to prevent advertisements from appearing in relevant search result lists by setting keywords. This function is also available in artificial intelligence search engines.

The two companies have invested over ten billion dollars in the field of generative artificial intelligence, including investments in other artificial intelligence enterprises. For example, Microsoft has invested billions of dollars in ChatGPT developer OpenAI, while Google has invested 400 million dollars in OpenAI's competitor, Anthropic. Therefore, it is crucial for them to obtain substantial income from this technology.

Media agency HorizonMedia has collaborated with insurance companies such as GEICO and Corona Beer. Jason Lee, the company's executive vice president responsible for brand security, said that testing new forms of advertising placement without brand consent is a common concern among advertisers. Another advertising buyer from a large advertising company also stated that the advertising industry will not generally recognize this approach.

According to an informed advertising buyer, in response, several major advertising clients have chosen to temporarily stop collaborating with Microsoft to advertise. The insider also said that Wells Fargo Bank continues to allocate some of its advertising budget to other channels outside of Microsoft.

In an interview, Lynne Kjolso, Microsoft's Vice President for Global Partners and Retail Media, said that the company's goal is to seamlessly introduce new forms of Bing search advertising as much as possible without increasing the workload of advertisers.

She said that Microsoft recently launched hotel advertising in Bing's Chatbot and is trying to introduce advertising in other industries such as real estate.

The number of artificial intelligence solutions provided by technology platforms is increasing. Although these solutions can bring better results to advertisers, they need to give up control over advertising to a certain extent. The resulting concerns have exacerbated the tense relationship between advertisers and technology platforms.

This is not the first time Google and Bing have restricted the control of advertisers while expanding their network, "said Samantha Aiken, head of paid search at marketing agency Code3

Aiken takes Google's PerformanceMax as an example, which is a tool that uses artificial intelligence to automatically find the best advertising placement among multiple Google products, eliminating the need for advertisers to set their own placement methods. She said that many industry insiders believe that Google PerformanceMax is a "black box" because the algorithm model does not explain how it decides where to advertise.

Three advertising buyers said that they were worried that Microsoft also lacked Transparency report, and would not explain which search keywords would trigger specific brand ads to appear in the response results of generative AI, or how effective these ads were compared with traditional search ads.

Two advertising buyers said that although Microsoft representatives also acknowledged that customers would have such concerns, they did not say when they could provide more Transparency report.

An advertisement buyer said: "Advertisers can't get the report directly, so they can find out the frequency of advertisements in Bing Chatbot."

Kjolso said that Transparency report has always been the primary requirement of advertising companies, and Microsoft's product team is "giving priority to this issue".

She said, "We are considering what additional features and control measures we need to provide to advertisers." She added that the sales team is actively working with some brands to dispel their doubts about advertising placement. Two advertising buyers from large advertising companies stated that how search engines prevent advertisements from appearing next to artificial intelligence response content containing false information is a major issue.

Keyolso explained that Bing's massive network information can provide a "bottom line" for the big language model, effectively reducing the risk of producing false information. (Chen Chen)