Here’s what the AI ad landscape will look like next year

Paul Longo, who heads up AI in ads at Microsoft, said this about ads on Copilot on a recent AdExchanger podcast:

"You don't want a trusted companion to be blurting out ads to you when they're not super relevant. So we've come up with a set of principles there around, hey, advertising needs to be only served in highly relevant commercial conversations. What it is, it needs to be very distinct and clearly labeled. And, yeah, and sponsored ads will never influence organic results."

I spent 17 years tracking social media advertising's evolution, where marketers started off by building an organic presence on platforms, and then paid advertising took hold. Here's what I think the AI ad landscape will actually look like next year:

• Expect ads to expand beyond commercial conversations across Copilot, Perplexity and other AI platforms. The "relevancy" barrier will gradually dissolve.

• "Distinct" labeling will fade. AI platforms will follow Facebook's playbook - blending sponsored content seamlessly with organic responses to maximize engagement and revenue.

• Sponsored content will shape organic results through the broader AI search economy. Brands are already deploying AI content strategies through agencies and startups, creating de facto sponsored content without explicit labels.

I think we’re in for a lot of change — and it’ll happen sooner than you think. The time to start getting your learnings in is now.