“AI to Handle Ads, Too”... Naver and Kakao Step Up AI Ad Monetization

[Financial News] Naver and Kakao Corp. are stepping up efforts to boost the profitability of their advertising businesses, putting artificial intelligence (AI) at the forefront. Naver is focusing on automating the creation and management of search ads using AI, while Kakao Corp. is focused on breaking into the market for tailored ads that identify users’ purchase intent. The companies aim to sustain growth in advertising, a key source of revenue, by expanding ad campaigns among existing advertisers and generating new demand for ads.
According to industry sources on the 8th, Naver will pilot an AI-powered “copy generation” feature on its search advertising service Powerlink from the 12th through the 19th. The feature uses AI to analyze ad materials submitted by advertisers and the webpages linked to them, then automatically generates copy that matches users’ search intent. Naver previewed the feature in August under the name “AI Summary Text,” but after delaying its rollout, it has now changed the name and finalized the testing schedule.
Unlike the existing approach, in which advertisers write copy themselves to highlight the features of a product or service, this feature uses AI to analyze search terms and ad content and generate suitable copy. The generated copy will not replace existing ads; it will appear alongside them in titles, promotional text, or separate sections. This allows users to receive the most relevant ad information without advertisers having to revise copy individually. The billing model will remain the same as for existing ads, but clicks on AI-generated copy will also incur charges.
Naver plans to display AI-generated copy alongside existing ad titles and promotional text to strengthen the relevance between search terms and ad content. One advantage for advertisers is that they can address a range of search needs without writing copy themselves. However, they will not be able to edit AI-generated copy directly, though they can opt out of using the feature. Naver has recently stepped up efforts to enhance its AI-based advertising agent capabilities, including revamping its existing Advertiser Center as “Naver Ads.”
Kakao Corp. has focused on using AI to identify purchase demand within KakaoTalk, which previously had no search ads. It is developing a new ad model in which AI identifies purchase intent from conversations and recommends products or services, even when users do not search directly. For example, if a user discusses travel plans with AI, it could recommend related accommodation or booking services. The aim is to secure opportunities to show ads, as with search advertising, to users with clear purchase intent. To that end, Kakao Corp. plans to build a “common memory infrastructure” by the first quarter of next year, enabling AI to use users’ behavior, preferences, and experiences.
A closed beta test of “AI Crew,” an AI agent for advertisers, will also begin this December. When an advertiser enters a business goal, AI will suggest suitable advertising products and management strategies, and provide support from ad setup through performance analysis. The strategy is intended to lower the barriers to entry for small and midsize advertisers and expand ad campaigns by existing advertisers.
An industry official said, “The key is whether more efficient ad creation and management through AI actually leads to more advertisers coming on board and increased ad spending, and whether personalized recommendations to users translate into purchases.”
[email protected] Jang Min-kwon Reporter