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Predicting OpenAI's ad strategy

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Re: Predicting OpenAI's ad strategy

#431

Post by matheusmoreira »

mancerayder wrote: post #44
MontyCarloHall wrote: post #6

I think ads will inevitably roll out across all tiers, even the expensive paid ones. Ad revenue isn't uniformly distributed across users, but rather heavily skewed towards the wealthiest users, exactly the users most able to purchase an ad-free experience. The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue. Google realized this a…

This kills me, and you're right - there's no escaping the ads even with a sub. Take online journalism as an example. We're already being double-billed. Expensive subscription news like WSJ, Bloomberg and it's been a while but even FT require ad blockers even if you're subscribed.. If you're not subscribed you don't even see the ads because you can't see the full article. It's wild that we've normalized this. There's…

> There's no longer any argument in favor of an ad model when you're paying 20-30 dollars a month already

Sure there is. CEO needs a new yacht. He can't afford to leave money on the table. All those subscribers? They must have a lot of disposable income if they can afford to blow it on "journalism". It would be stupid not to advertise to them.

Re: Predicting OpenAI's ad strategy

#432

Post by skeltoac »

mwcz wrote: post #170
skeltoac wrote: post #131

To those who believe ads are evil and must be stopped, I ask how the world will work if we kill the freedom to sell space for commercial messages where people can see them.

In general I think the answer could be pretty simple: dedicated marketplaces for products and services, where we go to search for the things we need and want. A humble newspaper contains great examples of good and bad advertising. Newspapers have whole pages of bad ads, and random bad ads wedged between actual content. Ads have a perverse incentive to mimic the look of actual content, just like on the web. I'd never…

Others like myself do consider the ads when we read the newspaper. I find out about events and local companies that way. I don’t see many print ads that confuse me as to whether they are paid advertisements at a glance.

Re: Predicting OpenAI's ad strategy

#433

Post by mgraczyk »

bastawhiz wrote: post #430
mgraczyk wrote: post #410

Earlier quoted context omitted.

The ARPU will likely remain low enough that it's not worth potential churn to competitors

That's fine until all their competitors are doing it as well

Seems very unlikely considering the current equilibrium is for many services to offer ad-free premium versions, even recently creating these tiers. If anything the trend is moving in the other direction, more services offer paid ad free tiers.

Youtube, Spotify, Amazon Prime video, etc

Re: Predicting OpenAI's ad strategy

#434

Post by skeltoac »

hackable_sand wrote: post #210
yoyohello13 wrote: post #193

Earlier quoted context omitted.

I don't think ads are evil, but the techniques used to get eyes are evil. Using fear, hate, desire to get people to click has a negative impact on society. I don't think ads should be banned, but engineering 'engagement' definitely should.

Ads should be banned

What is and what is not an ad? What exactly do you want to ban?

Re: Predicting OpenAI's ad strategy

#435

Post by Dylan16807 »

parineum wrote: post #261
malfist wrote: post #212

Earlier quoted context omitted.

But there's a big difference. The paper copy didn't harvest data from you, didn't infect you, didn't spy on you or steal resources from your computer or internet bandwidth. All the advertiser knew about you was you were a subscriber to FT, and maybe what the _average_ demographic of an FT subscriber was. Nothing about you personally.

The paper copy did do that, just not as individualized. People would choose which publications to put their ads in based on data collected about their subscribers. The job of ad men has always been just as much about were to put the ad as much as what the ad was.

"just not as individualized" is an enormous "just". Each ad is based on the total audience for a single publication. No fine-grained filtering, no personal dossiers.

And none of the rest of that list of bad things happens.

Re: Predicting OpenAI's ad strategy

#436

Post by skeltoac »

yoyohello13 wrote: post #193
skeltoac wrote: post #131

To those who believe ads are evil and must be stopped, I ask how the world will work if we kill the freedom to sell space for commercial messages where people can see them.

I don't think ads are evil, but the techniques used to get eyes are evil. Using fear, hate, desire to get people to click has a negative impact on society. I don't think ads should be banned, but engineering 'engagement' definitely should.

I agree!

Re: Predicting OpenAI's ad strategy

#437

Post by Marsymars »

Anon1096 wrote: post #426
Marsymars wrote: post #390

Earlier quoted context omitted.

> Every dollar you spend on advertising provides additional customers. If you’re just taking these customers from competitors, the marginal utility can be pretty low. e.g. If you consider a world where there are no ads for cars, people aren’t going to meaningfully lose out of the utility they get from cars, carmakers simply avoid the prisoner’s dilemma of having to advertise as much as the next manufacturer.

The world isn't zero sum, advertising grows the pie for all involved. One of the best examples would be the iphone when it was released. Even in your example category of cars Tesla and later Rivian/Lucid/BYD marketing was a game changer for electric vehicles. Very few ads are for products where exact 1:1 competitors exist (though it's nonzero, maybe something like a commingled Amazon Basics widget).

My point is that advertising can grow the pie, but it doesn't necessarily do so, and even if advertising is net pie-growing, it can still shrink the pie in specific markets.

For a more on-the-nose example than the arms race between car manufacturers, consider cigarette ads. If the ads simply convert smokers between brands, then it's basically zero sum minus the cost of the ads. If the ads convert non-smokers, then the ads are of significant negative utility taking their externalities into account.

> Very few ads are for products where exact 1:1 competitors exist

Sure, but also, I'd contend that few purchases are made based on ads informing consumers of meaningful differences between products. The products could be 1:1 duplicates, and the ads could be identical.

e.g. I just turned off my ad-blocker and fired up YouTube, the first four ads I see:

1. An ad for a multivitamin. Zero mention of any differentiating feature from a generic multivitamin.

2. An ad for a grocery delivery service. Zero mention of any differentiating features from any other food delivery service. (This one was a bit wild to me - this is actually service I already know and use, I'd never seen advertising for them, and this ad didn't mention any of the reasons anyone would choose to use them.)

3. An ad for some predatory-looking debt-relief service. Maybe not predatory, but no information about why that debt-relief service would be better than any other debt relief service.

4. An ad for a jeans company. I actually had to google this one to figure out what it was even an ad for, the ad just featured shots of people hiking in mountains and dunking into icy lakes without any mention of clothing.

Re: Predicting OpenAI's ad strategy

#438

Post by skeltoac »

aniviacat wrote: post #219
skeltoac wrote: post #131

To those who believe ads are evil and must be stopped, I ask how the world will work if we kill the freedom to sell space for commercial messages where people can see them.

What are you worried will happen? ChatGPT releases and noone will know? Anyone interested in staying up to date with new technology can read a tech newspaper. That newspaper is paid by the readers, so its incentive is to show actually interesting products. It is not paid by some random company whose product might be bad or outright malicious.

Depends on what exactly gets banned. What is an ad? What isn’t? Must all information be paid for by the audience? I wish someone would tell me what this ban is supposed to cover.

I worry that innovators and small businesses won’t be able to get their message out efficiently. You won’t be able to display your message on anyone else’s property. You won’t be able to take any compensation for promoting anything.

Re: Predicting OpenAI's ad strategy

#439

Post by dkdcio »

skeltoac wrote: post #429
dkdcio wrote: post #137

Earlier quoted context omitted.

just fine? what do you think would happen/what’s your actual argument against out of curiosity

Advertising is how I learned about lots of things I am glad I learned about. I am furious about lots of the ads that I see. I want to stop certain kinds of advertising. I live where there are no billboards allowed and I love that. But I want to live in a world where people can pay to have their messages displayed where they will be seen. Simply because banning that activity would cripple the flow of information. That…

information flows fine without paid ads, and with much better incentives

> people can pay to have their messages displayed where they will be seen

…why? distribution of information is free across the world, which was not the case a century ago. let the message speak for itself

I ask again, what’s your actual argument against? you’ve seen things through ads you’ve liked? you think people should be allowed to pay to put their thumbs on the scale of the distribution of information? to what end?

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