Blog post
Transforming the future of audience engagement
Today at Microsoft Advertising Accelerate, our flagship event for advertisers, we are announcing several product releases that will help us in the journey of transforming audience engagement. This blog post is longer than usual, and that’s because we have a lot to share, with meaningful announcements. Let’s start with our vision.
The future of customer experiences is conversational.
Today, most people navigate between multiple web pages or apps to do what they want, from playing games, connecting with friends and colleagues, shopping for a new coat, to discovering their next vacation spot. Historically, these digital experiences have been siloed into search bars, social apps, and streaming, to name a few.
Generative AI changes all of that, with conversational interfaces like chatbots and, increasingly, agents enabling a less fragmented discovery and productivity experience. People can now jump from searching to shopping to entertainment at the speed of a few prompts.
This shift opens new possibilities for advertising. The use of natural language can unlock easier exchanges between consumers, brands, publishers and ad platforms, underpinned by secure and privacy-compliant methods. We anticipate that brands will soon have their own AI agents, which are essentially software programs that can quickly perform tasks and make decisions.
For example, in the same way that a travel agent could historically help you find the perfect vacation, a software agent can help you find what you’re seeking to consume or purchase, moving us into the era where brand agents can have conversations with people and even with other companies and their agents.
Thanks to the rapid advancements in technology and falling costs of generative AI, these agents can enable a variety of scenarios. Possibilities include tasks like enhancing customer engagement, supporting lead generation, offering timely and accurate product information, and in the future even offering promotions.
We are committed to helping brands create agents and making it easy to connect them to our audiences. As the first step in this journey, we are launching a pilot product that enables brands to create smart, AI-based agents on their websites.
Imagine if a website could talk? People wouldn’t need to scroll and click through links; they could simply ask what they want to know and have customized information delivered to them. For brands, this can boost engagement and conversion rates as a helpful agent guides their customers through the last mile of the shopping experience. Starting this month, we are inviting select clients to participate in this early stage pilot.
In the future, we envision these intelligent agents will be able to interact with each other, and Microsoft Copilot could invoke specific agents based on the needs of each user. And in the meantime, we are building ad products, productivity capabilities, and creative innovations that help marketers prepare for that future state while also pragmatically driving their current businesses. We have much to share that I’m incredibly proud of and excited about – keep reading to learn more!
The road to get there: Advertising innovation with real business outcomes
Generative AI and other product innovations are paving the way forward. And one of our guiding principles is that every innovation we bring to market empowers advertisers to achieve their business outcomes, driving better relevance, reach, and results.
Relevance: Deepening customer connections
Consumers today are seeking highly curated, hyper-personalized experiences. Advancements in generative AI are elevating our ability to deliver relevant content and messages in ways that were not previously possible. Back in October, we completely redesigned Copilot’s user experience to deliver against this promise, including a more user-centric approach to ads. With this differentiated approach, we’ve adopted new core principles for advertising in Copilot, ensuring that organic responses are never influenced by sponsored content, which is distinctly marked and only appears when highly relevant and from trusted sources.
We are happy to share that ads in Copilot have now fully ramped in all English, French, and German speaking markets, with Spanish and Japanese coming this month and other languages to follow. The early results are promising. By taking into account the richer signals of entire conversations, ad relevance metrics in Copilot are 25% better than what we see in traditional search.1
Now, we are excited to announce the first ad formats entirely designed with Copilot in mind. These ads are interactive by nature, adapting to each user input:
- Microsoft Advertising Showroom ads: A big reason that people visit product showrooms and go to brick-and-mortar stores is to be able to ask questions and understand the ins and outs of products. We are recreating this experience with Microsoft Advertising Showroom ads, a rich and immersive experience where users can explore what they are searching for in the digital space, much like a physical showroom. For example, if a user starts asking questions to Copilot about a particular product and expresses purchase intent, they may be invited to enter a Showroom ads experience. Here, rich sponsored content complements the organic experience, helping to showcase the product benefits as people ask Copilot more questions. This immersive environment allows users to interact with products in a way that closely mirrors the experience of visiting a physical showroom. In the future, the experience will be even richer, as brand agents will be integrated into the Showroom ads allowing people to engage directly with a virtual brand representative. These brand agents will provide all the expertise and knowledge someone would expect from an in-person interaction, further enhancing the immersive digital experience. We are starting to pilot Showroom ads in April with select clients and are excited to see how this innovative experience will transform the way users interact with products online.
- Dynamic filters: At times, people may see ads for a product they’re looking for, but they want to refine their search. We are leveraging the interactive nature of Copilot to introduce Dynamic filters. This feature removes the friction of typing additional questions and quickly narrows down options that are more likely to drive conversions based on an individual’s preferences. Dynamic filters will begin piloting in English language markets this March.
Technology is also shaping how we deepen customer connections and add relevance across well-established digital channels. We have made important technical progress in key areas:
- Dynamic ad generation: We started using query signals to dynamically create ads in Dynamic Search ads (DSA). The results are positive, improving DSA click-through rates by 20%.1 Now, we are working to apply additional signals to personalize ads, such as location and seasonal events. We will be extending this to copy generation and image selection for each user's context. And we are bringing this to new campaign types such as Performance Max.
Reach: Showing your brand to more people in powerful, new environments
Following up on our commitment to help you reach more people across the Microsoft Advertising Network, we continue to grow our Microsoft Edge user base, surpassing 30% market share in the US on Windows, gaining share for 15 consecutive quarters.2 Besides reaching a growing audience, we heard your feedback that we need to make it easier to activate on Microsoft’s unique properties. Today, we are thrilled to announce:
- Microsoft Advertising brings the power of gaming and Windows to your campaigns: Microsoft Advertising empowers better connections between advertisers and a highly engaged gaming audience across the most important playing surfaces: console, PC, and mobile. Today, we are continuing our momentum in gaming by announcing App campaigns across some of our most coveted properties. Brands can now leverage the powerful reach of King and Microsoft Casual Games via the Microsoft Advertising Platform. Brands can also promote apps on games like Candy Crush across Android, iOS, and Windows. Furthermore, we are bringing App campaigns to one of our most valuable placements: the Windows start menu, used by more than 1 billion people worldwide, and the Microsoft Store. The App campaigns pilot has just started with select clients, and we expect to open it to new clients soon.
Microsoft Advertising showcasing ad placements across Console, Mobile, and PC platforms, highlighting a seamless multi-device advertising experience.
Results: Driving conversions and achieving outcomes more easily
One of the biggest impacts that generative AI is having on the advertising industry is improving productivity and enabling greater ROI. Today, Copilot in the Microsoft Advertising Platform is already helping advertisers of all sizes save time, increase agility, and uncover valuable performance insights.
"Copilot is my partner in optimization. It provides diagnostics on campaign limitations, ad serving issues, or even billing flags, and returns a full readout in seconds."
— John Fraze, SVP, Paid Search, Carat
"Copilot's diagnostic capabilities enable me to assess potential campaign performance roadblocks much like a manual evaluation. It provides me with insights from a high-level overview, down to the most granular details that may be causing performance issues, ensuring no stone is left un-turned."
— Dana Godwin, Manager of Enterprise Search Strategy, Logical Position
In addition to direct feedback from clients, a recent study by Accenture (Accenture Self-Service Ad Platform Analysis, 2025) explored the current capabilities on self-serving ad platforms in generative AI. Although this emerging category is still in its early stages, Microsoft Advertising was identified as a leader in this space. The practical tools we have provided to date, such as Copilot in the Microsoft Advertising Platform, are helping to unlock new opportunities and value for advertisers today.
As we continue forward in 2025, we expect more and faster proof points that generative AI is moving from promise to practice. And, as such, we are pleased to announce progress in creation tools that leverage performance data to suggest higher-performing ads:
- Ads Studio: Designed to create better-performing ads with ease, Ads Studio is an AI-powered creative tool built for performance marketers. With the increase in asset variety made possible by generative AI, Ads Studio helps to easily find, create, manage, and optimize creative assets with insights to boost advertising results. We are first launching Ads Studio in the Microsoft Advertising Platform, and it will also be integrated as a shared component across our platforms like our Microsoft Invest DSP over the next quarters.
- Copilot asset creation via API: Copilot asset creation is now available on our Campaign Management API, enabling advertisers to leverage Copilot’s asset generation capabilities across their preferred tools and workflows, including on the Microsoft Advertising Platform, Microsoft Advertising Editor and via API.
"Unlike generating ads one by one in the UI, the API provides enterprise level flexibility, allowing us to scale efficiency while maintaining the quality standards our clients expect.”
— Stan Shyshkin, VP, Paid Search, dentsu Media
- Enhancing productivity in Microsoft Monetize: With a goal to make it easier to do business with Microsoft Advertising across every platform, we are also advancing the Microsoft Monetize experience. We are making it cleaner and more accessible, increasing quality controls, and streamlining tasks and surfacing insights.
- New Homepage and Navigation: A new home page serves as a centralized hub for all your monetization needs. Powerful tools like Monetize Insights have been integrated to help you uncover revenue and boost yield. Performance issues are flagged proactively and point you towards a resolution. And common workflows are fast-tracked to help expedite your day.
- Copilot in Monetize: Copilot will be by your side as you navigate your path to successful monetization. The same conversational chat leading the productivity revolution is here to help streamline troubleshooting, answer questions, and provide best practices.
We will continue to push the boundaries of Copilot in our advertising platforms, adding more sophisticated insights and performance-driven asset generation, the same diagnostics capabilities we announced in the Microsoft Advertising Platform in October, as well as access to video creation embedded in our ad platforms the coming months.
Building the future together
The innovations we’ve announced today were prioritized and enabled by invaluable feedback from our clients and partners and we look forward to hearing more from you along this journey. We are co-creating the future with you.
Not sure where to get started? We've got you covered. We just released a new generative AI readiness guide called 'The Marketer's Guide to Chatbots and Agents: From Generative AI to ROI.' Download it today to stay ahead of the curve.
[1] Microsoft internal data
[2] Microsoft Fiscal Year 2025 Second Quarter Earnings Conference Call. January 29, 2025. Retrieved from https://www.microsoft.com/en-us/investor/events/fy-2025/earnings-fy-2025-q2
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