Home Daily News Roundup Google AdSense Changes Publisher Payouts; The Costs (And Gains) Of Generative AI

Google AdSense Changes Publisher Payouts; The Costs (And Gains) Of Generative AI

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Making An Impression

Starting early next year, Google AdSense publishers will see their payouts switch from a per click metric to per impression, the first change to its revenue sharing model in 20 years. 

Paying per impression is the industry standard for how publishers are paid, writes Google VP of Global Ads Dan Taylor in a blog post. And Google estimates publishers will maintain the same percentage share of every ad dollar spent with Google – which is to say, about 68%. A Google Ads buyer would typically see about 15 cents go to the Google DSP, and the AdSense network would take a 20% fee on the remainder, leaving 68 cents.

When a third-party DSP or ad-buying system is used, the publisher will keep 80% of the revenue after the third-party tech gets its cut. Depending on the fee the DSP charges, the advertiser could end up with more or less than 68 cents on the dollar.

Advertisers, though, have no change in their buying model. They will still bid and pay based on clicks and conversions, and it’s up to Google to make sure it makes its fee in that switch from CPA to CPM.

Big Tech’s AI Ouroboros

Big Tech invested big bucks into generative AI. And it’s seeing a return on investment in the form of cloud computing fees, The Wall Street Journal reports.

Since 2019, Microsoft has pumped $13 billion into OpenAI, creator of ChatGPT and DALL-E. In exchange, OpenAI exclusively uses Microsoft Azure’s servers to train and release its products. Azure’s revenue grew by 29% from last year (3% coming from AI), per Microsoft’s earnings last week.

Meanwhile, Google invested $2 billion in OpenAI competitor Anthropic, which committed to spending $3 billion on Google Cloud. Amazon also invested $4 billion in Anthropic, which is spending at least $4 billion on AWS over five years.

Generative AI companies are currently unprofitable. But, as adoption increases, businesses and user accounts must pay more for data consumption. 

So, even if the AI companies aren’t profitable, they are profitable to Amazon, Google and Microsoft. Plus, the exclusive agreements provide insights into software and strategy best suited for generative AI.

Meta’s open-source gen AI product is free. Kind of. Meta doesn’t make anything, sure, but the costs get paid to whichever cloud platform the client is using. 

So who wins? The cloud operators yet again.

Just Shopping Around

Last week, Shopify continued its reluctant foray into product discovery and recommendation with the quiet rollout of an online marketplace where shoppers can peruse listings from merchants using a chatbot search service.

Previously, that function was only available in the Shopify app Shop.  

The marketplace doesn’t have sponsored listings and doesn’t have the product depth to match Amazon. But as adoption increases, it will invariably put Shopify in the uncomfortable position of favoring certain sellers or items. 

“These are some of the retailing decisions Shopify didn’t have to make so far by being a neutral software provider,” writes Marketplace Pulse Founder and CEO Juozas Kaziukėnas in a blog post.

Shopify’s marketplace is buried as a sub-menu of the Shop.app URL. Which is to say, Shopify isn’t exactly shouting about it. 

“Arm the rebels” has been a rallying cry for Shopify, writes Kaziukėnas. But, at some point, it must cross the retail Rubicon. Some rebels will start getting much better arms than others.

Shopify will make decisions to promote certain merchants and products by merit. But also, probably, in part because some will pay for heavier weapons. 

But Wait, There’s More!

The FTC’s Lina Khan defends record of crackdowns on unlawful mergers. [Bloomberg]

Google uses public safety argument to deflect competition criticisms. [Digiday]

Confessions of a social media manager tasked with clapping back at online critics through burner accounts. [Digiday]

Advertising, PR and related jobs reached an all-time high in October, per Labor Bureau figures. [Ad Age]

Hulu’s book-to-series titles are getting a boost from Barnes & Noble. [Marketing Brew]

You’re Hired!

SmartFrame Technologies appoints Alan Capel as chief commercial officer. [Adweek]

Recurrent Ventures names Andrew Perlman as CEO – its third in three years. [Adweek

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