Would you buy from an AI? Microsoft thinks you will

Microsoft is launching new interactive ad formats, including Showroom ads and Dynamic filters, designed for users of its Copilot AI.

The latest major update to Copilot AI aims to address the changing user interactions with search engines in the wake of generative AI’s rise, driven by chatbots like ChatGPT. Microsoft’s Showroom ads are intended to simulate physical product showrooms, giving users the ability to ask questions regarding products they are interested in. This new feature promotes a rich and immersive experience where users can explore digital products more interactively, much like they would in a brick-and-mortar store.

Copilot users will be invited to utilize the Showroom ads environment when they inquire about specific products, demonstrating their purchasing intent. Microsoft has stated, “This immersive environment allows users to interact with products in a way that closely mirrors the experience of visiting a physical showroom.” The company plans to introduce even richer features, including virtual brand representatives, to enhance user engagement further.  The rollout of Showroom ads is planned for select Copilot clients in April, with broader availability following.

Another new feature, Dynamic filters, aims to tailor ads to users by removing unnecessary queries and refining options to facilitate sales conversions. Microsoft reports that this feature will launch this month within English-speaking markets.

Research from Microsoft Advertising indicates that ads integrated into the Copilot UI are 25% more effective and efficient than traditional search ads, leading to improved click-through rates.

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Additionally, Microsoft is enhancing its ad business with new tools that leverage performance data to optimize advertising outcomes. These include Ads Studio, an AI-powered creative tool designed for performance marketers that simplifies the creation and management of ads. Also available is Copilot asset creation via API, which allows advertisers to utilize asset generation capabilities across various platforms, including the Microsoft Advertising Platform and its Editor.

Microsoft is also working to improve the Microsoft Monetize experience by streamlining usability and increasing quality control across platforms. Enhancements include a new homepage that centralizes monetization resources and integrates tools like Monetize Insights to help users increase revenue and resolve performance issues proactively. Copilot will assist users in navigating monetization processes, answering queries, and offering best practices.

Despite the ambitious updates, user reception of Copilot has been mixed, with many expressing dissatisfaction with recent changes. Some users and Microsoft staff have criticized the update, stating that it has “absolutely ruined the experience,” suggesting that the new Copilot interface is a step backward. Users have noted issues with functionality, including complaints about the new voice feature. Comments on social media highlight a preference for the previous Copilot version, with one user remarking, “$10 billion investment in OpenAI, and Copilot sucks compared to ChatGPT.”

As Microsoft rolls out these changes, it faces the challenge of addressing user feedback to ensure the successful adoption of its AI-powered ad strategy while dealing with concerns over previous ad integrations in Windows 11.

Featured image credit: Microsoft