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The most surprising thing to me is that they're partnering with third parties to do this. Less secure, lower margins (more middlemen taking fees), harder to ac

The most surprising thing to me is that they're partnering with third parties to do this. Less secure, lower margins (more middlemen taking fees), harder to access, more likely to not work properly. I would expect all the meta execs they've hired to know better so maybe I'm missing something...

nine_zeros 6mo ago
[dead]
linkjuice4all 6mo ago
I guess OpenAI couldn't train AdManagerGPT to ignore the client (except when it's time to renew), suggest more ad spend, and turn off any of the features that let you control your budget.
strongpigeon 6mo ago
I agree with you, but IMO the details are too sparse here to figure out what's really happening. Still, it feels very dangerous to try to go the reseller route first as you lose a ton of control and become dependent on your partner to support all the feature you add yourself in a timely fashion.
- crowcroft 6mo ago
  It all seems a bit overly complicated to me. TikTok pretty much went straight to a self-serve platform and basically had immediate success. I would think if OpenAI did something similar there would be no shortage of advertisers wanting to spend money.
  - doctorpangloss 6mo ago
    on tiktok you are not paying for ad inventory, which on that platform sucks, you're paying $10m+ to tip the scales in the algorithm towards organic content about your brand
    - yunwal 6mo ago
      how is this different than what OpenAI is trying to do?
      - doctorpangloss 6mo ago
        we don't know i assume the 22 year olds working 16h days at openai sincerely think people pay for ads on tiktok, and shitty low converting ads is why tiktok makes tons of money, and they sincerely think the solution to their lack of knowledge is delegating their core business to a DSP no one has ever heard of
    - ahartmetz 6mo ago
      How much established truth, official and legal is that?
EA-3167 6mo ago
The missing part seems to be that they need infusions of money to keep this “business model” running a little longer. In this world if you want prompt money and lots of it, advertising is the way.
cjbgkagh 6mo ago
My guess is that three letter agencies will have access to this data and are requiring this partnership.
- crowcroft 6mo ago
  Three letter agencies are telling OpenAI to partner with a Toronto based ad platform?
  - cjbgkagh 6mo ago
    Ad networks / information brokers in general would be too sweet of a prize to pass up. It’s a weak link in the chain, if they’re not exploiting it they’re not doing their jobs. Being foreign data is a bonus.
pz 6mo ago
This approach makes a lot of sense. Advertising is a marketplace and this is a great way to bootstrap advertising inventory. Its inevitable they will allow advertisers to manage ad spend directly through OpenAI but right now the product is too new to capture meaningful ad budget. This way they can begin testing delivery and develop proof points around ROI and build towards larger ad spend directly.
- qotgalaxy 6mo ago
  [dead]
- crowcroft 6mo ago
  > product is too new to capture meaningful ad budget I disagree entirely. As someone who works in advertising every single company I've talked to would be queueing up to test ads on ChatGPT if they launched a Google Ads like platform. If ChatGPT doesn't have enough scale to do it, then they shouldn't do ads.
- arcticfox 6mo ago
  ChatGPT has more web traffic than X, Reddit, Bing... Crazy to say they wouldn't be able to capture meaningful ad budget. IMO partnering on this is a blunder.
  - ssl-3 6mo ago
    It comes together quickly, though. They don't need to learn how to become a company that knows how to sell advertising; they can instead just pay some other entity to do that. It's OK to not have complete vertical integration. (They probably don't fix their own toilets, either.) And if it makes as much money as it seems must be possible, then they can just buy one of the advertising partners that are already have plugged into their system and shitcan the rest.
- windexh8er 6mo ago
  Clearly the Meta execs they hired are about as useful as most 3-letter exec titles because, wow, did OAI miss the boat again. Personally I'm glad they've made as many missteps as they have, but quite the amateur move to not seize the market opportunity and keep it holistically for themselves. They took nothing from Google's paved road of incumbency in this segment. Again, personally, I'm glad at yet another miss by Altman. But to claim ChatGPT is too new? Apparently hundreds of millions of users doesn't cut it these days. And if anyone thinks OAI has been anything remotely "strategic" around their product, well... Then you must enjoy shooting darts in the dark.
dd82 6mo ago
why would you be surprised about this? its pretty obvious that execs give no fucks except for money.
fsckboy 6mo ago
>lower margins (more middlemen taking fees) middlemen taking fees is not the measure for comparison, the question is whether you could run your own ad business for your own platform and keep your costs lower than established players who sell on all platforms. the answer is generally "no" look how much money coca cola makes, and they sell it cheaper than water and still pay for advertising!! we should all make our own coke and not advertise it...
- crowcroft 6mo ago
  Established players aren't selling on all platforms. Any platform doing more than $1bn in ad revenue operated their own ad sales platform. The only players that sell through third parties are sub-scale publishers, and that is a shit business to be in. If that's what OpenAI is aiming for then they will never be able to compete with Google. I'm not really sure what you're analogy about Coke is meant to mean here...
- unfunco 6mo ago
  You're paying way too much for water.
deleted 6mo ago
[deleted]
moralestapia 6mo ago
It makes sense to me. You pay extra but you just plug in into a framework that already works. It's also easier to drop the potato if it gets hot.
- ehnto 6mo ago
  It's just surprising, since it's objectively better to own the platform, and the company has a mind boggling amount of money, and allegedly coding agents capable of 10xing developer output. Why would they not be able to do it in house? It shouldn't be a capacity or capability issue. That makes me think it's just another higher level money game, and there will be some weird investments in which neither company does anything of material value in exchange except spin some number wheels.
nopinsight 6mo ago
They probably want to select for high-quality ads without having to be responsible for filtering issues, whether false positive or false negative, which will adversely affect their reputation with consumers and advertisers. They probably wait until they have enough data/experience to do that properly.
coro_1 6mo ago
They're road mapping. Trying things out. Their entire current ad eco-system may change internally in a week.
nunez 6mo ago
They probably don't have the systems to do this themselves yet. They obviously will.
6thbit 6mo ago
I find it a good surprise. Signals they probably don't want to become an advertising company, which is what every other tech business ended up becoming. And that is not against having ads be a core revenue driver, like for companies in other sectors.

nine_zeros 6mo ago

[dead]

linkjuice4all 6mo ago

I guess OpenAI couldn't train AdManagerGPT to ignore the client (except when it's time to renew), suggest more ad spend, and turn off any of the features that let you control your budget.

strongpigeon 6mo ago

I agree with you, but IMO the details are too sparse here to figure out what's really happening. Still, it feels very dangerous to try to go the reseller route first as you lose a ton of control and become dependent on your partner to support all the feature you add yourself in a timely fashion.

crowcroft 6mo ago
It all seems a bit overly complicated to me. TikTok pretty much went straight to a self-serve platform and basically had immediate success. I would think if OpenAI did something similar there would be no shortage of advertisers wanting to spend money.
- doctorpangloss 6mo ago
  on tiktok you are not paying for ad inventory, which on that platform sucks, you're paying $10m+ to tip the scales in the algorithm towards organic content about your brand
  - yunwal 6mo ago
    how is this different than what OpenAI is trying to do?
    - doctorpangloss 6mo ago
      we don't know i assume the 22 year olds working 16h days at openai sincerely think people pay for ads on tiktok, and shitty low converting ads is why tiktok makes tons of money, and they sincerely think the solution to their lack of knowledge is delegating their core business to a DSP no one has ever heard of
  - ahartmetz 6mo ago
    How much established truth, official and legal is that?

EA-3167 6mo ago

The missing part seems to be that they need infusions of money to keep this “business model” running a little longer. In this world if you want prompt money and lots of it, advertising is the way.

cjbgkagh 6mo ago

My guess is that three letter agencies will have access to this data and are requiring this partnership.

crowcroft 6mo ago
Three letter agencies are telling OpenAI to partner with a Toronto based ad platform?
- cjbgkagh 6mo ago
  Ad networks / information brokers in general would be too sweet of a prize to pass up. It’s a weak link in the chain, if they’re not exploiting it they’re not doing their jobs. Being foreign data is a bonus.

pz 6mo ago

This approach makes a lot of sense. Advertising is a marketplace and this is a great way to bootstrap advertising inventory. Its inevitable they will allow advertisers to manage ad spend directly through OpenAI but right now the product is too new to capture meaningful ad budget. This way they can begin testing delivery and develop proof points around ROI and build towards larger ad spend directly.

qotgalaxy 6mo ago
[dead]
crowcroft 6mo ago
> product is too new to capture meaningful ad budget I disagree entirely. As someone who works in advertising every single company I've talked to would be queueing up to test ads on ChatGPT if they launched a Google Ads like platform. If ChatGPT doesn't have enough scale to do it, then they shouldn't do ads.
arcticfox 6mo ago
ChatGPT has more web traffic than X, Reddit, Bing... Crazy to say they wouldn't be able to capture meaningful ad budget. IMO partnering on this is a blunder.
- ssl-3 6mo ago
  It comes together quickly, though. They don't need to learn how to become a company that knows how to sell advertising; they can instead just pay some other entity to do that. It's OK to not have complete vertical integration. (They probably don't fix their own toilets, either.) And if it makes as much money as it seems must be possible, then they can just buy one of the advertising partners that are already have plugged into their system and shitcan the rest.
windexh8er 6mo ago
Clearly the Meta execs they hired are about as useful as most 3-letter exec titles because, wow, did OAI miss the boat again. Personally I'm glad they've made as many missteps as they have, but quite the amateur move to not seize the market opportunity and keep it holistically for themselves. They took nothing from Google's paved road of incumbency in this segment. Again, personally, I'm glad at yet another miss by Altman. But to claim ChatGPT is too new? Apparently hundreds of millions of users doesn't cut it these days. And if anyone thinks OAI has been anything remotely "strategic" around their product, well... Then you must enjoy shooting darts in the dark.

dd82 6mo ago

why would you be surprised about this? its pretty obvious that execs give no fucks except for money.

fsckboy 6mo ago

>lower margins (more middlemen taking fees) middlemen taking fees is not the measure for comparison, the question is whether you could run your own ad business for your own platform and keep your costs lower than established players who sell on all platforms. the answer is generally "no" look how much money coca cola makes, and they sell it cheaper than water and still pay for advertising!! we should all make our own coke and not advertise it...

crowcroft 6mo ago
Established players aren't selling on all platforms. Any platform doing more than $1bn in ad revenue operated their own ad sales platform. The only players that sell through third parties are sub-scale publishers, and that is a shit business to be in. If that's what OpenAI is aiming for then they will never be able to compete with Google. I'm not really sure what you're analogy about Coke is meant to mean here...
unfunco 6mo ago
You're paying way too much for water.

deleted 6mo ago

[deleted]

moralestapia 6mo ago

It makes sense to me. You pay extra but you just plug in into a framework that already works. It's also easier to drop the potato if it gets hot.

ehnto 6mo ago
It's just surprising, since it's objectively better to own the platform, and the company has a mind boggling amount of money, and allegedly coding agents capable of 10xing developer output. Why would they not be able to do it in house? It shouldn't be a capacity or capability issue. That makes me think it's just another higher level money game, and there will be some weird investments in which neither company does anything of material value in exchange except spin some number wheels.

nopinsight 6mo ago

They probably want to select for high-quality ads without having to be responsible for filtering issues, whether false positive or false negative, which will adversely affect their reputation with consumers and advertisers. They probably wait until they have enough data/experience to do that properly.

coro_1 6mo ago

They're road mapping. Trying things out. Their entire current ad eco-system may change internally in a week.

nunez 6mo ago

They probably don't have the systems to do this themselves yet. They obviously will.

6thbit 6mo ago

I find it a good surprise. Signals they probably don't want to become an advertising company, which is what every other tech business ended up becoming. And that is not against having ads be a core revenue driver, like for companies in other sectors.