Microsoft Advertising Is Rolling Out Ads for Chat API

0:00Welcome to Marketing School, the only podcast that provides daily top-level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Hsu.

0:20All right, so we're going to talk about how Microsoft advertising, so Microsoft is rolling out ads for its chat API. So did you read about this this week, Neil? I didn't read about it this week, but I already knew that they're rolling out ads for their API because they already talked about that before this week. Yeah. So the whole idea here is like, let's say I have chat on my website and I want to monetize my site. Maybe I don't have a monetization engine. So if I have a chat bot on my website and people are searching for things, let's say they're searching for top security tools or something like that.

0:53Well, if I'm like a security company, I can pop up an ad inside that chat interface. So the whole idea here is that Microsoft is trying to figure out new monetization models within chatbots. And I think, I mean, I haven't seen that before. I think it's interesting. It's just another spot where people are putting their attention. And I think wherever the attention is, I don't think I know what marketers are going to try to attack. So I think there are, I mean, if you're using like Intercom or Drift on your website or whatever chat tool, you can now tie it in with this Microsoft advertising API and then you can monetize chats if you want.

1:29The easiest way to think about it is it's AdSense for chat. So AdSense, what Google did was you can put ads all over on your website and you can make money when people click on those ads. Now imagine having chat on your website because of ChatGPT and Bard and all these cool tools. And now imagine being able to monetize that chat as well because some people may ask you questions for products and services you don't sell, but other people do, and it's a quick way to make money. And why not do it if you're a publisher and your goal is to make more money? Now, if you are a business trying to sell a product or service, I don't care if you don't sell a product or service, I probably would never monetize through ads.

2:11It's typically one of the worst ways to monetize as a business. I think that the key thing here going beyond this too, is that you're going to see a Microsoft or a Google, they're going to continue to test other forms of advertising. They're going to figure out where they can monetize the attention. And even this week with the Google IO kind of AI announcements, you can see when you ask a question in search, the featured snippet now, a huge chunk of the result is an AI generated result. And it might include like small snippets of the top three results, but that's taking up a lot more real estate now.

2:47And so Google is trying to test out other ways of monetization too. And so what I think we're going to see in the next couple of years is that search as we know it or ads as we know it, it's going to change because our attention is going to be, we're going to be looking at things differently. We're going to be thinking more about how we prompt things. We're going to be looking at prompts instead of search engine result pages. And I think what that really means for you is that you need to figure out how to adapt and how to adapt quickly. Because at the end of the day, I was reading this saying, so like the way investors look at things is if, how you should look at your investments is if you're about to, if you're going to lose your money, you should act very quickly.

3:26If you're trying to make money, you should be a lot more deliberate. And I think that actually applies to this as well. You should, if you think about protecting your business or protecting your niche you should act very quickly and because things are going to change very fast yeah uh dude right now what i'm seeing is everyone is trying to like use these chat tools it's kind of actually irritating i know this is a little off topic but everyone's trying to use these chat tools on their website or figure out how to plug in ai anywhere they can and what we've seen is and we've tested out ai a lot of different times or not ai we've tested out chat a lot of different times and for some businesses like our buddy yannine one third will come one third of the revenue come through chat one third through the phone uh sales and one third through i think self-service if i'm not mistaken but most businesses we test out chat with very little of their revenue actually comes from it and even if you use this ai based chat it's like right now we're seeing everyone being like oh it's the greatest thing ever let's just integrate it everywhere within our website.

4:29And what's happening is it's just creating a shitty experience. I'm not saying AI isn't great, but the bigger thing is everyone's overestimating the impact AI is going to have on their business or marketing in the short run, but they're underestimating it in the long run. Yep. So look, that's it. I mean, for this episode, I think it's just more so So be careful and not so much be careful, but be quick about how you act on these things, but also don't try to do everything under the sun when it comes to AI. So that is it for today. Yeah, it's not NASCAR. You don't need to put 100 logos or 100 different AI features on your website.

5:07You need to use the ones that make sense for your users, create a better experience, and actually drive more conversions, which you can track. If you can't do those things, you don't need to implement it. AI is great, but it doesn't need to be implemented everywhere. and it's not perfect yet. So even though in theory, a lot of stuff sounds great, the experience may not be what you think it should be. Yep. All right. So that is it for today. Please don't forget to rate, review, and subscribe. It helps us grow and we will see you later. We appreciate you joining us for this session of Marketing School.

5:40Be sure to rate, review, and subscribe to the show and visit marketingschool.io for more resources based on today's topic, as well as access to more episodes that will help you find true marketing success. That's marketingschool.io. Until next time, class dismissed.