The LLM CPM
OpenAI maaaay be opening up to the idea of serving ads. Someday. Perhaps.
CEO Sam Altman is coming around to the idea, according to someone with knowledge of the matter, reports the Financial Times in a story following up on a Q&A with OpenAI CFO Sarah Friar.
“I don’t preclude [ads],” Friar says. “But for now there’s lots of low hanging fruit in the way we are doing things.”
This is ironic because ads are the low-hanging fruit. Nothing is easier, nor as sickly sweet.
It is also, long term, the only viable way for OpenAI to live up to its $150 billion valuation. Its current revenue includes charging monthly fees for subscription access in addition to a low-margin business offering access to its APIs.
Friar pointed to hires like Kevin Weil, OpenAI’s product chief and former ads product leader at Instagram. In May, OpenAI hired Shivakumar Venkataraman, previously the GM of Google Search.
And it isn’t just about experience with ads revenue growth. They also understand the trade-offs, Friar says: An ad business is vulnerable to swings in economic cycles and brings a new incentive to please advertisers, rather than focusing exclusively on users.
Not Kidding Around
Television for toddlers is quietly powering streaming media ratings, not to mention retail.
A New York Times profile of Rachel Accurso, who parents might know as “Ms. Rachel” of the eponymous hit YouTube account, details her ascent from earning a living on YouTube ads to making a killing on CTV and, now, season-leading book and toy lines.
Casual viewers might think of Disney princesses, Pixar, Star Wars and the Marvelverse when they think of Disney+, but the streamer’s ratings engine is Bluey, an animated kids show out of Australia.
These shows, and others like CoComelon and Peppa Pig, are consistent streaming and YouTube chart-toppers. Mary Ellen Coe, YouTube’s chief business officer, described some Ms. Rachel videos as being in “rarefied air” of posts with more than one billion views aside from music videos.
One advantage for kids shows, as with YouTube’s CTV music video ads, is that they’re replayed endlessly by viewers, which is to say parents.
These entertainers are also adept at the socials and can flit between doing their schtick for kids and targeting parents.
“I always joke to my husband that YouTube Ms. Rachel is for kids but TikTok Ms. Rachel is for moms,” one such mom tells the Times.
Content For Malcontents
Malicious online advertising download scams and viruses, also known as “malvertising,” has been an integral part of the typical black hat toolkit for years.
But as Wired reports, it’s growing at an accelerated pace, particularly for search result pages.
Scammers use search ads to hook victims, launch phishing attacks and even distribute malware – like cryptojackers, which surreptitiously use victims’ computers to mine bitcoin, and infostealers, which lift login and financial information but don’t take action, so are harder to spot.
What’s more, a platform like Google struggles with the sheer volume of malvertising content, not to mention the constantly changing tactics scammers use to get ahead of moderation efforts. The company reportedly blocked over 5 billion ads and almost 13 million accounts in 2023, and yet malvertising still grew.
Honest advertisers should be concerned, and not just because malicious ads take up valuable digital space. After all, if any ad could lead to malware, what’s the incentive for consumers to click on any?
But Wait! There’s More!
Publishers are reporting three times higher engagement rates on Bluesky compared to other social platforms that demote posts with outbound links. [Search Engine Journal]
Knowledge workers in India, China and Mexico use generative AI more than anyone else in the world. [Fortune]
Amazon Web Services is opening up physical kiosks where customers can upload their data. [TechCrunch]
Canada’s Competition Bureau sues Google’s ads business for alleged anticompetitive conduct, seeking to order Google to sell off its ad server and ad exchange. [AP]
In other Canadian legal news, a coalition of major Canadian publishers is suing OpenAI, alleging copyright infringement. [NYT]
You’re Hired!
Penske Media’s Sportico names Tony Haskel as CRO. [release]
