PubMatic and Kontext Bring Programmatic Ads to AI Chatbots

What it is

PubMatic has struck a deal with AI startup Kontext to inject programmatic ads directly into AI chatbot conversations. It’s Kontext’s first integration with a major supply-side platform (SSP) and it effectively turns conversational AI into a new category of ad inventory. Advertisers can bid in real time on placements inside chat interfaces much like they would on web or mobile, meaning programmatic has now “entered the chat”.

That matters because conversational interfaces are quickly becoming a mainstream way people search, compare and decide. If users increasingly ask an AI assistant rather than browse ten links, the advertising industry will follow that attention. The PubMatic–Kontext partnership is an early indicator of what that looks like in practice: a scalable, programmatic route into dialogue-based environments, rather than a one-off sponsorship model or a bespoke direct deal.

Why it matters

A new frontier for brands. The first wave of “AI conversation ads” signals a shift in where brands can appear. The chat window becomes a decision surface: users reveal intent in natural language, and advertisers can respond with contextually relevant messages.

From niche to media-plan line item. Today this is still early-stage, but the infrastructure is familiar: auctions, DSP access, and the operational muscle memory of programmatic. If adoption grows, conversational placements may become a standard consideration alongside native and search-like formats.

Creative reinvention. Brands will need creative that works in dialogue, not just display. The winning unit is less “banner” and more “helpful suggestion”: short, specific and aligned to the question being asked.

How ads work inside chatbot conversations

Unlike standard display ads that sit in fixed slots, chatbot ads are woven into the conversation flow. Kontext analyses the user’s prompt and surrounding dialogue in real time to generate a contextually relevant ad message. The ad typically appears as a sponsored suggestion or branded link directly beneath (or alongside) the chatbot’s answer.

The key difference is that these aren’t pre-made banners shoved into a text-heavy environment. They are text-first and dynamically assembled to match the user’s intent. If someone asks about mortgage rates, they might see a clearly labelled sponsored line such as: “Sponsored: Compare mortgage offers from Bank X”, presented as a natural extension of the answer rather than an interruption.

Because the ad is generated within the conversational UX, it stays subtle and context-friendly. That’s important: chat interfaces have a very low tolerance for “display-style” disruption. The model is closer to search and native than traditional banners, advertising that feels like a relevant next step, delivered at the moment of intent.

Importantly, publishers stay in control

One of the most meaningful strategic dimensions here is publisher control. Kontext’s platform is designed around opt-in integrations where publishers decide how their content is used and how the chat experience is monetised. That’s a notable contrast to the last couple of years, where publishers have felt their content was being scraped, summarised, and value-extracted by AI systems with limited attribution or compensation.

In practical terms, if a publisher has (or builds) an on-site chatbot, whether for content discovery, Q&A, or audience support, this model gives them a way to monetise that interaction directly, with transparency on what ran and where. So it is not just a new ad format; it’s a potential counter-move against platform intermediation.

Early adopters and current scale

Right now, chatbot ad inventory is still emerging. Early supply tends to come from AI-native apps and specialist platforms experimenting with chat interactions, rather than the biggest mainstream publishers at scale. Kontext has pointed to initial partners in the generative AI app ecosystem and early advertiser tests involving major brands.

So really this is available but niche. You’re unlikely to deploy enormous budgets purely into chatbot placements today because the supply footprint is still developing. But the direction will be more publishers and platforms rolling out chat experiences and then the available inventory expands and programmatic makes that expansion easier to access.

Buying, targeting and what planners should watch

From a buying standpoint, the appeal is that the mechanics look like programmatic as usual: DSPs can bid in real time, with chatbot inventory described in bid requests and auctioned accordingly. Where it gets interesting is targeting. Chat prompts are high-intent signals, often clearer than cookie-based segments: the user is literally telling you what they want, in their own words.

For planners and creative teams, the near-term opportunity is learning: test budgets, measure engagement, and start building “chat-native” messaging approaches. The medium rewards relevance, usefulness and restraint. Done well, conversational ads could become one of the most intent-rich environments programmatic has ever had and one where publishers, not platforms, have a credible path to keep value inside their own ecosystem.