Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

adweek.com

Post reply on HN
Print view View original

41–50 of 71 posts

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#41

Post by netdevphoenix »

ozlikethewizard wrote: post #26

Ignoring whether or not OpenAI can reach this, do we think a massive expansion of ad revenue is fruit of the poisonous tree for GPTs? Does anyone want to use a tool that is capable of disguising an ad as a geniune recommendation at anytime? I suppose if the platforms become super entrenched and we boil slowly then they'll get away with it

> Does anyone want to use a tool that is capable of disguising an ad as a geniune recommendation at anytime?

It depends on the economics and usefulness of the tool. Google Search got away with it because it was useful AND trading zero cost of usage for ads was worth it for most.

Whether LLMs can get away with it seems very unclear now as they don't seem as popular as search engines.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#42

Post by wonnage »

adventured wrote: post #22
zpeti wrote: post #15

Earlier quoted context omitted.

Because writing a headline with 90% miss in it will get more clicks than actually thinking through business strategy and realistic projections.

The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business. If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on…

WhatsApp and Messenger have billions of users but don’t make much ad revenue. I’m sure there exists a way to show ads in ChatGPT that will be figured out eventually but so far nobody’s figured out how to monetize chat as a medium

Also it’s basically free for Google to show you a sponsored result but embedding one in a ChatGPT response actually costs money (assuming they’re part of the generated response).

Lastly I will bet you one Stargate datacenter that Meta has thought about LLM-based advertising, and if there’s any low hanging fruit there it’s already been tried

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#43

Post by m4tthumphrey »

JumpCrisscross wrote: post #39
dependsontheq wrote: post #17

There are only two successful ad business forms in the digital world, attention or intent. Meta is built on attention and Google and others like amazon are built on intent. Everything else is optimizing the targetting data in some kind of behavioral way to get better intent data or to reach the right users. I have no idea where something like Chatgpt stands on that axis, it has actually very little attention (in hour…

> Meta is built on attention and Google and others like amazon are built on intent I'm having trouble seeing the difference. They both capitalise on attention, i.e. eyeballs. And they both try to predict what you're likely to click on so they can show you the most-relevant ads.

When you use Google you are generally actively looking for something. When you use Facebook you get ads for things you aren't looking for.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#44

Post by netdevphoenix »

lelanthran wrote: post #35
ArtTimeInvestor wrote: post #9

Emarketer’s data finds that standalone chatbots like ChatGPT, Microsoft Copilot app, Google AI Mode, and Amazon Alexa for Shopping (formerly Rufus) in U.S, will generate less than $1 billion in ad revenue this year, and just $5.41 billion by 2030. How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day ab…

> How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day about everything. And Gemini can ask questions what exactly I mean. Why wouldn't Alphabet be able to generate more revenue from this than from search? When you used google 10x a day, you saw, at a minimum, 20 ads/day. How many ads are you seeing wh…

> When you used google 10x a day, you saw, at a minimum, 20 ads/day

That's assuming a user with no ad-blocker which is an ever diminishing number of users

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#45

Post by JumpCrisscross »

thg wrote: post #12
moezd wrote: post #3

So, how do their overall financials look these days?

Will Locket wrote about it last month: https://www.planetearthandbeyond.co/p/openai-is-in-a-far-wor... tldr is: They either get a successful IPO to stave off bankruptcy for a couple more months, or they're going to be bankrupt by the beginning of next year.

"It means that OpenAI could soon rack up losses that exceed its asset value. In other words, they are on course to slam into bankruptcy this year."

...that's not how bankruptcy happens. What is this guy's background?

Assets on a balance sheet are held at book value. You can absolutely run GAAP losses that exceed net assets without running into bankruptcy, particularly if you're granting (and having employees exercise) options.

The critical measures are cash in and out and debt-like obligations. None of those metrics point to OpenAI going bankrupt this year unless they do something really fucking creative. (Which, to be clear, is Altman's M.O.)

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#46

Post by JumpCrisscross »

m4tthumphrey wrote: post #43
JumpCrisscross wrote: post #39

Earlier quoted context omitted.

> Meta is built on attention and Google and others like amazon are built on intent I'm having trouble seeing the difference. They both capitalise on attention, i.e. eyeballs. And they both try to predict what you're likely to click on so they can show you the most-relevant ads.

When you use Google you are generally actively looking for something. When you use Facebook you get ads for things you aren't looking for.

I get that from the product perspective. I'm just not seeing it from the ad side. Attention is a prerequisite to serving an ad. Correctly predicting intent is how you maximise its value.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#47

Post by georgemcbay »

m4tthumphrey wrote: post #43
JumpCrisscross wrote: post #39

Earlier quoted context omitted.

> Meta is built on attention and Google and others like amazon are built on intent I'm having trouble seeing the difference. They both capitalise on attention, i.e. eyeballs. And they both try to predict what you're likely to click on so they can show you the most-relevant ads.

When you use Google you are generally actively looking for something. When you use Facebook you get ads for things you aren't looking for.

> When you use Facebook you get ads for things you aren't looking for.

When you use Facebook you get ads for things you are looking for in a broad sense, they just happen to figure out what you are looking for via fingerprinting and spying on all your web and app activity (to the maximum extent allowed by platforms and regulators).

Google, of course, also does this in addition to looking at your currently active web search.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#48

Post by m4tthumphrey »

georgemcbay wrote: post #47
m4tthumphrey wrote: post #43

Earlier quoted context omitted.

When you use Google you are generally actively looking for something. When you use Facebook you get ads for things you aren't looking for.

> When you use Facebook you get ads for things you aren't looking for. When you use Facebook you get ads for things you are looking for in a broad sense, they just happen to figure out what you are looking for via fingerprinting and spying on all your web and app activity (to the maximum extent allowed by platforms and regulators). Google, of course, also does this in addition to looking at your currently active web…

Sure, they retarget ads they think you might want to see, but the difference is when using Google you are actively looking for something, not passively.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#49

Post by eddythompson80 »

ArtTimeInvestor wrote: post #9

Emarketer’s data finds that standalone chatbots like ChatGPT, Microsoft Copilot app, Google AI Mode, and Amazon Alexa for Shopping (formerly Rufus) in U.S, will generate less than $1 billion in ad revenue this year, and just $5.41 billion by 2030. How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day ab…

> Google's ad revenue from search is over $100B per year.

Google serves ads on search, maps, YouTube, android apps, amd all websites using Adsense or video ads

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#50

Post by xdertz »

dependsontheq wrote: post #17

There are only two successful ad business forms in the digital world, attention or intent. Meta is built on attention and Google and others like amazon are built on intent. Everything else is optimizing the targetting data in some kind of behavioral way to get better intent data or to reach the right users. I have no idea where something like Chatgpt stands on that axis, it has actually very little attention (in hour…

LLMs are great for product research, as in "I want to buy X, what brands are there and what are the pros/cons and what do users report".

Lots of potential to game the results there. If that is enough to sustain the business is another question.

Post reply on HN