From TikTok to Microsoft: How New AI and Search Features Are Disrupting the Ad Market
TikTok Launches Search Ads with Keyword Targeting
TikTok is increasingly being used as a search tool, particularly by younger audiences that have a preference to discover content through videos rather than traditional search engines. Users are turning to TikTok to look for information such as reviews, tutorials and trends. As a result, TikTok is emerging as a strong competitor in the search market, challenging established platforms like Google for certain types of questions. TikTok has very strong user engagement, with 23% of users searching within the first 30 seconds of opening the app.
TikTok has announced a new Search Ads feature that will allow advertisers to show up in TikTok search results. Brands will now be able to target users precisely with keyword ads, this new capability provides brands with more control over ad placement by ensuring their content appears for relevant search queries. Previously, ads could only be broadly aligned with user searches. This feature aims to capitalize on its growing user engagement by making ads more relevant for users.
Although results to date are promising with better click-through rates (CTR) and cost-per-click (CPC), many advertisers are cautious to shift budget from Google to TikTok search. Advertisers are looking for more concrete evidence of effectiveness. However, this offering may force brands to rethink their search budget allocation and move towards a more diversified approach, integrating TikTok search ads alongside traditional platforms. Along with this, brands will need to allocate more resources to video-based advertising to capture this growing audience.
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OpenAI Secures $6.6 Billion in Latest Funding Round
OpenAI raised $6.6 billion in a new funding round, pushing its valuation to $15.7 billion, signalling a strong shift from its initial not-for-profit mission to a more commercially driven approach.
The funding has attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI's biggest corporate backer Microsoft, and new participation from Nvidia. The closing of the funds aligns with ongoing restructuring efforts and executive changes, including the abrupt departure of long time Chief Technology Officer Mira Murati last week.
This shift could raise the likelihood of OpenAI incorporating sponsored results into its AI outputs, similar to how traditional search engines have monetised through paid advertisements. For businesses, this suggests that paid ads could become the norm within AI platforms, affecting how content is ranked and discovered.
To stay competitive, brands would need to adapt their digital advertising strategies by investing in AI platforms to ensure visibility, as organic reach could be deprioritised in favour of sponsored responses.
Monitoring these developments closely will be crucial to adapting to the evolving AI ecosystem and finding ways to leverage OpenAI’s shift towards a more commercial model.
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Microsoft Enhances Ads and Search with New AI-Powered Copilot and Bing Features
Microsoft is making significant strides in integrating AI across its products, revolutionising both its advertising model and search capabilities. By incorporating AI-powered Copilot, Microsoft is transforming how ads are triggered and displayed. Copilot utilises contextual data from user interactions to deliver more relevant and personalised ads, adjusting in real time based on the content a user engages with. This offers a more fluid advertising experience that better aligns with user needs and behaviours.
Simultaneously, Microsoft has expanded Bing's generative AI capabilities, enhancing the search experience to be more conversational and context rich. Users can now interact with Bing more naturally, receiving detailed responses that reduce the need to click through multiple links. The introduction of "deep search" allows users to delve into topics with multiple layers of information, facilitating a more comprehensive exploration of subjects.
These developments present both opportunities and challenges. The enhanced AI in Bing means that optimising content will require a more conversational approach, focusing on user intent and depth of information. Additionally, Copilot's AI-driven personalisation allows for more precise ad targeting, increasing the likelihood of engagement and conversion. Staying ahead of these changes is essential to maintain visibility and engagement with target audiences, along with remaining competitive in a rapidly evolving digital landscape.
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