Snap Collaborates with Microsoft for Advertising Integration in ‘My AI’ Chatbot Feature

Snapchat has teamed up with Microsoft to introduce a new advertising strategy within its AI chatbot, My AI, which was launched earlier this year for Snapchat users. In May, Snap revealed plans to test Sponsored Links in My AI—these are link suggestions integrated into users' conversations with the AI assistant.

For instance, if a user asks My AI for dinner recommendations, the chatbot could respond with a link sponsored by a nearby restaurant or a food delivery service. Similarly, if a user seeks weekend getaway ideas, My AI might provide links from airlines or hotels, or suggest where to purchase a product from a local store.

At a recent advertising event, Microsoft confirmed its partnership with Snap for these Sponsored Links. Utilizing Microsoft Advertising’s Ads for Chat API, Snap’s Sponsored Links will seamlessly connect users with relevant advertisers, allowing brands to engage audiences at the precise moment of interest. This feature will be available to Microsoft Advertising clients in the U.S. and selected markets.

The concept of integrating advertisements into AI chatbot interactions isn’t unique to Snapchat. Shortly after launching Bing Chat, Microsoft began testing ad placements from over 7,500 partner brands to assess traffic generation to publishers' websites via chatbot users. Similarly, Google has tried integrating ads into its AI chatbot within Search, referred to as the Search Generative Experience (SGE). For example, a user searching for a new bicycle may see product recommendations aligned with their inquiry.

Snap's ad experience will function similarly to Bing and Google’s, presenting Sponsored Links tied to ongoing conversations. Microsoft's Ads for Chat API, introduced in May, is based on technology used by Bing but allows third-party partners like Snap to customize their advertising formats for their specific audiences. Early users of the API will have the opportunity to influence its development, as Microsoft seeks feedback from partners using the service in their applications, including Snapchat.

This advertising collaboration marks a significant achievement for Microsoft's advertising division, which has become a preferred choice for tech companies seeking alternatives to Google. For instance, Netflix partnered with Microsoft to support its ad-supported tier last year, choosing a company without direct competition in streaming services. With the introduction of My AI ads, Snapchat could evolve into a go-to platform for Gen Z users seeking products and services through AI chats instead of traditional search engines like Google.

Snap has indicated that the Sponsored Links feature is still in its "early experimental phase," aimed at crafting meaningful and valuable experiences for users. The company also mentioned ongoing collaborations with various partners to enhance My AI in the future.

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