PubMatic partners with Kontext for AI chatbot advertising

PubMatic announced on December 9, 2024, a partnership with Kontext that opens programmatic access to AI-powered conversational inventory for the first time. The integration establishes PubMatic as Kontext's first supply-side platform (SSP) connection, linking AI-native advertising experiences to programmatic demand channels.

According to the announcement, the partnership addresses a fundamental shift in consumer behavior. Billions of interactions now occur within generative AI-powered experiences, from chatbots and copilots to conversational search engines. This migration has created challenges for publishers seeking monetization strategies and advertisers pursuing audience engagement in these emerging environments.

Kontext operates as a monetization layer for generative AI content experiences. The platform enables publishers to expose their content to large-language-model environments and conversational interfaces while maintaining control, attribution, and revenue streams. The system focuses on structured publisher content ingestion rather than web scraping, context and intent-based ad placement inside AI-generated answers, and direct transparency reporting back to publishers.

The integration functions through curated private marketplace deals initially, with plans to expand to PubMatic's open exchange and additional PMP packages as the partnership matures. The system supports contextual and data-driven targeting through initial demand-side platform integrations and direct activation via PubMatic's Activate platform, with additional platforms scheduled for future implementation.

PubMatic's AI-first infrastructure processes trillions of auction decisions daily at near-zero latency, according to the companies. This technical capacity enables sub-millisecond decisioning speeds when combined with Kontext's AI-native ad generation framework. The technology dynamically creates and serves contextually-relevant text-based advertising messages rather than relying on static creatives, generating each advertisement on the fly to match conversational flow.

Market adoption patterns indicate growing chatbot usage

Consumer adoption of AI tools has accelerated significantly. More than one billion people now use AI tools each month worldwide, according to the partnership announcement. This usage pattern signals that AI-powered conversations have transitioned from experimental technology to mainstream interaction mode.

A 2024 global survey found that 97% of businesses plan to use AI in customer communications, with 43% specifically naming AI-driven chatbots as a top investment area for the year. Chatbots rank among the top emerging channels marketers want to explore, yet until this partnership, few advertisers had a practical programmatic path to test or purchase this inventory at scale.

The shift toward conversational interfaces represents what the companies characterize as a transformative platform transition, comparable to the migration from desktop to mobile applications and from linear television to connected TV. AI interactions differ from traditional digital advertising environments because they are personalized, contextual, and conclusive. Users ask specific questions and receive synthesized answers, requiring advertising models that match this level of intelligence and relevance.

Initial pilot campaigns have demonstrated engagement metrics and efficiency improvements. In a campaign executed with Liquid Advertising, Kontext delivered 70% higher return on advertising spend than the client's target, a 1.5x stronger click-to-convert rate compared to other platforms, and high-quality engagement driven by contextually relevant ad placements aligned to users' in-chat queries.

Across generative AI publishers, Kontext's platform has increased average revenue per user by 66% compared with control cohorts using traditional monetization methods. These results provide evidence that AI-native advertising experiences can generate meaningful economic value for publishers while delivering performance improvements for advertisers.

Technical infrastructure enables real-time ad generation

Kontext pioneered the first real-time ad generation framework for large-language-model-based interfaces. The technology analyzes each user session in real time without requiring keyword targeting, aligning advertisements with user context to display relevant products, brands, or entertainment content. The system then generates contextual, native advertisements tailored to each user session to maximize relevance and engagement.

The partnership integrates this AI-native ad generation capability with PubMatic's infrastructure, which the company describes as capable of processing high-volume auction decisions with minimal latency. This combination allows advertisers to access AI chatbot inventory through familiar programmatic workflows while applying the same data, targeting, and measurement capabilities they use across the open internet.

Enterprise-grade transparency and brand safety controls are powered by Kontext's AI technology and aligned with PubMatic's global publisher standards. The system maintains the transparency, accountability, and publisher participation standards that define programmatic advertising, extending these principles into AI-powered conversational environments.

The integration supports multiple targeting approaches. Advertisers can utilize contextual targeting based on conversation content and intent signals, as well as data-driven targeting through DSP integrations and PubMatic's Activate platform. This flexibility allows brands to test various strategies for reaching consumers in conversational moments.

Publisher monetization options expand with AI integration

For publishers and developers, the partnership provides a new path to monetize conversational AI products without building advertising technology infrastructure from scratch. Publishers gain access to PubMatic's global programmatic demand, transparency tools, and brand safety integrations through the Kontext platform.

The system addresses a key challenge facing publishers in generative AI environments: maintaining control over content attribution and revenue while exposing content to large-language-model systems. Traditional web scraping approaches have raised concerns among publishers about content usage without appropriate compensation or attribution. Kontext's structured content ingestion model offers an alternative that preserves publisher control and revenue opportunities.

The monetization framework extends beyond simple ad placement. According to the announcement, every generative AI experience, from chatbots to copilots, will eventually become a monetizable moment of engagement. This vision positions the partnership as foundational infrastructure for an emerging advertising category rather than a point solution for current chatbot applications.

Publishers using the platform can expose their content to conversational interfaces while maintaining direct transparency reporting. This visibility allows publishers to understand how their content is being used within AI-generated responses and to receive appropriate attribution and revenue for that usage.

Advertiser access structured through early testing program

For advertisers and agencies, the partnership offers early access to high-intent conversational environments at scale. The buying process utilizes familiar workflows through Activate or existing DSP partnerships, maintaining full transparency and reporting capabilities that advertisers expect from programmatic channels.

The integration enables testing of AI-native, contextually relevant creative formats that extend brand visibility into conversational engagement moments. Rather than interrupting user experiences, advertisements appear when users are actively exploring related topics, products, and decisions, potentially improving relevance and reducing friction.

PubMatic and Kontext have established an early access program for select advertisers and agencies to participate in testing AI-chatbot inventory. This controlled rollout allows the companies to refine the integration and gather performance data before broader market availability.

The partnership addresses advertising demand across multiple categories. Kontext works with publishers spanning AI search engines, entertainment applications featuring virtual AI characters, social chat platforms, customer support bots, and sales applications. This publisher diversity provides advertisers with access to varied audience segments and use cases.

Target audiences skew toward Gen Z and Millennials, according to Kontext, representing a demographic that has adopted AI tools rapidly. Users spend an average of over 30 minutes with products in the publisher portfolio, indicating sustained engagement levels that differ from traditional digital advertising environments.

Industry context reveals broader AI advertising developments

The partnership between PubMatic and Kontext arrives as major platforms explore advertising opportunities within AI-powered search and assistance features. Google has integrated advertisements into AI Overviews, its generative AI search feature, expanding these ads globally after initial testing in the United States. Microsoft has similarly introduced advertising within Copilot, its AI assistant integrated across Windows and Microsoft 365 applications.

These platform developments demonstrate industry-wide recognition that conversational AI represents a significant shift in how consumers interact with digital content. As users increasingly turn to AI-powered interfaces for information discovery, product research, and decision-making, advertising models must adapt to these new interaction patterns.

The challenge for the advertising industry involves balancing monetization objectives with user experience quality. AI-generated responses require contextual relevance and seamless integration to avoid disrupting the conversational flow that users expect from these interfaces. Traditional banner advertisements or search listings may not translate effectively to conversational environments, necessitating new creative formats and placement strategies.

Privacy considerations also shape AI advertising development. The industry continues adapting to evolving privacy regulations that affect targeting capabilities across digital channels. Contextual targeting based on conversation content and intent signals offers one approach to reaching relevant audiences without relying on third-party cookies or extensive user profiling.

Programmatic infrastructure extends to new advertising inventory

The integration represents an extension of programmatic advertising infrastructure into an emerging inventory category. Programmatic advertising has historically expanded by incorporating new formats and channels as they achieve scale, from mobile applications to connected television to digital out-of-home.

AI-powered conversational interfaces present unique technical requirements for programmatic systems. Unlike traditional display or video advertising, where creative assets are produced in advance and served when impression opportunities arise, Kontext's system generates advertisements dynamically in response to conversation context. This real-time creative generation requires infrastructure capable of analyzing conversation content, matching relevant advertisers, and producing appropriate messaging within milliseconds.

PubMatic's platform must handle these requirements while maintaining the auction mechanics, transparency reporting, and brand safety controls that advertisers and publishers expect. The company's AI-first infrastructure, built to process high volumes of auction decisions with minimal latency, provides the technical foundation for these capabilities.

The partnership also addresses measurement and attribution questions specific to conversational advertising. Traditional metrics like viewability and time-in-view may not apply directly to text-based messages within AI conversations. The integration must support new measurement frameworks that capture engagement quality and conversion outcomes in these environments.

Early access program initiates market testing phase

PubMatic and Kontext have invited select advertisers and agencies to participate in early testing of AI-chatbot inventory through an early access program. This controlled rollout allows both companies to gather performance data, refine technical integration, and develop best practices before broader market availability.

The program launches with curated private marketplace 1-to-1 deals for initial testing. This structure provides advertisers with controlled environments for experimenting with conversational advertising while giving PubMatic and Kontext visibility into performance patterns and optimization opportunities.

As the integration matures, the companies plan to expand availability to PubMatic's open exchange and additional private marketplace packages. This progression follows a common pattern in programmatic advertising, where new inventory sources often begin with curated marketplace deals before transitioning to broader exchange availability as quality and performance metrics are established.

Advertisers participating in the early access program gain first-mover advantages in understanding how conversational advertising performs relative to other channels. The pilot campaign data showing 70% higher ROAS and 1.5x stronger click-to-convert rates suggests potential efficiency gains, though results will vary based on advertiser category, creative approach, and audience targeting strategies.

The program requires advertisers to contact PubMatic directly to request access and learn how to activate campaigns. This manual onboarding process allows the companies to work closely with early participants to optimize campaign setup and measurement approaches.

Timeline

• December 9, 2024: PubMatic and Kontext announce partnership to open programmatic access to AI-powered conversational inventory
• 2024: Kontext raises $10 million seed round to develop advertising platform for generative AI applications
• 2024: Global survey finds 97% of businesses plan to use AI in customer communications, with 43% naming AI-driven chatbots as top investment area
• 2024: More than one billion people worldwide begin using AI tools each month
• 2024: Initial pilot campaigns with Liquid Advertising demonstrate 70% higher ROAS than target and 1.5x stronger click-to-convert rate
• 2024: Google expands AI Overviews ads globally after initial US testing
• 2024: Microsoft introduces advertising within Copilot AI assistant
• 2024: Google announces decision to maintain third-party cookies in Chrome, affecting privacy-focused targeting approaches

Summary

Who: PubMatic, an advertising technology platform, and Kontext, a monetization platform for generative AI content experiences, announced a partnership. The integration makes PubMatic the first SSP connection for Kontext, enabling programmatic access to AI-powered conversational advertising inventory.

What: The partnership establishes programmatic infrastructure for advertising within AI chatbots and conversational interfaces. Kontext's real-time ad generation framework dynamically creates contextually-relevant text-based advertisements that integrate into AI-generated responses. The system launches with curated private marketplace deals, with plans to expand to open exchange and additional PMP packages as the integration matures.

When: PubMatic announced the partnership on December 9, 2024. Early access testing is now available for select advertisers and agencies, with broader market availability planned as the integration develops.

Where: The partnership operates within PubMatic's programmatic advertising infrastructure, extending to Kontext's network of AI-powered publishers. These publishers include AI search engines, entertainment applications with virtual AI characters, social chat platforms, customer support bots, and sales applications. The audience skews toward Gen Z and Millennials, with users spending an average of over 30 minutes with products in the publisher portfolio.

Why: Consumer interactions are shifting toward generative AI-powered experiences, with more than one billion people now using AI tools each month worldwide. This behavioral change creates monetization challenges for publishers and new advertising opportunities for brands. The partnership addresses these developments by extending programmatic advertising standards—transparency, accountability, and publisher participation—into AI-powered conversational environments, enabling advertisers to reach consumers during high-intent moments when they are actively asking questions, comparing options, or making decisions.