[crowcroft]

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...

[pz]

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.

[windexh8er]

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.

[stingraycharles]

This appears to be more like a toxic rant than a reasonable argument.

> quite the amateur move to not seize the market opportunity and keep it holistically for themselves

What does this even mean? There are so many businesses, especially in the advertising world, that first start white-label reselling so that you can scale up super easy and quickly. Then once market is captured, you integrate everything. This is a common adtech playbook, and the Meta execs know that as well.

And I say this as someone who founded & exited their own adtech platform.

I would not recommend OpenAI to start developing an RTB platform right now at all. Just first prove there is a market and the value is there.

> They took nothing from Google's paved road of incumbency in this segment.

Google bought / acquired themselves into the online adtech market mostly. Yes they have adwords, which was only really becoming something a decade after Google launched, which they paired with their acquisition of half the adtech giants (DoubleClick, Invite and AdMeld). So yeah, not a great example.

> 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.

This is just a useless attack for no reason.

[windexh8er]

> This appears to be more like a toxic rant than a reasonable argument.

Thank you for your subjective analysis.

> What does this even mean? There are so many businesses, especially in the advertising world, that first start white-label reselling so that you can scale up super easy and quickly. Then once market is captured, you integrate everything. This is a common adtech playbook, and the Meta execs know that as well.

This would be interesting if any of it were true in the case of OAI. They haven't captured the market and they don't appear as if they will. They're at the losing end of Anthropic and Google right now. The Meta execs OAI has don't understand the game today, in my opinion based on their approach.

> And I say this as someone who founded & exited their own adtech platform. > I would not recommend OpenAI to start developing an RTB platform right now at all. Just first prove there is a market and the value is there.

So OAI, their financials, their business models, their number of customers and their competition all aligned with your exit in adtech? Somehow I doubt it, but feel free to share.

> Google bought / acquired themselves into the online adtech market mostly. Yes they have adwords, which was only really becoming something a decade after Google launched, which they paired with their acquisition of half the adtech giants (DoubleClick, Invite and AdMeld). So yeah, not a great example.

Actually, it is a good example. Because when Google did this they had zero competition. Now Google is the competition. So, yeah... In line with the new reality. You don't get to compare OAI with Google 20+ years ago.

> This is just a useless attack for no reason.

No, it's reality for a lot of us. Altman is tied to a lot of unsavory players. If you want to apologize for these types of people then feel free to be their cheerleader. The great part of HN is that these comments have and carry market sentiments (all across the board). I could say your comments are useless, out-of-touch, founder drivel... But I haven't.

[crowcroft]

> 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]

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]

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.

[fsckboy]

>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]

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]

You're paying way too much for water.

[nopinsight]

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.

[strongpigeon]

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]

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]

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

[ahartmetz]

How much established truth, official and legal is that?

[yunwal]

how is this different than what OpenAI is trying to do?

[doctorpangloss]

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

[linkjuice4all]

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.

[moralestapia]

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]

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.

[6thbit]

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.

[EA-3167]

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.

[coro_1]

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

[dd82]

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

[nunez]

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

[cjbgkagh]

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

[crowcroft]

Three letter agencies are telling OpenAI to partner with a Toronto based ad platform?

[cjbgkagh]

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.