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Predicting OpenAI's ad strategy

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Re: Predicting OpenAI's ad strategy

#311

Post by gretch »

bell-cot wrote: post #132
soared wrote: post #101

Earlier quoted context omitted.

This is kind of broken logic. You’re not required to advertise. If you want to scale your business into millions in revenue, then you’ll likely need to advertise. The best ROI is generally google/meta, but you have countless other options. You can buy ads directly from most websites, it just doesn’t scale.

> You're not required to advertise. https://en.wikipedia.org/wiki/Arms_race If you are considering human society as a whole, it is a disastrously poor use of resources. But if you are an arms merchant (or dominant advertising platform), it is fabulously profitable.

> it is a disastrously poor use of resources

For it to be a poor use of resources, you have to have some goal you are optimizing against.

And I think you'll come to find that the assumed goal in your head is not one that's widely shared across what people in society actually want.

Okay, maybe the digital ad is a waste of resources. But is it any more of a waste than the gender reveal confetti that it was advertising? How about even the idea of a gender reveal party.

What about an enamel pokemon fridge magnet?

After a very low bar (for 2026), human essentials are taken care of and people mostly want luxury/leisure consumer goods for entertainment.

Re: Predicting OpenAI's ad strategy

#313

Post by fweimer »

Aurornis wrote: post #211
_factor wrote: post #200

Earlier quoted context omitted.

I doubt the ROI would be so high if organic results stood any chance. The ROI on bribes is very high too, but we haven’t legalized those (officially).

> I doubt the ROI would be so high if organic results stood any chance. This is just the same fallacy. In what world are people going to organically share ads for this company on their Facebook feeds? Who is going to Google the company name before they know about it? Every business needs to proactively acquire customers. Distribution and CAC are top of mind values for any growth business. It has been this way long be…

A lot of people enter the company or product name into the browser's search field and reach their intended target through an ad at the top of the results. If they proceed to purchase something, does this count as a conversion? I think it does. Unlike traditional advertising, this didn't influence the customer's decision to buy at all.

Re: Predicting OpenAI's ad strategy

#314

Post by fooker »

gruez wrote: post #241
csense wrote: post #209

Earlier quoted context omitted.

Advertising spend being too high is a symptom of a supply glut. Too many products in the marketplace, not enough consumers to buy them. In a different world where there are higher wages, more people would have more spending power. Then companies wouldn't have to spend as many dollars on advertising, which they could split between higher wages, higher margins and lower prices. Alas, the short-term single-firm directio…

>Maybe Henry Ford was on to something when he shocked the world by paying his employees enough to afford the product they were making (more than doubling many workers' wages)... That's a nice story to tell, but the economics never works out if you do the math. Whatever extra wages you pay, you only get a fraction of that back in increased sales. How much percent of a worker's income do you think is spent on a car? As…

> the economics never works out if you do the math

The economics work out pretty well if you are the only game in town where your employees can purchase what you have marketed to be the next big thing and status symbol that everyone must have.

Re: Predicting OpenAI's ad strategy

#315

Post by yfw »

parineum wrote: post #246
anal_reactor wrote: post #195

Earlier quoted context omitted.

The problem is that most businesses used to be local. This naturally limited competition and gave your business a chance, even if it sucked. Nowadays the competition is global.

People don't really care to address that most of the mom and pop businesses that went out of business because Walmart/Amazon weren't offering better products or services. They got their products through the same retail suppliers, just at higher costs and the variety of choices was much lower. They also had much less generous return policies. There's a personal touch that people opine for but I think that's rose color…

The thing about mom and pop is there was competition. With amazon enshittifying you have no options.

Re: Predicting OpenAI's ad strategy

#316

Post by Retric »

gruez wrote: post #299
Retric wrote: post #297

Earlier quoted context omitted.

Your logic is flawed. 8.8% of total wages vs 0% of some lesser number isn’t 8.8% of the difference. If hypothetically you are paying 99x a year and bumping that to 100x means someone buys an 8.8x product that could be a win.

>If hypothetically you are paying 99x a year and bumping that to 100x means someone buys an 8.8x product that could be a win. What type of company would this work for? Cars are so ingrained in our society that it's doubtful the marginal Ford (or Tesla) factory worker is going to be buying a $50k car just because they paid better wages.

A luxury car manufacturer could tip the scale of someone buying their product vs someone else’s product via an arbitrarily small wage increase.

The degree to which this is generalizable is of course a different story, but it’s at least theoretically possible for a small wage bump to be a net gain for the company.

Re: Predicting OpenAI's ad strategy

#317

Post by throwaway150 »

MontyCarloHall wrote: post #46
throwaway150 wrote: post #30

Earlier quoted context omitted.

Yes, but it is still a valid counterexample to: > I think ads will inevitably roll out across all tiers

Kagi is too small and niche to have a proprietary dataset across its users large enough to make targeted advertising generate more revenue than subscriptions. OpenAI/Google/etc. operate at a much larger scale, large enough for those proprietary user datasets to be worth far more in ad revenue than any reasonable subscription fee could net.

> Kagi is too small and niche to have a proprietary dataset across its users large enough to make targeted advertising generate more revenue than subscriptions.

All of this is true. But I don't understand why you are contesting @dsr_'s comment that Kagi is a counterexample. Both are true. Kagi is too small. Yes. And Kagi is a counterexample to your original "I think ads will inevitably roll out across all tiers" claim. You said nothing about being too big or too small in that claim. So @dsr_'s comment that Kagi is a counterexample is very much on point.

Re: Predicting OpenAI's ad strategy

#318

Post by [deleted] »

phailhaus wrote: post #310

I do not understand why this is a big deal. There is no world in which ads are embedded in LLM answers, because you'd need another LLM to determine whether the "placement" was correct and included all the information that the advertiser wanted (and it still won't work 100%). They are putting ads on the side, like they've always done, leveraging all the tech that already exists to do this. This is pretty much a no-bra…

[deleted]

Re: Predicting OpenAI's ad strategy

#319

Post by littlecranky67 »

Ads will be no longer a buisness model in 3-5 years when simple, locally run models that do nothing besides blocking ads become available. Twitter, Facebook etc. already get past most modern adblockers, but the AI extension will be able to filter them. In-text advertising must be marked as advertisment in most countries, and even if it isn't, local AI will filter this probably out. So a free ChatGPT service with in-text AI can simply be countered by another local browser extension, that rewrites the text and removes ads.

One can make the point that Google, Meta and others are investing so much into AI as they know, we are facing the end of the ad-based internet economy. The investments are to create new buiness models, because their old ones are gone soon.

Re: Predicting OpenAI's ad strategy

#320

Post by stingraycharles »

dang wrote: post #307
emil-lp wrote: post #234

The title is actually The A in AGI stands for Ads Not Predicting OpenAI's ad strategy

This is standard HN moderation. The title was linkbait, so we changed it. From https://news.ycombinator.com/newsguidelines.html : " Please use the original title, unless it is misleading or linkbait ". Note the unless. When we do this, we try to find a representative phrase from the article itself that accurately and neutrally represents what the article is about. There is nearly always one of those if you look for i…

What’s the definition of linkbait in this case? I can’t find a good definition online, as the best I can find is “content designed to attract backlinks”, which this does not appear to be / isn’t related to the title?
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