Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
Kontext, a startup that helps brands run real-time ads on AI interfaces, has raised $10 million in seed funding to scale its contextual ad platform.
The 13-person company, founded in 2023, plans to use the capital to grow its engineering team and expand into image-based ads, founder Andrej Kiska told ADWEEK.
Kontext works with brands like Amazon, Uber, and Canva to place ads inside AI chatbots—including Media Search, DeepAI, Pixel Chat, and Spicy Chat. The ads appear as branded links just beneath chatbot responses. Instead of static banners, each ad is generated in real time by the same large language model powering the conversation. 
The ads are designed to read as natural extensions of the conversation, drawing from the person’s query to create bespoke copy in real time, Kiska said. 
“Advertising is moving to a place where you are not going to have large marketing agencies building creatives, getting them approved, and showing the same ads for a million users,” Kiska told ADWEEK. “It’s going to be the inverse of that where every ad is created for every user in that particular user session, tailored to be highly contextual and relevant without requiring any approvals.”
The $10 million funding round was led by M13, with participation from Torch Capital and Parable VC.
According to a pitch deck shared exclusively with ADWEEK, Kontext claims its ad product helped a major generative AI app increase average revenue per user from $0.24 to $0.40—a 66% lift—by adding ad-supported monetization.
The company also ran a pilot with casual game developer Nimblebit, using its text-only ads to promote the mobile game Tiny Tower. The campaign drove a 1.58% click-through rate and a cost-per-install under $2, which outperformed a concurrent Meta campaign by 24%. Kontext reported a $2.50 CPM, compared to Meta’s $7.35. The deck doesn’t specify where the ads were placed.
As AI chatbots and search engines increasingly become the default interface for information, Kiska argues traditional ad formats like banners won’t translate. “Nobody wants to see an ugly, irrelevant banner stuck in the middle of a chat,” he said.
Kontext isn’t the only company trying to monetize AI surfaces—competitors like ProRata and Perplexity are also pitching ad products for its AI search interfaces.
Kontext’s core pitch is that ads can help subsidize the cost of running AI chatbots—particularly for the vast majority of users who interact with chatbots for free. 
To help cover that increased cost, the company offers publishers a monetization layer. Kontext takes a 30% cut of the ad revenue it generates. It structures its deals around different performance models like CPM, CPC, or ROAS.
Check out the pitch deck below.
Trishla is an Adweek staff reporter covering tech policy.
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