alt Hacker NewsSpinning up an all-new ad network is pretty tough. I would think OpenAI would need to beat Meta/Google on basics like CPM in order for the network effects to make it desirable for ad vendors over Meta/Google. Ad budgets are fixed and zero-sum and vendors (in my head, I don't know) would prefer to spend their money on the best network giving the best results. I don't know if ads in LLM chats can get there.
Replies
I thought that most advertisers go through middlemen and do not do business with the ad networks directly? So you only have to make it attractive for the middlemen (of which there are fewer), and that shouldn't be a problem for anything AI-related.
Furthermore, anyone offering some sort of assisted browsing service is automatically in the ad business, regardless what they do with affiliate links in generated page summaries.
They have all the resources anyone could possibly need to do this, including an enormous list of companies who would kill to get their products into ChatGPT. It’s “just” an execution challenge.
Spotify, Netflix, Amazon Prime, Reddit, Twitter etc all have increasingly profitable ads
I'm sure llm providers will also figure it out in due time. Consumer products are generally a good fit for ads, even if it takes time to reach full potential
They have enough money for it, and they hire former Google and FB execs. As long as they have eyeballs, it will work.
If Apple can build an ad system within the app store, I don't see why OpenAI can't do that for ChatGPT.
Why would they need to beat Meta/Google, and at what game? They just won’t let any other add network work in their app. Voila! You just beat Meta/Google, and they didn’t even compete with them. I guess they could provide some sort of SDK for websites to embed that tracks users, or they could come up with a browser extension that tracks users too. They already have an app that people are freely giving them so much info. Where else could the compete as you suggest? Being a generic ad platform to serve ads not through their app?
If OpenAI manages to get the agentic buying going, that could be big. They could tie the ad bidding to the user actually making the purchase, instead of just paying for clicks.
Microsoft owns a big chunk of them and already has a big network. Why not just use theirs?
I'm betting that they can.
Here's an idea that just popped into my head:
ChatGPT shows a sponsored entry in chat history list with a colorful border around it to get users to click. This product is something that ChatGPT knows the user desperately needs from previous chats. The user can chat directly with the product and learn more about it. The advertiser specifically sent OpenAI information (like a RAG) about their products buyers might have questions for.
When the user is ready, they can open a link to the product's website or just buy directly in ChatGPT.