Ads are coming to AI. But they don’t have to ruin the experience.

Ads are coming to AI. But they don’t have to ruin the experience.

To quickly catch you up: OpenAI announced ads are coming to ChatGPT. Anthropic answered with a very public slam in yesterday’s Super Bowl ads. So what’s the path forward?

First, what’s been stated publicly is that ads are going to start appearing in ChatGPT. These are image based ads. They appear to be somewhat related to the content of the conversation. They are paid per impression (not click) and Keyword is reporting they will cost $60 per impression, approximately 3x higher than ads on Meta, for example. And starting spend for a campaign is $200K.

What OpenAI has made clear is that their ads are not impacting the organic results you are getting from ChatGPT, even though Anthropic’s new ad spots would imply otherwise. This approach is the playbook that we shared with OpenAI and one that we all agree is the right path forward. 

The big questions we’re tracking are:

• How will the ads impact user engagement?

• Will the ads be relevant enough to be useful?

• Will the ads result in users fleeing to other LLM providers?

• Will the rest of the industry hold off (as it appears Google and Anthropic will do)? Or will they see this as the starting pistol to start running their own ads?

Much remains to be seen. But our approach has always been to minimize these risks. The ideal starting point for ads in LLMs should be:

• Privacy friendly

• Priced on a cost-per-click rather than impressions based model

• Integrated smoothly into the conversation

• Text based rather than display

• Extremely relevant to the topics being discussed

• Helpful to the end user

• Allow LLMs to remain freely available for all to use with or without a paid subscription

That last point is worth digging into. There are hundreds of LLMs and chatbot experiences that are operating at a loss. Introducing a non-disruptive ad platform would help them offset token costs, allow for broader ecosystem growth and might even provide them with a sustainable and profitable business model. Now imagine how many other AI start up ideas are waiting to launch until they have a business model. This would empower those ideas to come to life, too. The same thing happened with mobile apps. Once a plug-and-play ad platform was established, it allowed for millions of mobile apps to come to life. All those ideas finally had a way to cover development costs and make money. 

A similar opportunity is just waiting to happen in the AI space. That’s why we’ve always believed, it’s not enough to just launch ads in AI, it’s essential to get the ad format, targeting and privacy right. 

So where to start? Start with the ecosystem. Start with those thousands of existing AI companies in need of a business model and the many thousands more that would launch if they had one. In other words, do the opposite of starting with ChatGPT. We’ll get there eventually, but the smart move is always to “scale the hills before summiting the mountains.”