LLMS & CHATBOTS
OpenAI CEO Altman warms (slightly) to ads
Sam Altman, CEO of OpenAI, joined Stratechery’s Ben Thompson for a 30-minute interview following OpenAI’s Developer Day on Monday.
tl;dr: Mr. Altman may be warming to ads but he remains coy. Read the transcript. (October 8 – subscription)
After Thompson expressed his appreciation for Meta’s Instagram ads, Altman responded:
“SAM ALTMAN: First of all, on the Instagram ads point, that was actually the thing that made me think, OK, maybe ads don’t always suck. I love Instagram ads, they’ve added value to me, I found stuff I never would’ve found, I bought a bunch of stuff, I actively like Instagram ads. I think there’s many things I respect about Meta, but getting that so right was a surprisingly cool thing for me. Other than that, I viewed ads on the Internet as sort of like a tax.
BEN THOMPSON: Well, I think that’s the problem is I think search is mostly a tax. Usually the organic results will have what you want, and then I’m going to buy ads to be on top. I’ve always defended Meta, I’m like, I think actually this is the ad model we should be happy about.
SAM ALTMAN: I agree with that.
BEN THOMPSON: So how do you think about your possibilities with business in that context?
SAM ALTMAN: I mean, again, I believe there probably is some cool ad product we can do that is a net win to the user and a sort of positive to our relationship with the user. I don’t know what it is yet, I’m not like, ‘Here is our ad model”’ already.
BEN THOMPSON: But affiliate seems like a clear win, it’s not like you have to worry about cannibalizing your ad business.
SAM ALTMAN: Yeah. That seems like a clear win.”
Mr. Altman’s tone regarding advertising appears to have improved since he expressed “hate” for ads a year ago.
Also of note is Altman’s glowing remarks about OpenAI CEO Of Applications, Fidji Simo, who joined full-time in August. He may be waiting for Ms. Simo to pop the cork on ads – which is something she helped ignite during her tenure at Meta.
From tipsheet: “Ads in a chatbot” is a clear opportunity that no LLM company has undertaken. Somebody is going to do it. Who is going to be first? I’ve got to believe that “winner” will reap rewards from being first let alone the refinement and learning that will happen thereafter.
OpenAI and Mr. Altman continue to embrace the noble goal of protecting user trust. But, it seems to me Google built a pretty good business —and reasonable trust with the user— with Google Search in spite of the ads “tax” that Altman and Stratechery’s Thompson don’t seem to like.
My two cents: If ads were just a “tax,” ads would not work.
Making better ads is a good goal, which Mr. Altman appreciates. But not strategically engaging with ads seems like a bad, long-term answer by OpenAI. At the very least, the company will need those fat ad margins and revenue to help cover the cost of AI compute. If OpenAI doesn’t grab them, someone else will.
LLMS & CHATBOTS
Developments
- Elon Musk’s xAI Set For $20B Cash Surge — Nvidia Chips At The Heart Of His AI Dream (October 8) – International Business Times
- Making AI a Shared Opportunity – Fidji Simo (October 7) – L’Opinion
- OpenAI, Anthropic eye investor funds to settle AI lawsuits: Financial Times (October 8) – The Economic Times
TECH
More transparency in the auction wanted
The Wall Street Journal reported yesterday that an industry initiative spearheaded by the Media Rating Council (MRC) is pushing digital ad auction providers to provide more transparency. Though not identified specifically, Amazon, Google and Meta are likely the primary target of what is being framed as a new standard.
The WSJ’s Patrick Coffee reported:
“Those that adopt the MRC standards, however, would agree to disclose key information such as the types of auctions they run, how they decide winners and what influences prices on their platforms, including any fees, discounts or bidding minimums. They would also pledge to disclose any significant changes.
‘We’re trying to bring sunlight into the ecosystem,’ said Ben Hovaness, chief media officer at OMD Worldwide, an agency within ad giant Omnicom, who approached MRC nearly two years ago to begin developing the standards and chaired the steering committee.”
Read more in The WSJ. (October 8 – subscription)
More: MRC Digital Advertising Auction Transparency Standards – DRAFT (September) – Media Ratings Council (PDF)
From tipsheet: With the “black box” of AI weaving its magic within the auction, this standard would seem to potentially provide some sunlight, but not all sunlight. Will be interesting to see where this initiative goes.
SELL-SIDE
IAB membership heating up on LLMs
CEO Anthony Katsur warned his membership right after Cannes this past June about the need for AI standards.
Now, IAB Tech Lab appears to be burning the midnight oil in regards to AI and the effects on its members. Digiday’s Jessica Davies reported yesterday:
“Amazon, Meta, Microsoft and Google all had seats at the table alongside 35 publishers at the IAB Tech Lab’s LLM working group in NYC last Thursday. The clearest action point: the initiative has shifted to weekly meetings as it races to find standards on how AI uses and pays for content.”
Other tech companies were there, too, according to Davies, including content distribution networks, Cloudflare and Fastly, who likely see an opportunity as “pay-per-something” (likely pay per crawl) marketplace operators.
Read more in Digiday. (October 8)
From August: IAB Tech Lab Forms AI Content Monetization Protocols (CoMP) Working Group to Set AI-Era Publisher Monetization Standards (August 19) – press release
From tipsheet: Think about the strategic change occurring for IAB members from just a year ago. What’s it going to look like next year? AI is moving faster than any trend in advertising before including the internet.
BRANDS
CMO and the chief analytics officer
Did you know that Meta’s CMO is also its chief analytics officer? Now you do. (Me, too)
Meet Meta CMO Alex Schultz, who has been at Meta since 2007 and is promoting his new book, “Click Here – The Art and Science of Digital Marketing and Advertising.” See it.
In an interview with Inc., Mr. Schultz shared some of his best practices as a marketer and analytics maven, including, “How to deploy AI chatbots as a powerful sales force.”
Ironically, Meta just launched its Business AI chatbot last week as it looks to collapse the purchase funnel.
Read more in Inc. (October 8)
From tipsheet: Given the science of performance marketing today and the way Meta is approaching it, an analytics expert makes sense at the top of Meta’s org chart. I’m not sure it works for every company, though.
BRANDS
Anthropic spending on ads
AI company Anthropic was —literally— in the streets of New York City last week to take on rival OpenAI.
Reporter Trishla Ostwal teased her Adweek article about the marketing event on X:
“Anthropic popped up at Air Mail Weekly, serving coffee, hand-drawn art, and poetry cameras. Over 5K New Yorkers took notice, queuing around the block. With 10M+ impressions online, zero AI slop, the startup says its opting out of attention economy–unlike its rivals…”
Read more on X. (October 8)
Also: Anthropic’s Anti-AI Slop Pop-Up Draws Thousands in NYC – Adweek (October 8)
From tipsheet: The big AI companies are not hesitating in using advertising (see also OpenAI’s latest effort) to promote their brands and product to the public. This may be a good sign for the inclusion of AI advertising and marketing opportunities within AI answer engines.
TECH
Putting the agentic in data collaboration
AI is causing advertising data collaboration services companies to re-think how and what they do. Startup Optable, which raised $20 million in January from investors including Hearst Ventures, believes the future of data collaboration is agentic.
A press release from yesterday explained the details. Read it. (October 8)
Optable CEO Vlad Stesin, whose company is also co-sponsoring an event next week aiming at standards for agentic advertising (more here), discussed the differentiation of his platform with AdExchanger yesterday:
“One of the main draws of the platform (…) is improved audience monetization for publishers. The new agents tap into advertisers’ briefs and audience data, connecting each campaign to its most relevant audiences – and even generating new ones. (…)
Eventually, Optable intends to have an array of agents each specialized in its own task, from planner agents to buyer agents to seller agents. Some customers are already building out their own agents with insights specific to their business…”
Augmented reality tech and gaming ad network Unity Software is also featured. Unity and Optable announced a strategic partnership in June which resulted in Unity’s Audience Hub. According to a Unity blog post, the Hub appears to have just rolled out in September.
Read more. (October 8)
From tipsheet: This is about data enrichment, AI and automation. The sell-side wants to match its users and third-party provider data with the marketer’s customer dataset as well as unlock, new mutual opportunities. Better data inputs are good for AI-enabled ad platform targeting, too.
Related: When AI agents do the shopping: Insights from 100 conversations with ChatGPT Agent mode (October 8) – Search Engine Land
MEASUREMENT
Microsoft research: Measuring AI adoption
“Measuring global AI diffusion remains challenging due to a lack of population-normalized, cross-country usage data. We introduce AI User Share, a novel indicator that estimates the share of each country’s working-age population actively using AI tools. Built from anonymized Microsoft telemetry and adjusted for device access and mobile scaling, this metric spans 148 economies and provides consistent, real-time insight into global AI diffusion. We find wide variation in adoption, with a strong correlation between AI User Share and GDP…”
Read: “Measuring AI Diffusion: A Population-Normalized Metric for Tracking Global AI Usage” (September) – Microsoft AI for Good Lab
TECH
Making content marketing with AI
Laurie Villanueva of agency Good2Bsocial provided her tips and tricks for creating content marketing for law marketers on law community website, JD Supra.
She began with generative AI tools, which she said are “streamlining processes, taking on routine tasks, and leaving marketers free to focus on what matters most…”
CoCounsel by Thomson Reuters, Clio Duo, MyCase IQ and OpenAI’s ChatGPT, of course, were among those that made her AI-enabled law content marketing tools list. Read more. (October 8)
From tipsheet: Ms. Villanueva had tips for AI analytics and answer engine optimization, too. The proliferation of AI marketing tools focused on niches such as law are happening at lightspeed.
EVENTS
Advertising Week: Deepak Chopra talks AI
Read: At Advertising Week, “Deepak Chopra’s existential message for brands using AI” (October 8) – Ad Age (subscription)
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“Central to Chopra and Machaiah’s arguments, was the view that AI will be a force for good, which, if leveraged properly by brands, can result in happy employees, happy customers, happy investors and an overall happy business—not to mention a flourishing humanity…”
MORE
- General Motors transformation chief says AI content is performing ‘as well and better’ than human-made creative (October 8) – Adweek
- The AI Marketing Solution That Thinks In Feelings, Not Keywords (October 8) – Forbes
- European Union Outlines Strategies to Boost AI Adoption, Research (October 8) – The Wall Street Journal
- A Debate About A.I. Plays Out on the Subway Walls (October 8) – The New York Times
- Advantage+ Campaigns Using Lookalike Audiences Automatically Expand for More Performance Goals (October 6) – Jon Loomer