Microsoft released several updates on Copilot and ads in October this year.
Following that, at the recent Microsoft Advertising Partner Pulse meeting*, Microsoft dove deeper into the updates, including results of research, enhanced Copilot ad integration, and optimization best practices for Performance Max campaigns, among others.
These updates mark more steps forward in Microsoft’s effort to refine the AI search experience and integrate the ad platform into conversational search.
They provide businesses with a way to stay ahead in AI technology advancements while effectively managing their Microsoft Ads.
Consumer Perception Of AI Search Results
The updated Microsoft Copilot clearly separates organic content from sponsored ads.
Ads are now integrated into entire conversations during a session, rather than just appearing after the last prompt, aligning with their simplified design.
As Copilot enters its first year, Microsoft has taken a closer look at consumer perceptions of AI-driven conversational search, often referred to as “chat.”
Its latest study reveals a growing trust in chat platforms for search, offering insights into how this technology reshapes user behavior and expectations.
The research focused on U.S. consumers who have experience with a conversational search platform. It found that users view chat as both complementary and, in some cases, superior to traditional search.
Users particularly value the speed and relevance of chat results, finding the results easier to understand compared to sifting through traditional search results.
Key findings:
Trust in Generative AI: 38% of U.S. consumers report being “very trusting” of results from generative AI, while 50% of current Copilot users describe their trust level as “very trusting” or “completely trusting.”
High Engagement Levels: Among Copilot users, 50% engage with the platform multiple times per week, and 16% use it daily. This indicates that many users have moved beyond experimentation and integrated Copilot into their daily routines.
Accuracy Levels: 77% of users believe that chat and traditional search are equally accurate, with 38% finding chat results more precise for their needs.
Microsoft believes this shift marks a fundamental change in how people interact with search technology.
As traditional keyword-based search gives way to conversational queries, users like the more detailed and relevant results.
Consumer Perception Of Ads In Chats
Consumers are becoming more comfortable seeing ads in their chat experiences because the ads feel relevant and personalized.
According to Microsoft, the data shows:
Ad Recall: 38% of users recall seeing ads during their chat sessions.
Positive Sentiment: Of those who remember seeing ads, 75% reported that the ads had no negative impact on their experience. In fact, 42% noted that the ads improved their experience, enhancing their journey by providing useful and relevant information.
Why This Works
The success of ads in chats lies in their alignment with user intent. Chat users perceive these ads as being relevant to their searches.
This hyper-relevant targeting allows ads to blend seamlessly into the chat experience, earning trust and confidence in the results.
The Opportunity For Advertisers
As chat usage grows, so do the opportunities for brands to connect with consumers.
The research shows that a third of chat users already use these platforms to research products or brands they want to purchase. They also use chat beyond just researching products and brands.
Consumers are turning to chat platforms for a variety of tasks, including:
Finding recipes and meal ideas.
Planning trips and finding travel deals (17%).
Searching for gift ideas (19%).
Learning about health conditions.
The variety of use cases presents new opportunities for advertisers to connect with consumers at different stages of their decision-making journeys.
Because the ads are served based on sessions rather than individual queries, they can be more timely and relevant.
PMax Is The Best Performing Ad Format In Copilot
Looking at ad opportunities in Copilot, Microsoft’s data shows that Performance Max (PMax) is the top-performing format.
Ads within Copilot outperform traditional search ads in click-through rates (CTR).
Another critical metric is the rate of “quick click backs,” where users click an ad but quickly return because the landing page content didn’t meet their needs.