"Although it's hard to recall the pre-chatbot world, ChatGPT and Perplexity only launched a little over three years ago, and Microsoft's Copilot followed a year later. In that short time, AI and AI search have taken root, and ads were bound to follow. The heat of the moment Chatbots could unlock major opportunities for advertisers - specifically, the ability to reach consumers at the exact moment they're ready to purchase something, with a highly specific understanding of what they're looking for."
"Because users prompt chatbots with very specific queries - often including details like desired price range and even their preferred brand - advertisers get an "unheard of" level of contextual understanding, said Nishant Khatri, PubMatic's EVP of product management. Which leads to the question traditional publishers don't want to face now that their biggest rivals are encroaching on one of the few advantages they had left?"
Ads are appearing inside chatbots and AI search, creating uncertainty about how platforms will integrate advertising without disrupting user experience and how brands can stay authentic. Chatbots launched only a few years ago, yet AI search adoption has accelerated rapidly, making ads inevitable. Chatbots can offer advertisers precise context from user prompts, including price range and brand preferences, enabling highly targeted messages. Traditional publishers face declining traffic from AI search and Google AI Overviews and must adapt by AI-ifying sites, partnering with platforms, or building their own chatbots to access emerging monetization and AI search budgets. Blending ads into conversation poses design challenges.
Read at AdExchanger
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