GenAI & Advertising: What ChatGPT and others are doing
A look at how the major players are treating ads
For the past couple of years, advertising in generative AI has mostly been speculation, with the exception of Perplexity which dabbled last year before pulling back citing a lack of demonstrable ROI.
With LLM usage increasing vs search engines (but still, it should be noted, a relative minority), and only so much to be made from subscriptions, it does beg the question how with so much investment the likes of OpenAI will see a meaningful return.
So, with that in mind, ChatGPT are beginning small-scale advertising experiments for free-tier users, with clearly labelled placements appearing alongside responses rather than inside the answers themselves. It’s a little like web banner advertising was back before everything was so much more contextual and targeted.
It should be noted that this point that Claude has fought against this positioning, and has said it will won’t introduce ads. “There are many good places for advertising… a conversation with Claude is not one of them.”
In terms of ChatGPT’s ads, it’s an intentionally cautious rollout - trust is key for the product, and anything that feels like “pay-to-win answers” would quickly undermine it. It’s also being limited only to advertisers willing to stump up $200k at minimum (which, while a huge figure, is ordinarily how these platforms roll this out, so shouldn’t come as a massive surprise).
The logistics around marking sections of text as “sponsored” also feel like a massive headache from where I’m sat.
Google, meanwhile, is approaching the shift from a different direction: using AI to bolster its ad offering, rather than integrating ads into the AI offering. Chief Business Officer Philipp Schindler summarised is as such:
“Gemini’s understanding of intent has increased our ability to deliver ads on longer, more complex searches that were previously challenging to monetize… Gemini models also have a significant impact on query understanding in non-English languages, expanding opportunities for businesses to scale globally.”
So, in short;
ChatGPT - experimenting with limited ad offering for a select few
Claude - no interest in ads
Google - using AI to improve its current ad offering
Perplexity - tried ads, didn’t work. But presumably is keeping a close eye on ChatGPT’s progress.
It’s fascinating to see the major players taking different approaches, and it’s something I’ll be checking in on for sure.
That’s it for this week! I’m working a little less over the next few weeks, but I’ll be back soon with more updates from the world of digital marketing.
If you found this interesting, I would hugely appreciate it if you shared with your friends and colleagues.
If you’re feeling particularly generous and enjoyed this edition, I won’t stop you from buying me a coffee. Otherwise, I’ll see you next time 🫶