PubMatic Strikes Deal With Startup Kontext to Inject Ads Into AI Chatbots Via Programmatic Auctions

With ads coming to Gemini, clues about potential in-app ad products appearing in ChatGPT’s code, and ads already running in Anthropic’s Claude and Google’s AI Mode, it’s clear that the world’s leading AI labs are looking to brands to monetize their multibillion-dollar products. 

Supply-side platform (SSP) PubMatic wants to help brands make the most of the opportunity with a new integration that will allow advertisers to place generated text ads directly within AI chat interfaces using standard adtech tools.

The SSP has tapped Kontext, a startup founded in 2023 that helps publishers feed their content to AI systems while ensuring they get revenue and credit for that content. Kontext’s technology can create and serve custom text ads within AI chat interfaces, generated off the cuff with the help of context clues from the conversation, and informed by brand suitability and safety considerations. 

Starting today, this capability will be folded into PubMatic’s platform to help advertisers place ads in consumer AI interfaces using familiar programmatic workflows. Within PubMatic’s SSP, or the DSP of their choice, advertisers can select the chatbots they would like to appear in from a list of available partners.

For now, that list does not include any of the top AI products like ChatGPT, Gemini, Claude, or Perplexity, although a spokesperson told ADWEEK that Kontext is “growing [its] platform partnerships.” Today, options include Liner AI, Deep AI, and others.

As with standard digital ads, users will be able to apply their own specific targeting criteria, data, and measurement preferences. Advertisers can also rest assured that their messages will appear in brand-safe environments and contexts, the companies said, with guidelines informed by PubMatic’s global publisher standards and Kontext’s AI capabilities.

“Advertisers are already seeing consumer attention shift into chatbots and AI assistants, but the industry hasn’t had a real way to buy into those moments until now,” Kyle Dozeman, chief revenue officer of the Americas for PubMatic, said in a statement to ADWEEK. 

He underscored his confidence in the partnership, noting: “Kontext brings incredible innovation, and together we’re turning conversational AI from a niche channel into a high-intent, scalable media channel.”

Early tests of the integration have shown positive results. One pilot campaign recorded a 70% higher return on ad spend than the client’s target benchmark and a click-to-convert rate 50% higher than on other platforms. 

The collaboration will initially be available only to advertisers engaged in one-to-one private marketplace (PMP) deals, invite-only programmatic auctions through which a publisher offers premium inventory to a specific advertiser. However, PubMatic and Kontext plan to expand the offering to additional kinds of PMP and open exchange transactions in the future. 

The chatbot inventory will be available through PubMatic’s media buying platform Activate, as well as via any demand-side platform an advertisers so chooses.

For publishers, the arrangement could provide a way to monetize AI products without the heavy lifting required to build out new adtech infrastructure. Advertisers, meanwhile, could gain greater access to high-intent audiences in new environments. 

“People ask chatbots the kinds of questions they used to ask search engines, but with far more intent behind them,” Kontext CEO Andrej Kiska told ADWEEK in a statement. “That creates an entirely new surface for publishers and a completely different kind of opportunity for marketers. Our goal at Kontext is to make those moments both monetizable and respectful of publisher control. Partnering with PubMatic, who shares not only this goal but a dedication to innovation, gives us the scale and infrastructure to do that at speed.”

He added: “This isn’t about squeezing ads into AI conversations, it’s about designing a new advertising model that fits how people actually make decisions in an AI-driven world.”

PubMatic and Kontext are inviting select brands and ad agencies to partake in early testing of the program. 

Shares of PubMatic are down about 46% over the last 12 months, a slide that’s been attributed to a wide variety of factors including a dropoff in political ad spending after the 2024 U.S. election cycle, macroeconomic uncertainty, and reduced spend on the PubMatic platform from a specific but unnamed DSP.