Don't underestimate advertising. Noone pays for Facebook or Google search. Yet the ad business with a couple billion users seems profitable enough to fund frontier LLM research and inference infrastructure as a side-gig in these companies. Google only rushed out AI overview because they saw ChatGPT eating their market share in information retrieval and Zuck is literally panicking about the fact that users share more personal details with OpenAI than on his doomscrolling attention sinks.
OpenAI is talking out of their ass with their advertising plans. Meta and Google are an advertising duopoly, extremely anti-competitive, and basically defrauding their own customers. OpenAI can't just replicate that.
Worse still is that OpenAI has no competitive edge. All the hype around their advertising plans is based on the idea that they can blend the ads right into the response, a turbocharged version of Native Advertising.
This is explicitly illegal. Very explicitly.
The US' FTC may have been declawed by the current US government, but the rest of the west will nuke them from orbit over it. Doubtless OpenAI will try some stunt alike marking the entire LLM response as "this is an ad", but that won't satisfy the regulators.
This only gets worse with further problems. An LLM hallucinating product features is going to invoke regulator wrath as well, and an LLM deciding to cut off the adcopy early will invoke the wrath of the advertiser.
> Yet the ad business with a couple billion users seems profitable enough to fund frontier LLM research and inference infrastructure as a side-gig in these companies
Also important: Not anymore. The tech giants are now issuing quite a lot of debt to pay for the AI plans.
Is it really any different than product placement in TV shows/movies?
You sure are. And it sounds like you are also underestimating the effect yourself as well. In fact this perception is so common that there is even a name for it in psychology: Third-person effect. Many people believe that advertising does not affect them. But ironically, the more you believe so, the more likely you are to fall victim to particular types of advertising. And in general your response to ads will be very similar to everyone else's. These "annoying" ads that you "would never click on" are just badly personalized or badly placed ads. That's the only type that gets stuck in your mind when you think of ads, based on your personal biases. But the major tech companies have spent the last one-and-a-half decades on perfecting the psychology of advertising. You might think you are immune, but you are certainly not. Every buying decision you have made in the last 10 years was almost certainly influenced to some degree. Just not always consciously. And I'm willing to bet that a lot of buying decisions were already heavily influenced by ChatGPT, even before their shopping feature. OpenAI just didn't profit on them as much as they could.
And I actually have tried to use ChatGPT to buy something. I have asked it to search for specific items from EU stores so I wouldn't need to pay import taxes, but usually it fails. It either suggests Global stores which ship from US or China or it suggests different products than what I asked for.
If ChatGPT or whatever LLM I was using could actually link me the products I wanted without me searching for them they should get a commission for sure, but we sure aren't there yet.
They are, guaranteed. Sponsored content is also just another kind of ad. This stuff doesn't appear randomly in your field of view, it was placed there. Let me give you a more general, easily comprehensible scenario: You walk into a store. I'm willing to bet you'll recognise many brands in that store - even ones you never bought anything from. But these brand names and all their associations are still in your head. And they are not there by accident. They were placed there intentionally. If for example you believe Apple iMacs are overpriced luxury items that people use who are more artsy show-offs than real tech go-getters, that brand recognition has been carefully placed in your mind (and the minds of millions others). So if one day, say, you switch to a more artsy profession with close customer contact that needs to convey money and success, that brand recognition will likely pay off. Every relevant brand does that and every ad agency works full time to make sure you see it. If you think you're immune, you're probably particularly easy prey, because you can't even imagine in how many scenarios they influence you. And ChatGPT is one hell of an influence potential.
But millions, and millions, and millions of people do. Certainly enough that I provide consulting services for a number of businesses for whom the majority of their revenue comes 95+% from ad-clicks. It's been that way 10-15 years and there have been ups and downs, but at the end of the day, the adspend has always been fruitful.
Whilst I sat around with fellow technical people all patting themselves on the back telling themselves and anyone who will listen "ads dont work" the people I consult too have become multi-millionaires with little more than double digit hosting costs and a few ads accounts.
This seems to be a continual blind spot for a lot of techincal people who really seem to struggle to grasp that not everybody thinks or acts the same way they do.
However, I believe an ad it still influences you subconsciously as long as it is in your sight line.
I wouldn't be surprised if there is a lot of investigation into subtly slipping advertising in the LLM responses the way Korean dramas have product placement right in the storyline (Subway, bbq chicken, beverages, makeup, etc).
Of course stuff in the world influences me, I am still a human. Still I have never clicked an ad and bought something. I simply don't get who would. Same as with the super market placing candy and stuff next to the cashier to get people to buy more, I have never been swayed by those because when I go to the store I am always on a mission and know before hand what I am buying.
It would be cool to see all the times I have been influenced into buying something because of subconscious advertisement, but that's kind a impossible so all I can do is deny it and of course all marketing people will say that I am wrong.
And we can argue forever what counts as an advertisement. For example I recently bought a new mouse pad, I wasn't particularly looking for a specific one, just something fun and bright and as I was browsing a web store they had a cool design for half off and I bought it. Maybe that was targeted advertisement, but I had already made the decision to buy a new mousepad and had been browsing on and off for few weeks, so was it really? I would argue not.
You can't click on the budweiser logo when watching super bowl ad. But if you sit in your chatgpt window all day then it's probably worth it for advertisers to expect to build familiarity with brands they advertise.
Advertising is one of the biggest markets on the planet. Meta is nearly a $2T company and is making record profits.
