On Friday, Adweek reported that Perplexity’s head of advertising and shopping strategy, Taz Patel, has left the company after arriving in December. Nine months may not be long in most industries, but in the LLM world it’s an eternity. Adweek noted the company’s limited efforts at ad placements back in April which has never seemed to amount to much.
It seems hard to say if anyone is to blame here including Mr. Patel.
The company has remained front and center in the AI discussion by:
- Appearing to embrace rumors on Perplexity’s imminent sale (June 20 #1, June 20 #2, July 11) to Apple (or Meta).
- Launching the Comet browser (July 9).
- Making an underwhelming but well-covered offer for Google’s Chrome browser (August 12).
- A rumored, new round of funding at a valuation of $20 billion (August 13)
- And, most recently, jumping into the “red hot” LLM-to-publisher compensation discussions with a usage-based payment system for “publisher partners” that has yet to deliver any payments (aside from the V1 launch—here and here—back in July 2024), but makes an interesting case (August 25).
From tipsheet: Lots swirling here. Some thoughts…
Mr. Patel’s departure could signal a “deck-clearing” event prior to an imminent sale of the company. The next person to tackle the Perplexity ad biz could be from Apple (or Meta? or?).
On “Apple buying Mistral” rumors, I will posit that the French government won’t let it happen. Paris-based Mistral is theirs. Allez les bleus, Allez!
Meanwhile, if rumors of Perplexity’s latest funding round are fulfilled and the company remains independent, this makes a lot of sense for Apple. Apple then decides to take a modular approach with AI strategy rather than owning the AI tech – like Google search in Safari, Apple plugs in whatever AI is best for the consumer and their all-important Apple devices.
Finally, and for the foreseeable future, Perplexity can’t lose with its premier position in the AI-discussion. They just need to figure things out strategically before the AI investment bubble bursts.
More: “Here are the hurdles to Perplexity’s pitch as the publisher-friendly LLM” (August 29) – Digiday (subscription)
Related: “Elon Musk Just Delivered a Ringing Endorsement of the iPhone’s Staying Power” (August 31) – The Wall Street Journal
LLMs & CHATBOTS
Fidji Simo’s first interview
Last week, OpenAI CEO of Applications Fidji Simo delivered her first published interview since coming aboard full-time on August 18. The long-rumored force behind future ad monetization efforts at OpenAI, Ms. Simo talked to TIME for its list of 100 most important executives in AI today.
She was indirectly asked about ads at OpenAI as the reporter made a distinction between the responsibility OpenAI has in nurturing human agency while developing AI versus prioritizing the selling interests inherent to advertising.
Ms. Simo said in part:
“…that’s the line that we’re working with with ChatGPT, which is really helping people with their goals and, over time, being more explicit in really understanding their goals and then helping them with knowledge and information to reach their goals, but never imposing our own goals. That is not our role. Our role is to really empower people to realize theirs.”
Read the TIME article. (August 26)
From tipsheet: The argument “for ads” in OpenAI’s ChatGPT chatbot would say that you can put more power in more people’s hands if there’s an ad-supported version which offsets AI costs as well as drives the profitability of the business venture. This isn’t a public utility — yet.
The argument “against ads” might say that advertising potentially turns AI against the human user’s interests by looking to sell the human something first and foremost. That may be ok in the short term, but in the long term the misalignment with the human could be compounded by AI and could severely erode trust in AI, AGI and more.
LLMs & CHATBOTS
LUMAscape coming for AI
Last Thursday, LUMA Partners founder and CEO Terence Kawaja announced on LinkedIn:
“LUMA is working on a comprehensive LUMAscape for AI and Ad Tech. From our research it is clear that there are 3 categories of AI companies: 1) AI First, 2) Fast Adapters and 3) AI Poseurs. The examples provided are illustrative but we’d love to hear from those who can demonstrate they belong in category 1 or 2. Let the mayhem commence…”
LUMAscapes (ad tech industry landscapes) have defined the advertising technology industry for the totality of LUMA’s 15-year, investment banking existence.
See more on LinkedIn. (August 28)
From tipsheet: Saying you have AI in your ad tech is easy. Actually having it and being able to prove it is another. Mr. Kawaja is looking to thread this needle with a new, authoritative AI version of his world-famous LUMAscapes.
Related: “Inspired by Terence Kawaja’s post and now having reviewed 38 so-called ‘AI’ tools in the advertising and marketing space, I think they fall into five basic buckets…”” (August 29) – Goodway Group strategic advisor Jay Friedman on LinkedIn
LLMs & CHATBOTS
Developments
- Rise of AI shopping ‘agents’ set to transform ecommerce (August 31) – Financial Times
- Anthropic will start training its AI models on chat transcripts (August 28) – The Verge
- China’s social media platforms rush to abide by AI-generated content labelling law (September 1) – South China Morning Post
- Meta’s AI Leaders Discuss Using Google, OpenAI Models in Apps (August 29) – The Information (subscription)
BRANDS
CMO “stunned” by pace of AI adoption
In an interview with consultancy McKinsey, General Motors’ chief marketing officer, Norm de Greve, addressed AI’s rapidly growing impact in his marketing organization.
Mr. de Greve shared:
“I’m stunned by the pace of AI adoption, especially generative AI, which has far exceeded our expectations. We began the year with maybe one or two exploratory projects. Now, without any formal direction, we’re up to 20. It’s happening organically, everywhere, across the organization. Teams are applying AI across the full spectrum of marketing, from insights and copy testing to brief writing, creative development, media optimization, and measurement. What’s remarkable is how quickly each function is embracing it. The momentum is real, and it’s accelerating.
There are some clear drivers of this adoption rate. One is speed. People love that they can go so fast. I can get an insight immediately, such as seeing that something didn’t work, or what a segment really wants to hear. I can test my copy immediately, and I can see the creative testing. A second driver is the cost of adopting AI, which is just very low. And a third is curiosity. People are excited to develop what’s next. They’re motivated to try new things.”
De Greve also sees “Agentic AI” as a breakthrough for marketing with brief development and more.
Read about it on McKinsey & Co’s website. (August 21)
AGENCIES
Agencyland
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What Dentsu International’s potential sale could mean for agency models (August 29) – Marketing Interactive (Australia)
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WPP COO Andrew Scott to Depart at the End of the Year (August 29) – Adweek
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Ad Market Records First Decline In 22 Months In July (August 29) – MediaPost
SELL-SIDE
AI companies as media
In an interview with Wired reporter Fred Vogelstein, CEO Matthew Prince of content delivery network Cloudflare said he wants to save the web from “AI’s oligarchs.”
Here’s an excerpt from the transcript where Mr. Prince suggested that the big AI companies become media distribution hubs and dollars trickle down to the original content owners.
Fred Vogelstein: So the big tech companies and AI companies become the next generation of media conglomerates?
Matthew Prince: Yes. So you (a content owner) might, for a limited period of time, say, ‘Hey, OpenAI, you get this for the next week exclusively. Nobody else gets it.’ And OpenAI will advertise. You’ll go from that to the limited edition DVD release, to the streaming release, to HBO, and then eventually it will make its way to the Hallmark channel.
If the AI companies agreed to take some percentage in the same way that Netflix or Spotify takes some percentage of every subscriber dollar they get, they could then dedicate that money to making new original content or helping fund content from others.
It’s worked for the music industry. It’s worked for Hollywood. Why can’t we do the same thing for journalists?
Read more from Fred Vogelstein. (August 30)
TECH
First-party data & scraping
“Is your first-party data safe from AI scrapers?” This may be the question Amazon has been asking itself the past two months with its own advertising.
I invite you to follow along…
When Amazon stopped running its advertising in Google Shopping ad placements in late July, way down the list of concerns according to industry pundits was that Amazon might have seen a competitive AI gap it needed to close with Google. Perhaps, Google was scraping Amazon’s large ad campaigns on Google Shopping and possibly gathering AI training data from one of its biggest competitors? (my speculation)
On August 21, Modern Retail reported that, according to a LinkedIn user, Amazon was now adding bot blocking for “Meta, Google, Huawei, Mistral and others” in its robots.txt file. Read more.
More AI concerns?
Last week, on August 26, Amazon brought back ads to Google Shopping but with no US geo-targeted advertising according to Smarter Commerce.
With some of these “tea leaves” in mind, Mobile Dev Memo analyst Eric Seufert picked up part of the story with a post on LinkedIn:
“The fundamental flaw with ‘agentic commerce’ or ‘agentic advertising’ is that it violates the motivations of retail outlets to 1) control the customer relationship and 2) monetize their first-party data with advertising. Amazon and Shopify are blocking AI agents because they want to retain ownership of discovery…”
Read more of Mr. Seufert’s compelling argument on LinkedIn. (August 29)
From tipsheet: From here, very simply, there’s a new understanding of how first-party data can leak to web crawlers and, presumably, AI.
TECH
“AI is not strategic”
If you’re a search marketer and handing the targeting “keys” over to Google’s AI Max, Smarter Commerce’s Mike Ryan said his company’s data was telling him that Google’s AI Max may be creating an unnecessary and unprofitable turf war with a competitor.
He concluded in a post on LinkedIn:
“AI is awesome. It is fast. Cheap. Powerful. But, I’ve said it a million times before, AI is not strategic – not yet! Strategy includes saying ‘No’ to things, and that’s why, as advertisers, we are selective. We say ‘No’ to all kinds of traffic, often competitor traffic. Often Search Partner traffic. Own-brand traffic, etc.”
Mr. Ryan’s entire post is worth a read. Get it here. (August 28)
Related: “AI Max vs. Performance Max: What Google’s New Search Campaigns Mean for Advertisers” (May 20) – Mikki Sharp, Fusion92, on LinkedIn
TECH
Data points: Search, chatbots
Google fixes reduced crawling issue impacting some websites (August 28) – Search Engine Land
New survey: “Search is fragmenting and fast.” (August 29) – Adam Heitzman of SEO agency HigherVisibility on LinkedIn
- Google’s share of general information searches fell from 73% in February to 66.9% in August.
- ChatGPT usage tripled, growing from 4.1% to 12.5% in the same category.
- Daily AI tool usage more than doubled, increasing from 14% to 29.2%.
- 34.8% of respondents now report a shift in how they search, up from 27.7% in February.
Google: AI Max For Search Has No Conversion Minimums (August 29) – Search Engine Journal
PROMPT
How will the advertising agency pitch deck evolve with the help of AI in the next 5 years?
Response from Meta.ai:
The advertising agency pitch deck will undergo significant transformations with the help of AI in the next 5 years. Here’s what you can expect:
Key Evolutions:
- Automated Content Generation
- Personalization
- Data-Driven Storytelling
- Interactive and Immersive Experiences
- Real-Time Collaboration…
MORE
News
- REMAX Launches ‘Marketing as a Service’ Platform to Empower Real Estate Agent Affiliates and Strengthen Market Leadership (August 26) – press release
- Podcast: Will AI Companies Pay Publishers? (August 29) – AdExchanger Talks
- Opinion: “It’s not AI or Ads – it’s AI AND Ads” (August 26) – Aaron Goldman, CMO, Mediaocean on LinkedIn
- “AI is coming for our culture” (August 25) – The New Yorker
- How Google Is Preparing to Make Ad Tech Unit Independent (August 28) – Catherine Perloff discusses her article in The Information on LinkedIn