Even before they launch their ChatGPT powered Bing’s complete, public version, Microsoft has already started making plans on how to monetise the service and serve ads in AI searches.

Microsoft has begun discussions with ad agencies about how it intends to monetize its updated Bing search engine driven by generative artificial intelligence, as the tech giant aims to challenge Google’s supremacy.

According to an ad executive who talked about the private meeting on the condition of anonymity, Microsoft showed off a demo of the new Bing and indicated it planned to enable sponsored links within answers to search results in a meeting with a big ad agency this week.

The world has recently been charmed by generative AI, which can make creative replies in a human voice in response to open-ended queries or requests. Microsoft and Alphabet’s Google also revealed new generative AI chatbots on the same day last week. These bots, which have not yet been extensively distributed to consumers, will be able to synthesis content from the web for sophisticated search queries.

Early search results and interactions with Microsoft’s Bing and Google’s chatbot named Bard have revealed that they may be unexpected. Google lost $100 billion in market value on the day it published a promotional film for Bard in which the chatbot shared incorrect information.

According to the ad executive, the company is taking standard search advertisements, in which advertisers pay to have their websites or goods show on search results for terms related to their business, and integrating them into replies created by the Bing chatbot.

Microsoft is also developing a new ad structure for the chatbot that will target marketers in certain sectors. According to the ad executive, when a user queries the new AI-powered Bing “what are the greatest hotels in Mexico?” hotel adverts may appear.

Ads integrated inside the Bing chatbot, which can be enlarged to occupy the top of the search page, might help prevent advertisements from being moved lower down the page below the chatbot.

According to a letter to clients, Omnicom, a big ad company that works with companies such as AT&T and Unilever, has informed clients that search advertisements may earn lesser income in the short term if chatbots take up the top of search sites without featuring any adverts.

“They are focused on starting off with sponsored advertisements integrated right away,” Cohen said, adding that Microsoft suggested further details about the approach will be available in early March.

When asked about the Parts Geek commercials, Microsoft stated that the potential of the new AI technology in advertising is still being explored and that it intends to collaborate with its partners and the ad business.

Despite the early testing, Microsoft has not set a date for when businesses would be able to purchase advertising directly through the chatbot, according to Cohen and the ad executive.

Conversational AI is expected to become the primary method users search the internet in the long run, according to Omnicom’s letter to customers.

“It is hardly an exaggeration to suggest that Microsoft and Google’s statements herald the most significant shift in search in 20 years,” Omnicom added.