The Wall Street Journal reported yesterday that Anthropic may have a better business model than OpenAI due to its focus on enterprise customers rather than consumers.
Nevertheless, WSJ reporter Asa Fitch said that ads are clearly on the horizon for OpenAI’s ChatGPT:
“The obvious revenue stream for OpenAI’s consumer business will be advertising. But it isn’t clear how OpenAI or its competitors would inject ads into chatbots. It won’t be as straightforward as search ads; users wouldn’t likely welcome brand placement in their bot chats. And as it looks for an ad-revenue model, OpenAI is in the unenviable position of competing with Google, which has its own suite of mass-market AI tools and far deeper roots in advertising.”
Read more from the WSJ. (October 26)
More: From hatred to hiring: OpenAI’s advertising change of heart (October 23) – Digiday (subscription)
Related: Condé Nast’s Strategy for Media’s New Normal (with AI): Glam Events and Paywalls (October 26) – The Wall Street Journal (subscription)
From tipsheet: Agreed! OpenAI’s Chat GPT will integrate ads. Those fat advertising margins are too big to resist.
Also, if OpenAI were to hesitate, Google will grab all the chatbot ad revenue – not to mention Amazon with its Anthropic investment and Anthropic’s Claude chatbot (with Amazon shopping ads?) waiting in the wings.
LLMS & CHATBOTS
Developments
- OpenAI Moves to Generate AI Music in Potential Rivalry With Startup Suno (October 24) – The Information (subscription)
- OpenAI and Anthropic vs. app developers: Tech’s Cronos syndrome (October 23) – The Economist (subscription)
- Introducing Mistral AI Studio – The Production AI Platform (October 24) – Mistral
LLMs & CHATBOTS
Measuring ChatGPT E-commerce results
New research titled, “ChatGPT Referrals to E-Commerce Websites: Do LLMs Outperform Traditional Channels?” provides a provocative first look at shopping revenue referred by OpenAI’s ChatGPT. See it on SSRN. (October 18)
To be clear, this is not a report on ChatGPT’s new Instant Checkout (launched at the end of September) nor is it a read-out on announced ChatGPT partnerships with Shopify and Etsy. Rather, the report extrapolates from third-party data from August 2024 to August 2025.
Nevertheless, the two German researchers emphasized, “Our empirical findings do not support common expectations about oLLM’s (organic Large Language Model) superiority for e-commerce.” But, the researchers did find an upswing in performance over time as, perhaps, OpenAI may have optimized its e-commerce opportunity.
Modern Retail noted that the research, which has not been peer-reviewed, comes with several limitations: “For one, it measures last-click referrals, meaning it doesn’t capture how often ChatGPT may influence shoppers earlier in their research.”
Read the overview. (October 21)
LLMs & CHATBOTS
Earnings reports reveal chatbot impact
The above research report using third-party data feels like near-term ‘noise.’
With an integrated feature such as Instant Checkout in OpenAI’s ChatGPT, we’ll get to see whether the answer engine can facilitate a path-to-purchase this holiday season via first-party data.
Specifically, the earnings reports for OpenAI partners Etsy and Shopify are this Wednesday, October 29, and Tuesday, November 4, respectively. Updates on ChatGPT from the merchant aggregators on their Q3 earnings calls are possible.
Both Etsy and Shopify product feeds have been integrated into ChatGPT search results. And Etsy has been available in Instant Checkout for single item purchases since its launch in late September.
But, a sharper look into revenue impact from ChatGPT may not be available until both companies report their Q4 earnings early next year. And by then, full integration with Instant Checkout (Shopify, plus multi-item, for example) should have taken place.
From tipsheet: I’ll guess OpenAI will roll-out a more robust version of Instant Checkout this week – just in time for the holidays and holiday shopper traffic.
BRANDS
Mondelez slashing marketing costs with AI
Brand marketer Mondelez’s (formerly Kraft Foods) AI efforts with marketing are back in the news. The company told Reuters late last week that it reduced the cost of its marketing content up to 50% by using a generative AI tool for creative.
Mondelez is responsible for brands such as Oreos, Trident, Cadbury and many more.
Jon Halvorson, Mondelez’s global senior vice president of consumer experience, said that his company “began developing the tool last year with IT firm Accenture and expects that it will be capable of making short TV ads that would be ready to air as soon as next year’s holiday season, and potentially for the 2027 Super Bowl.” Halvorson added that $40 million has been invested to date by the brand in developing the AI tool.
Read Reuters on CNBC. (October 24)
From September: Mondelēz International Joins Forces with Accenture and Publicis Groupe to Advance AI-Powered Marketing Capabilities (September 24) – Mondelez
From tipsheet: This is a win for agency holding company Publicis which is leading the charge on creative execution according to the September press release.
BROWSERS
The rise of traffic verification (again)
A search engine marketing (SEM) firm called Search Atlas is flagging what it’s calling “a major issue” with OpenAI’s new Atlas web browser. The SEM firm claimed that by using agents “the AI-powered browser can interact with websites in a way that looks indistinguishable from real human users” – potentially clicking ads, too – and therefore new “traffic verification” tools may be a necessity.
Search Atlas’ Manick Bhan told Search Engine Land he sees “the rise of AI-driven agents operating in the background will make separating human and AI activity critical for accurate measurement and protecting ad budgets.” Read more.
From tipsheet: Fraudulent traffic? Where we have heard this before? Ads!
TECH
Criteo aiming at trifecta with AI
Previewing a blog post on his company’s AI opportunity, Criteo CEO Michael Komasinski made clear Criteo is focused on unlocking the AI-ads-commerce trifecta.
Mr. Komasinski wrote on LinkedIn a week ago:
“Large language models are becoming new shopping channels, fine-tuned based on what people say they want. But true commerce performance comes from understanding what people actually do.
That’s why the future belongs to hybrid systems that unite both: the reasoning power of language with the precision of deep recommendation systems.
As AI platforms move into the agentic era, success will depend on making the right recommendations wherever consumers are. At Criteo, years of deep product recommendation experience give us a unique foundation to bridge these worlds and power the next generation of commerce AI.”
More: “The Future of Commerce Recommendation: Why Hybrid Systems Will Win” (October 14) – Chief AI Architect Flavian Vasile, Criteo
AGENCIES
QOTD: WPP Media CEO pitches marketers
“True transformation requires abandoning what may have made you successful to embrace what makes you essential to consumers. It’s about being adaptive while focused on a lasting impact…”
Read more via Lou Paskalis on LinkedIn. (October 23)
TECH
Amazon DSP footing the bill
Late Friday, Adweek reported that AI-enabled Amazon DSP is willing to foot the bill on head-to-head tests with other DSPs (i.e. companies like The Trade Desk).
Adweek’s Kendra Barnett reported:
“In one email exchange reviewed by ADWEEK, Amazon also told an agency that it would foot the bill for the ad inventory, technology, and media measurement tools required to conduct the test.
As part of the test, Amazon would run dual campaigns in its DSP and an agency’s chosen rival DSP for a minimum of four to six weeks, according to the slides, running during the same dates and time periods, with equal budgets allocated in both DSPs.”
Read more – including a “leaked” Amazon DSP pitch deck. (October 24 – subscription)
From tipsheet: With what appears to be a blank check, Amazon DSP is laser-focused on beating the competition – i.e. The Trade Desk. TTD reports earnings on Thursday, November 6.
FINANCIALS
Big Tech Q3 earnings reports
- Meta – This Wednesday, October 29 — $1.85 trillion market cap as of Friday
- Google – This Wednesday, October 29 — $3.15 trillion market cap
- Microsoft (fiscal Q1 report) – This Wednesday, October 29 — $3.89 trillion market cap
- Amazon – This Thursday, October 30 — $2.39 trillion market cap
Market cap data is as of market close on Friday, October 24.
From tipsheet: Last quarter, Meta was arguably the biggest surprise with its robust earnings. But, Google was firing on all cylinders, too, — including Search, according to the company — and its stock has risen 36% since its July 23 earnings report.
MORE
- Perplexity vs. Reddit: Everything You Need To Know About A Landmark Case (October 24) – Henry Innis
- Meet Halo: Permutive’s new agentic suite that infinitely scales direct buying (October 23) – Permutive
- AI is changing the hiring practices of marketing agencies (October 24) – MarTech
- Case study: EY and Adobe are using agentic AI to transform marketing at scale (October 22) – EY
- Ad executive challenges ageism myths in digital industry debate (October 26) – PPC Land