What Will The Ads Look Like in AI Apps?
I’ve written a long-ish post attempting to answer that question?over at P&G’s Signal360 publication, please head there (and sign up for their newsletter!) if you’d like to read the whole thing. Below is a teaser for those of you who aren’t sure you want to click the link (so few of us do these days!).?
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It’s rare that the marketing industry has a chance to ask such a blank-canvas question, but the rapid acceptance of AI-driven chat experiences like?ChatGPT?presents just such an opportunity. And with both Microsoft and Google planning to?launch at-scale versions of the technology?in coming months, it’s a question every marketer should be pondering.
Innovations in the media business regularly pair with the emergence of new technologies – radio in the 1920s, network television in the 1950s, the world wide web in the 1990s, social media in the early part of this century. But while new media formats drive new ad formats, the most powerful and disruptive shifts in the media business are driven by rare, complicated and interconnected technological forces that build over decades, then break out in what feels like an instant.
“Generative artificial intelligence” – ChatGPT and its kin – is having such a moment. Over the past 30 years, I can think of just one similar disruption: Search. That gave us Google, the largest media company in history. More than a trillion dollars in market cap later, search remains the world’s most powerful digital marketing channel.
Search not only augured a fundamentally new interface to knowledge, it also upended decades of advertising norms. Instead of paying by impression, you paid for an action taken by a prospective customer – a click. Search allowed for unprecedented targeting, unprecedented experimentation, and unprecedented results. Within a decade, every marketer – from the smallest retailer to the largest consumer packaged goods company – became a search marketer.
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So what role might marketers play in the generative AI revolution?
More than likely, they’ll help pay for it. When Google launched its eponymous search engine back in 1998, no one could have predicted that a highly disruptive, multi-hundred-billion dollar market would emerge from an ad unit built on the back of the humble blue link. Two years and ten billion queries later, Google struck gold with AdWords.
OpenAI’s ChatGPT is following an eerily similar trajectory. Launched just five months ago, it’s quickly amassed?more than 100 million users?and a torrent of punditry claiming that the “conversational interface” is the future of, well,?everything.
This puts Google in a classic “innovator’s dilemma.” The company must protect its market share, but it’s facing a disruptive technology that it helped create (Google invented the “T” in “ChatGPT”). Google must thread the needle of its legacy cash cow – AdWords – with whatever product emerges from AI-driven search. So far?Google’s announced Bard, an upcoming (and for now, experimental) chatbot similar to ChatGPT. As I’ve?written before, it will be difficult for Google to disrupt itself, but if any company is well positioned to succeed, it’s the company that helped invent AI and brought modern search to billions of people.
Over the course of the past few weeks I’ve spoken to search and marketing executives, deep thinkers in tech and media, and leaders at Google and Microsoft. Our conversations all started with “What will the ads look like?” And while their answers aren’t definitive, some patterns certainly emerged.