Advertising in AI Are Older Than You'd Think

This podcast episode discusses the burgeoning field of advertising within AI Large Language Models (LLMs). The speaker analyzes eMarketer's projection of $29 billion in search advertising revenue within AI in five years, arguing that this isn't as far-fetched as it seems due to existing examples like Microsoft's sponsored links in Bing Chat and Amazon's sponsored product ads in Rufus Responses. The speaker highlights the performance of these ads, comparing them favorably to traditional search ads, and notes the different approaches various platforms are taking. Concerns are raised about the potential impact on retail media advertising as consumers increasingly conduct research and make purchases directly through LLMs, reducing reliance on retailer websites. The episode concludes by emphasizing the importance of retailers adapting to this shift by optimizing their systems for AI agents and focusing on loyalty programs to maintain a competitive edge. The speaker also mentions the emergence of innovative ad formats, such as showroom ads and dynamic ad generation, further highlighting the rapid evolution of this space.