ChatGPT Ads Will Change Everything | Matt Britton on Schwab Network

And we welcome in our next guest, that's Matt Britton. He's an AI and consumer trend expert as well as the author of Generation AI. Matt, good to speak with you. Hope you're having a nice Wednesday afternoon. This new ad model, Chad GPT is leaning into Is this a big time thing?

It's a huge thing. I think it's a harbinger of things that come. I think if you look back at when Facebook went public, right, they spent a lot of resources re ipo, gathering an audience, tying into the network effect. But then once they went public, the street had demands and they turned on ads and it really changed the marketing and advertising industry. And right now, you know, Metta along with Alphabet really have a bit of a duopoly in the advertising space. And that's all about the change. You know, if you think of the last 25 years, it was consumers finding out about things largely on better and Alphabet properties. And then when they were in the consideration phase, they would go to Google the search search and learn more and then they would purchase on Amazon. And now you have these AI chat bots that really have the ability to take consumers down the entire funnel.

Okay, so Matt, my first wonder then is are we heading to a place where this may be AI, let's call it 1.0, but I know it's probably not really. That is going to turn into a pay for play type of situation. Kind of like we've seen the traditional search market. You know, you go on Google, you type something in, the first few things are sponsored. And is that where some of these AI chat bots are headed? You know, if you give them enough money, they're going to suggest you more often.

Well, here's the biggest difference is consumers are already paying for tools like chat, CBT and cloud. Consumers have never paid for Google. Right. So the fact that these AI chat bots already have a paid user base really means that they can have a little bit more of a balanced approach to pushing advertising because it's not their only revenue stream.

That's a good, that's a good point. And so like I guess most things though, is the general trend towards these things to see it become a little bit more ubiquitous, a little bit more commoditized and maybe those initial fees for access to OpenAI's ChatGPT or another slowly but surely erode or are we not there yet?

So I think the way you're going to end it hasn't been announced yet in terms of how advertisers are going to be able to access this platform. And I know that Alphabet, which Gemini product, is going to probably launch something similar, but it's likely going to be a programmatic platform out of the gate, meaning it's going to be essentially an exchange where you're going to be bidding based upon cost per thousand impressions. And obviously you're going to be able to hyper target. But I don't think you're going to see a traditional ad sales model like television, for example, out of the gate that, you know, OpenAI My experience in working with them is the company has grown so much faster than their ability to actually service customers that I think they're going to have to automate this and have a programmatic platform in terms of of how the ads are bought on the platform.

Okay, so with that in mind, then, if you're a brand who's trying to take advantage of the latest place to be, how do you respond as those marketing teams, or if you're an individual entrepreneur, you know, maybe selling stuff on Instagram, how do you get involved here?

Well, the first thing I'm advising clients to do is something called AEO or Answer Engine Optimization, which is the AI version of SEO, which was Search Engine Optimization, which is it's a lot easier to have these AI chat bots recommend your brand, namely pay to get into the conversation. And to do that you need the right content, you need specificity in content, and you need to make sure you understand the conversations where you're likely to pop up and going down. That approach will enable you to understand what's working, the type of conversation that consumers are more likely and prone to convert to your brand from having. And then those are the type of ads that you want to run. But we're moving from an era of interrupting, which is more of a traditional advertising model, to assisting. This is the shift. It's from selling at consumers to helping with consumers in AI environments. The most effective ads feel like recommendations and not promotions.

Okay, well that ties into my next question was how do, what do consumers expect in this? If it goes the way that you're sort of suggesting, and it sounds like it's just a really personalized experience, which sounds like a win, right, for consumers.

Yeah, I mean, some of the early screenshots that have leaked out show the normal chatbots experience and then just simply a box at the bottom which has recommended options. And I think as long as that's the case and doesn't detract from the value and tremendous utility that Chat, GPT and others currently provide to consumers. I think consumers are going to be fine for it. At the moment we hit a point like you alluded to earlier where you know these models and ChatGPT for example is prioritizing advertising revenue over the consumer experience and you're seeing just a bunch of paid links. Well then I think it changes things but I do not expect that to happen especially given the fact that again have such a large built in installed base of paid users.

At least we're not there yet so at least the rollout seems like it's going to be something that's quite different and maybe from consumers. So hey Matt I really they're not.

Publicly traded yet when they get publicly traded and they have pressure from the street to drive around news that might change.

All right well we got a little bit of time but we'll see what happens Matt. We'll have you back soon. Matt Britton always a pleasure author of Generation AI It.