Token-level advertising embeds advertiser influence directly into AI generation through auction mechanisms, enabling ads that feel native to AI responses rather than inserted into predefined slots.
This paper proposes LAMA, a new advertising system for AI-generated content that works at the token level during text generation. Instead of traditional ad slots, advertisers influence which words the AI generates next, and the system uses an auction mechanism to decide whose influence wins. Experiments show it can increase revenue while keeping response quality high.