Snapchat Partners with Microsoft for Ads in AI Chatbot

Snapchat has a new advertising partner in Microsoft for the ads it’s inserting into its AI product, My AI, an AI chatbot introduced earlier this year to the wider Snapchat user base. The company in May said it would begin testing Sponsored Links in My AI — link suggestions that are paired with a user’s conversation with the AI helper.

Enhancing Conversations with Sponsored Links

For example, if a user asked My AI where to have dinner, the chatbot could reply with a link sponsored by a local restaurant or food delivery app, Snap explained. Or if the user wanted suggestions for a weekend trip, My AI could return a link from an airline or hotel. It could also recommend where to buy a product the user was inquiring about from a local retailer.

Now, Snap and Microsoft will be partnering on these link suggestions, Microsoft announced at its advertiser event last week. Powered by Microsoft Advertising’s Ads for Chat API, Snap’s Sponsored Links will connect the user with relevant partners related to their conversation, while also allowing advertisers to reach customers at the moment they have an interest in their offering, Snap explains. The feature will be available to Microsoft Advertising’s clients in the U.S. and other select markets.

Following the Trend

Turning AI chatbot conversations into a new ad landscape is not unique to Snap. Bing Chat, launched by Microsoft, also experimented with ads inserted into the chat from its partner brands. Google, too, joined the trend with ads in its AI chatbot in Search.

Snap’s ads will function similarly to those provided by Bing and Google, as they will be presented as Sponsored Links related to the conversation.

Customized Ad Experience

Microsoft’s Ads for Chat API, introduced in May, is built on Bing’s technology and allows third-party partners to control and customize the experience. This means partners can choose ad formats that best suit their audience while integrating them seamlessly. Early adopters, including Snap, have the opportunity to shape the API’s future by providing feedback to Microsoft.

Boosting Microsoft’s Ad Business

This ads partnership is another win for Microsoft’s ad business, which has been powering ads for other tech companies looking for an alternative to Google. Snapchat could potentially become a place where younger Gen Z users search for products and services through AI chats, instead of relying on traditional search engines like Google.

Snap stated that the Sponsored Links feature is still in an early experimental phase to ensure thoughtful and useful experiences for the community. Additionally, the company is working with various partners to further enhance My AI in the future.