OpenAI or Google: who will control advertising in the age of AI?

Both OpenAI and Google are making moves to lead advertising in the age of AI, but in this (unequal) battle, the latter company has the advantage.

Last week, ads officially arrived on ChatGPT. For the past few days, users who access OpenAI’s AI chatbot for free (or pay for the «low-cost» ChatGPT Go plan) have been bombarded with advertising messages in the United States.

Even though OpenAI has repeatedly assured users that ChatGPT’s responses will not be influenced by advertising in any way, its rival Anthropic suggested otherwise in a controversial commercial released just days ago during the Super Bowl commercial breaks, with the tagline «Ads are coming to AI. But not to Claude.»

OpenAI has labeled Anthropic’s ad «dishonest» (in which advertising clearly influences ChatGPT’s responses). At the same time, it has emphasized that on ChatGPT, commercial messages will be clearly labeled as «sponsored messages.» Furthermore, advertisers will never have access to the user’s conversations, history, or personal data on ChatGPT, OpenAI asserts.

According to the company led by Sam Alman, the matching process, designed to show users relevant ads, will always be conducted while keeping the user’s personal data secure. ChatGPT could, for example, display ads for cookbooks and delivery services to those who search for snacks (ensuring that the advertising is always relevant).

OpenAI is going all in on the advertising market.

In a recent interview on the ACCESS podcast, Fidji Simo, CEO of Applications at OpenAI, emphasized that ChatGPT is a premium channel that advertisers can leverage during periods of high purchase intent. This premium channel is by no means cheap, however, as brands advertising on ChatGPT must pay a CPM of $60 (an exceptionally high figure in the digital advertising industry) and simultaneously invest a minimum of $200,000 to have a presence on this platform.

To make it easier for SMEs to eventually advertise on ChatGPT, OpenAI could offer brands the ability to manage campaigns on this platform in a conversational way in the future, says Asad Awan, Monetization Manager at OpenAI. In this way, advertisers would simply name the product and their target audience, and ChatGPT would help them automatically generate their campaigns.

OpenAI has high hopes for advertising on ChatGPT and expects its advertising revenue to reach $50 billion by 2030 (a figure that, if the company truly wants to achieve it, will necessarily require a large number of advertisers).

Meanwhile, Google doesn’t have to contend with the financial pressure that OpenAI currently faces, a startup that is still far from achieving the desired profitability. Even so, the internet giant is already making changes to its advertising ecosystem to adapt to the new era of AI (largely because its famous search engine is increasingly transforming into an «answer engine»).

According to Vidhya Srinivasan, VP/GM, Advertising & Commerce at Google, in the new era of AI, the Alphabet subsidiary wants the advertising on its platforms to get increasingly closer to the point of sale. For this reason, Google is currently experimenting with a new advertising format in its «AI Mode» that connects the user with those retailers that have the product recommended by the famous search engine in stock.

Google enjoys a much more comfortable position in the advertising market.

Before committing to this format, Google had already introduced «Direct Offers,» which allows users to benefit from discounts through codes embedded directly in AI-generated responses, valid only for a limited time. A few months ago, the company also launched an option in Google’s «AI Mode» in the United States that allows users to complete purchases directly within the search engine’s conversational interface.

Currently, users must complete purchases themselves in AI environments. However, in the medium term, Google’s goal is for AI agents to make purchases independently on behalf of the user. To achieve this, Google recently introduced the «Universal Commerce Protocol.»

However, before users can truly delegate their purchases to AI agents, these agents need to be able to navigate the web more easily and perform actions there. And this isn’t easy (at least not yet) because website interfaces are designed for human users, not AI agents. Google is trying to address this problem by introducing the WebMCP protocol in the Chrome browser. This protocol allows website operators to specify where and how AI agents can interact on their pages, enabling them to perform tasks autonomously and seamlessly.

Both OpenAI and Google are making moves to lead advertising in the age of AI, but it seems that in this (inevitably unequal) battle, the latter has a head start, having comfortably held the top spot in online advertising for years.

Source: www.marketingdirecto.com