Microsoft Advertising Accelerate 2025: Event Recap
A quick recap of Microsoft’s latest AI ad products and what they mean for brands
The advertising industry is experiencing a fundamental transformation, driven by generative AI’s ability to drive conversational and deeply personalized consumer interactions. At Microsoft Accelerate 2025, the company unveiled a series of AI-powered ad products, as detailed in this company blog post, that integrate across its search, shopping, gaming, and content experiences, allowing brands to engage customers in more intuitive and immersive ways.
Microsoft’s bold move into AI-powered advertising comes as the digital marketing landscape undergoes a major shift. As consumer-facing AI reshapes how people engage with media and interact with brands, so does the way that brands reach and connect with their audiences.
This evolution represents a significant shift in digital marketing. Traditionally, consumers navigate between search engines, social platforms, and ecommerce sites to research and purchase products. Now, Generative AI is breaking down these silos, allowing users to move seamlessly from search to shopping, from discovery to decision-making — all within a conversational AI interface. Soon, if agentic AI becomes good enough to automate tasks and fully take over, users might not even need to be actively interfacing with the AI tool. When that happens, how can a brand reach its target audience?
Showroom Ads and Brand Agents
Microsoft started experimenting with how ads can show up in an AI-driven environment with ads in Bing Generative Search via its Copilot chatbot. Currently, Copilot ads are live in English, French, and German, with Spanish and Japanese set to launch this month.
Expanding on this concept, Microsoft introduced a new shopping ad format built upon Copilot’s generative capabilities. The new Showroom Ads, an interactive ad experience launching in April with select clients, are designed to replicate the in-store shopping experience in a digital setting. When users show purchase intent while interacting with Copilot, they may enter a Showroom ad experience, generated by AI in real-time, featuring rich sponsored content from brands to provide product comparisons, insights, and user reviews.
Microsoft shared that they see a 53% increase in purchase rates after users engage with Copilot; for shopping-intent interactions, this figure soared to 294%.
The level of interactivity and personalization is further enhanced by new Dynamic Filters, which use AI to offer real-time filtering options that help users quickly pinpoint their desired products or services, thus reducing friction and boosting conversion rates.
Of course, what would be a showroom without sales staff? Microsoft also teased Brand Agents, which will be integrated into Showroom Ads down the road, like apps on a smartphone, allowing users to interact directly with virtual representatives for a more immersive experience. These AI-powered agents will provide expert knowledge, mimicking in-person interactions and enhancing digital engagement. Interested brands can sign up here to join the Brand Agent pilot program.
The introduction of Brand Agents marks a fundamental shift in digital engagement, allowing brands to establish AI-powered two-way conversations with customers. Natural language interactions will streamline communication between consumers, brands, and ad platforms while maintaining privacy compliance. Brands will soon deploy their own AI agents, capable of assisting users in making purchasing decisions, much like traditional sales reps and travel agents once did.
The Expanding Role of AI across Microsoft Ecosystem
Beyond search and shopping, Microsoft is also integrating AI-driven ads into content, gaming, and audio experiences. Between its productivity suite and Xbox, the company has a wide range of digital touchpoints to engage consumers in various contexts across work and play.
Another cool announcement at Accelerate 2025 was AI-generated audio ads within Copilot Daily on MSN. Launched in October 2024, Copilot Daily is similar to Google’s Daily Listen feature, which uses NotebookML’s text-to-speech model to generate podcast-style daily news recap based on your search history and news preferences. These personalized, podcast-style audio ads are dynamically generated based on user preferences and browsing behavior. Instead of generic, pre-recorded messages, AI creates customized, conversational ad content, offering a storytelling approach to advertising.
Surprisingly, MSN still commands over 550 million monthly active users (and 100 million daily active users) worldwide, partly thanks to it being the default home page in the default Edge browser on Windows PC. Microsoft didn’t share how many people are listening to Copilot Daily via MSN, but even if 10% of those 100 million daily active users are tuning in, that’d be a substantial audience for Microsoft to test its AI-generated audio ads.
Microsoft is also enhancing short-form video advertising, ensuring that video ads blend seamlessly into AI-powered content recommendations. Unlike disruptive pre-roll ads, these AI-powered placements appear organically within MSN and Edge, increasing engagement while maintaining user experience.
Gaming remains a key pillar of Microsoft’s ecosystem, with over 500 million monthly active users across its gaming properties (such as Minecraft) and services. Excitingly, Microsoft said it is looking to expand its gaming ads, enabling brands to reach highly engaged audiences across Xbox console, PC, and mobile. Advertisers can now run App campaigns on major gaming properties like King (Candy Crush) and Microsoft Casual Games across Android, iOS, and Windows. Additionally, ads will appear in high-value placements like the Windows Start menu and Microsoft Store, reaching over 1 billion users. The App campaigns pilot is currently limited to select clients, with broader availability expected soon.
To bring together all these AI ad units, Microsoft introduced Ads Studio in the Microsoft Advertising Platform to help advertisers easily find, create, manage, and optimize creative assets, even with the increase in asset variety made possible by generative AI, with integrated performance insights to boost results.
What This Means for Marketers
Microsoft’s Accelerate 2025 event offered a glimpse into a future where advertising is fully embedded into AI-driven digital experiences. Microsoft’s spread of AI ads across search, shopping, content, gaming, and productivity tools via Copilot underscores the growing influence of generative AI in the digital ad space.
The rise of Brand Agents and AI-powered search ads means that consumers will no longer need to click through multiple websites to find what they need. Instead, they can engage in real-time conversations with AI-driven brand representatives, receiving tailored product recommendations and contextual insights.
This behavioral shift is likely to reshape search marketing, requiring brands to forget old SEO rules and start to optimize their presence within AI-powered chat environments. Instead of optimizing for static keyword queries, brands must optimize for AI-driven conversations. Content must be structured in a way that AI copilots can surface it naturally, whether through dynamic filters, interactive shopping ads, or brand agents.
The upcoming Brand Agents could further move the needle towards AI-powered customer engagement. Brands will need to invest in developing their own AI representatives, trained on proprietary knowledge and customer insights, to provide personalized, real-time support. The brands that successfully deploy AI-powered agents will gain an advantage in customer retention and sales conversion.
While AI is reshaping how consumers discover and interact with products, strong branding will be essential to maintaining trust and differentiation in an increasingly AI-mediated landscape. As one Microsoft executive stated, “brands matter more than ever in the generative space because brands are a shortcut to our values.” As AI-driven experiences blur the lines between organic and sponsored content, marketers who invest in building brand equity through consistent messaging and values will be better positioned to thrive in this evolving digital ecosystem.
The bottom line is, marketers should be proactive in testing and adapting to AI-driven ad formats. Whether it’s leveraging interactive Showroom Ads, training AI-powered Brand Agents, or experimenting with AI-generated audio ads or gaming ads, staying ahead in this new AI-first advertising era will require both agility and innovation.
