Meta quietly confirmed about three weeks ago that conversations with its AI chatbots could be used to train its ad systems. The move marks a critical shift: advertising will no longer be guided by clicks, but by users’ conversations with chatbots.
The news has ignited ethical, economic, and existential questions across the marketing ecosystem. What happens when a brand doesn’t just know your interests, but your fears, intentions, and dreams? And what does that mean for digital ad giants like Amazon, Disney+ Hotstar, and JioCinema, whose empires are built on traditional targeting?
Notably, the privacy laws in the EU, the UK and South Korea avert this type of data collection, and the policy will not be applicable to these regions.
Divye Agarwal, co-founder of BingeLabs, sees Meta’s move as a pivotal turning point in how platforms view human data—not as demographics, but as inner emotion.
Agarwal said that people open up in ways they never do on social media when they talk to an AI; they share their plans, confusions, fears and dreams. “That is not just data. That is human intent at its purest form.”
The Fallout for Agencies
Traditional agencies, built on media buying, demographic buckets, and campaign storytelling, are staring down irrelevance. If AI can generate creatives, optimise budgets, and target emotions in real time, who needs an agency?
“[This] means chats from millions of users on Meta AI are analysed and segmented as per the users’ interest, behaviour or context, which is then used to serve personalised ads,” Deepak Puttaramaiah, media director at AutumnGrey, told AIM.
Until now, agencies had an edge: translation. They turned brand messages into campaigns people might relate to. But Meta’s new model goes beyond, offering predictive empathy. Ads could be inserted at the exact moment a user expresses vulnerability, or intent in a private AI chat.
A data scientist from Google told AIM that Meta’s move is not surprising, and it’s likely that competitors will soon catch up. Key factors driving this advancement include the high costs associated with training and deploying chatbots, which make in-chat ads a scalable monetisation strategy, he said.
Additionally, as online banner ads evolve, the increased sharing of personal data during chatbot interactions makes this shift not only logical but inevitable, according to the source, who requested anonymity.
Agarwal warned that one’s thoughts are no longer private if their AI chats are reused for advertising. “The system can start to understand your mood, predict your decisions, and sell to you when you are most vulnerable.”
Will Ad Giants Bleed?
Meta’s move threatens to upend the digital ad hierarchy. Today, platforms like Amazon Ads, JioCinema and Disney+ Hotstar rely on visible behaviour, searches, watch history, and cart activity.
Citing his own experience from social media platforms, Puttaramaiah said Meta may be analysing his chats to display ads promoting digital tools. These ads are relevant to him since he seeks to discover new digital tools, benefiting both the advertiser and the user, in his case.
In terms of the effect on ad revenue, the source said it is still early to make that bet.
As this is a new ad platform, there will be incremental value for Facebook and other similar companies, the source said, adding, “but for a company like Google, chatbots are taking clicks away from Google search queries: reduced clicks to websites and ads shown on those sites, hence the incremental value will not be significant.”
He added that the future remains uncertain as Google promised to make websites indexable and drive traffic, but with chatbots emerging, they may undermine those sites, and the consequences are unclear.
Agarwal put it plainly: “Instead of targeting users based on age or interests, brands will be targeting mindsets in real time. For platforms, it is an enormous opportunity.”
If Meta holds data, Amazon and video-streaming platforms may risk becoming blind media walls, with high reach and low insight. Their ad revenue models, built on scale, could see erosion unless they introduce their own conversational AI layers.
Puttaramaiah believes that Meta will get better at enhancing relevance for both users and advertisers without hampering the user experience.
“If this starts helping advertisers achieve their business goals better than before, they may consider re-strategising the platform mix and budget distribution,” he said, adding that this could also imply competitors may lose a part of their share to Meta.
Who Will Use It?
Here’s the anomaly: while Meta plans to arm brands with unprecedented power, not every brand will be able to use it responsibly. The ones who will thrive fall into three categories.
One, digital brands in e-commerce, fintech, and wellness are increasingly using AI psychographic targeting to optimise conversions, treating every consumer mood as a sales opportunity.
Second, direct-to-consumer (D2C) brands, with limited budgets, leverage AI for content creation and targeted advertising, bypassing traditional agencies.
And lastly, the brands that will not use it, such as heritage brands, luxury labels, and anyone terrified of a PR disaster. Emotional advertising is a reputational minefield.
Trust vs Targeting
Meta may win the technology race, but it risks losing trust. Agarwal warned that users didn’t consent to conversations becoming ad triggers. Moving forward requires separating conversational data from marketing data. Once trust is lost, no technology can restore it, he noted.
In a world where ads become almost psychic, the most radical differentiator will not be precision, but principle. AI is about to mechanise persuasion, which is why authenticity is becoming the final competitive edge. Agarwal said that as AI makes advertising more personal, it will also make honesty more valuable. “The brands that respect that will win.”
Because in the end, the greatest brand campaign is not the one that predicts a purchase, but one that earns permission.
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