ChatGPT went from 0 to 100M users with zero ads, then immediately launched paid tiers. But watch what happens next. They'll introduce "sponsored responses" or "featured GPTs" because free AI compute isn't sustainable. The ad model always wins because users want free and companies need revenue.
Great overview, very well put together! Indeed it will be interesting to understand how the trials but also how the reinforcement of regulations across jurisdictions like data privacy, data residency and data sovereignty may affect ads revenue; but also how new GenAI players like OpenAI, Perplexity, Anthropic affects search ads revenue for Google and beyond …? Thanks!
Excellent stuff. Looking forward to the next two parts..
My short version on advertising has been that, it has been present ever since there has been trade.
If there is seller and a buyer, there is always room to subsidize the trade by sponsoring some or all of the the trade.
But I think I realise from you, we can then differentiate advertising from mass advertising (at scale) and mass advertising probably starts from newspapers.
- Newspapers
- Radio
- TV
- And then internet.
And now as the world evolves with the new platform shift of AI. We will some very interesting sweeping scenarios of what advertising will look like in the coming years.
You have covered the framework and mental models very well. Thank you.
The Google and Facebook antitrust trials are fairly serious for the future of advertising.
BigTech always appeal antitrust regulation verdicts, delaying the process for years.
Brilliant write up Eric 👏 My Readers will love this ⭐
ChatGPT went from 0 to 100M users with zero ads, then immediately launched paid tiers. But watch what happens next. They'll introduce "sponsored responses" or "featured GPTs" because free AI compute isn't sustainable. The ad model always wins because users want free and companies need revenue.
💯.. every network at scale is an Ad network. Wait for the same with Substack..
Great overview, very well put together! Indeed it will be interesting to understand how the trials but also how the reinforcement of regulations across jurisdictions like data privacy, data residency and data sovereignty may affect ads revenue; but also how new GenAI players like OpenAI, Perplexity, Anthropic affects search ads revenue for Google and beyond …? Thanks!
Excellent stuff. Looking forward to the next two parts..
My short version on advertising has been that, it has been present ever since there has been trade.
If there is seller and a buyer, there is always room to subsidize the trade by sponsoring some or all of the the trade.
But I think I realise from you, we can then differentiate advertising from mass advertising (at scale) and mass advertising probably starts from newspapers.
- Newspapers
- Radio
- TV
- And then internet.
And now as the world evolves with the new platform shift of AI. We will some very interesting sweeping scenarios of what advertising will look like in the coming years.
You have covered the framework and mental models very well. Thank you.