Kontext, a startup that helps manufacturers run real-time advertisements on AI interfaces, has raised $10 million in seed funding to scale its contextual advert platform.
The 13-person firm, based in 2023, plans to make use of the capital to develop its engineering group and broaden into image-based advertisements, founder Andrej Kiska informed ADWEEK.
Kontext works with manufacturers like Amazon, Uber, and Canva to position advertisements inside AI chatbots—together with Media Search, DeepAI, Pixel Chat, and Spicy Chat. The advertisements seem as branded hyperlinks simply beneath chatbot responses. As a substitute of static banners, every advert is generated in actual time by the identical giant language mannequin powering the dialog.
The advertisements are designed to learn as pure extensions of the dialog, drawing from the individual’s question to create bespoke copy in actual time, Kiska stated.
“Promoting is transferring to a spot the place you aren’t going to have giant advertising businesses constructing creatives, getting them accredited, and exhibiting the identical advertisements for 1,000,000 customers,” Kiska informed ADWEEK. “It’s going to be the inverse of that the place each advert is created for each person in that individual person session, tailor-made to be extremely contextual and related with out requiring any approvals.”
The $10 million funding spherical was led by M13, with participation from Torch Capital and Parable VC.
In response to a pitch deck shared solely with ADWEEK, Kontext claims its advert product helped a significant generative AI app improve common income per person from $0.24 to $0.40—a 66% raise—by including ad-supported monetization.
The corporate additionally ran a pilot with informal sport developer Nimblebit, utilizing its text-only advertisements to advertise the cellular sport Tiny Tower. The marketing campaign drove a 1.58% click-through price and a cost-per-install below $2, which outperformed a concurrent Meta marketing campaign by 24%. Kontext reported a $2.50 CPM, in comparison with Meta’s $7.35. The deck doesn’t specify the place the advertisements had been positioned.
As AI chatbots and search engines like google and yahoo more and more turn out to be the default interface for info, Kiska argues conventional advert codecs like banners gained’t translate. “No one needs to see an unpleasant, irrelevant banner caught in the course of a chat,” he stated.
Kontext isn’t the one firm making an attempt to monetize AI surfaces—opponents like ProRata and Perplexity are additionally pitching advert merchandise for its AI search interfaces.
Advertisements to offset inference price
Kontext’s core pitch is that advertisements might help subsidize the price of working AI chatbots—notably for the overwhelming majority of customers who work together with chatbots free of charge.
To assist cowl that elevated price, the corporate provides publishers a monetization layer. Kontext takes a 30% minimize of the advert income it generates. It buildings its offers round completely different efficiency fashions like CPM, CPC, or ROAS.
Try the pitch deck beneath.
