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Inside Microsoft’s Copilot search ads, and what makes them 25% more effective than traditional search ads

Microsoft isn’t kidding around.

Aside from growing its ad revenues and search market shares, the company’s leaned into AI with integrating Microsoft Copilot into its search experience and advertising platform, and has now brought ads to Copilot search. In this article, delves into the brave new world of Copilot search advertising.

What are Copilot search ads?

Copilot search ads are a new placement option for Performance Max (PMax) campaigns and a new ad type, Showroom ads. They appear with a “Microsoft Advertising” and “Sponsored” label beneath the organic response.

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When do ads show in Copilot search?

According to Microsoft, ads appear in Copilot search based on the “whole conversation within a single session” versus a user’s most recent message. Similar to AI Overview ads, Copilot considers a conversation’s context and intent.

Where do ads appear in Copilot search?

Copilot search ads appear beneath the organic response in what Microsoft calls an “ad block.” Within this ad block, Copilot explains its reasoning (in what’s called ad voice) for including the advertisement.

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What types of ads qualify for Copilot search?

Copilot search supports ad formats within PMax campaigns, like search and product, as well as a new ad type, Showroom ads. With Showroom ads, users interact with an AI-powered showroom that adapts the ad experience to the user.

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The virtual showroom hints at Microsoft’s long-term vision where AI agents power search and advertising experiences, giving brands the power to communicate with users (and tailor communications) on-demand.

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How does Microsoft track Copilot search ad performance?

Advertisers can track Copilot search ad performance within Microsoft Advertising. Since Copilot search can serve Performance Max campaigns, businesses can track pay-per-click metrics like the following:

• Click-through rate (CTR)
• Conversion rate
• Cost-per-acquisition (CPA)
• Return on ad spend (ROAS)
   

How do Copilot search ads compare to AI Overview ads?

There are a few similarities (and differences) between Copilot search ads and Google’s AI Overview ads:

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Should I advertise in Copilot search?

Got Microsoft PMax campaigns? Then, you’re already advertising on Copilot search. Similar to Google’s AI Overviews, Microsoft has made Performance Max campaigns eligible for appearing in Copilot search.

What if you’re not running PMax campaigns, though? Is it worth creating them in order to appear in Copilot search results? Yes, and for a few specific reasons, including:

1. Copilot search ads are than traditional search ads
2. Performance Max campaigns have a
3. Advertisers (on average) with both PMax and search campaigns
4. said Copilot search ads had a positive impact on their experience
5. ��DZ辱���dz�’s than traditional search ads

It’s hard to ignore PMax — and Copilot search — with these numbers.
 

Will Copilot search ads have a higher ROAS?

That’s what it looks like. According to Microsoft, Copilot search ads perform 25% better than traditional search ads when considering ad relevance metrics and conversational signals.

Brands like Samsung have seen the impact of Copilot search ads through Performance Max campaigns. Besides seeing almost three times higher click-through rates, the company also grew its year-over-year revenue 143%.

With its eventual brand-based AI agents, Microsoft expects to deliver even higher returns to advertisers. That’s because these agents (see below) will provide an immersive and personalized shopping experience.

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How do I create Copilot search ads?

You can get started with Copilot search ads by creating a Performance Max campaign. While launched, Showroom ads are only available to select advertisers who are piloting this new ad format.

How to optimize your ads for Copilot search

Get better results from Copilot search ads with these PMax optimizations:

• Ensure campaigns have unique goals, like “Request Installation Estimate” and “Request Emergency Service.”
• Create multiple asset groups based on audience, promotion, and market.
• Generate search themes using the words or phrases someone might use.
• Include audience signals, like through remarketing lists, customer match lists, and more.
• Choose the most relevant bid strategy, like Max Conversions, Max Clicks, or Max Conversion Value.
• Set realistic targets, like for Target Cost per Acquisition and Target Return on Ad Spend.
• Re-evaluate campaign and account budgets if regularly using up your daily and/or monthly budget.

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