AI Is Going to Revolutionize Advertising in the Worst Imaginable Way

"OpenAI says it will insulate ads as ostensibly independent from content: 'Ads do not influence the answers ChatGPT gives you. Answers are optimized based on what's most helpful to you. Ads are always separate and clearly labeled. We keep your conversations with ChatGPT private from advertisers, and we never sell your data to advertisers.' However, this leaves substantial marketing revenue untapped, and OpenAI appears financially dependent on advertising income."

"The history of social media foretells the future: 'Platforms and their creators, once unspoiled by corporate backers, now pitch us relentlessly-and in increasingly devious ways. Native ads on Instagram and TikTok often look indistinguishable within the content, forming the basis of the $30 billion influencer industry. But the notion of placing an energy drink in the background of an influencer's video will soon seem laughably conspicuous.'"

"The real profitability emerges when advertising becomes invisible: 'By that point, the problem for ChatGPT users will no longer be that they notice and get annoyed with ads. The problem-and the real money to be made by OpenAI-will be when they don't.'"

OpenAI claims its ChatGPT advertisements will remain separate, clearly labeled, and unable to influence search results or access user data. However, the company faces significant financial pressure to monetize its platform, creating skepticism about these assurances. Competitor Anthropic mocked ChatGPT's advertising approach in a Super Bowl commercial, yet all AI platforms will likely adopt similar strategies due to infrastructure costs. Historical precedent from social media demonstrates that platforms initially free from corporate influence eventually become saturated with advertising. Native ads on Instagram and TikTok evolved into increasingly subtle sponsored content, generating a $30 billion influencer industry. ChatGPT advertising will follow this trajectory, with the most profitable scenario occurring when users no longer notice or question the ads.

Read at The New Republic