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Predicting OpenAI's ad strategy

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Re: Predicting OpenAI's ad strategy

#61

Post by skybrian »

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…

Maybe it’s “inevitable” in the long run, but Google didn’t start out plastering their search results with ads. They did very well with text-only ads in the margin, and it was a slippery slope from there, but it took decades. Also, they are still only running text-only ads, even though there are a lot of them.

The timing isn’t inevitable. Is OpenAI going to speedrun to the endgame? Not sure they need to.

Re: Predicting OpenAI's ad strategy

#62

Post by bearjaws »

There is something to be said about the state of advertising.

Increasingly it seems you must go to the almighty Google or Meta in order to launch any business.

We're looking to expand into a new business line and have out grown our pharmacy capacity.

The new business line will cost about $2M in software dev, and $3M for the new facility. The advertising budget? $40,000,000 (annual).

We can build 10 robotic pharmacies (~10 staff per 4000 fills daily, each) for the price of just the advertising.

Increasingly we wonder why America doesn't build more and here is why. You are going to give all your revenue to two platforms. Unless you operate in a business line with 50% margin you are screwed.

I don't know what the solution is, but its clear that the platforms are figuring out how much margin everyone has and slowly eroding it. Somewhere between 8-15% of the cost of all products we purchase is advertising spend.

Re: Predicting OpenAI's ad strategy

#63

Post by _aavaa_ »

barbazoo wrote: post #60
KellyCriterion wrote: post #31

Earlier quoted context omitted.

I stumbled upon this one as well, but I do not understand it really: Why is my job safe if Ads prove there is no AGI? Because even if there would be AGI, they could (and would?) serve ads anyway?

If AGI was around the corner, they wouldn’t have to resort to what some consider a scummy way to make money. They’d would become the most valuable company on the planet, winning the whole game. Ads show you they don’t know what else to do but they desperately need money.

This doesn’t answer the actual question: why they wouldn’t just do both?

Re: Predicting OpenAI's ad strategy

#64

Post by MontyCarloHall »

nothrabannosir wrote: post #49
andy99 wrote: post #28

Earlier quoted context omitted.

I just saw a sibling post about Kagi, maybe this is how the industry will end up, with a main provider like OpenAI and niche wrappers on top (I know Kagi is not just a google wrapper but at least they used to return google search results that they paid for).

I thought you were going to say “that comment recommending Kagi is exactly what those ads would look like: native responses making product recommendations as if they’re natural responses in the conversation”

Ding ding ding. Look at all the brands mentioned in just this thread. From a cursory look, I see:

* WSJ

* Bloomberg

* Financial Times

* Cartier

* Kagi

* Protonmail

* Coca-Cola

* HBO

* Windex

* Netflix

* Azure

* AWS

We are all ourselves advertisers, we just don't realize it. It is inevitable that chatbots will be RLHF-trained in our footsteps.

Re: Predicting OpenAI's ad strategy

#65

Post by lkbm »

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…

> Google realized this a long time ago; there is no ad-free paid version of Google Search.

Ad-free YouTube costs $14 a month (and the creators get a higher payout from premium user views than they do from the free, ad-viewing users).

Re: Predicting OpenAI's ad strategy

#66

Post by kuboble »

imiric wrote: post #22

There's no question that "AI" is the next advertising frontier. I've been saying this for years[1][2][3]. It is going to be the most lucrative form of it yet, and no "AI" company will be able to resist it. Given the exorbitant amount of resources required for this technology, advertising will probably be the only viable business model that can sustain it at scale. [1]: https://news.ycombinator.com/item?id=35706981 [2…

The exorbitant costs could save us from ads actually. instead everyone will have to pay subscriptions like for mobile phone plans. Haven't heard of the ad-based Rolls-Royce yet.

Re: Predicting OpenAI's ad strategy

#67

Post by [deleted] »

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…

[deleted]

Re: Predicting OpenAI's ad strategy

#68

Post by barbazoo »

Quarrelsome wrote: post #58
OptionOfT wrote: post #16

I remember when Netflix took out a whole page ad for their Orange is the new Black show. John Oliver had a piece on it https://www.youtube.com/watch?v=E_F5GxCwizc This is a natural extension of it. But what is revolutionary is the scale that this is now possible. We have so many people out there who now blindly trust the output of an LLM (how many colleagues have you had proudly telling you: I asked Claude and this i…

> slowly they'll become more part of the text Wouldn't that be quite challenging in terms of engineering? Given these people have been chasing AGI it would be a considerable distraction to pivot into hacking into the guts of the output to dynamically push particular product. Furthermore it would degrade their product. Furthermore you could likely keep prodding the LLM to then diss the product being advertised, especi…

I’m assuming they have much more control during training and at runtime than us with our prompts. They’ll bake in whatever the person with the checkbook says to.

Re: Predicting OpenAI's ad strategy

#69

Post by raffael_de »

dsr_ wrote: post #19
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…

Counter example: Kagi.

Why is that a counter example? Kagi is just providing a convenient access to several language models that might well advertise via API, too.
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