Advertising set to grow among AI firms, says Criteo chief

LISBON: Michael Komasinski, chief executive of online advertising agency Criteo, has expressed optimism that many AI platforms will eventually adopt advertising models, as investors grapple with the profitability of the technology. Speaking at the Web Summit in Lisbon, Komasinski stated that advertising is the most scalable business model in the world, having funded the growth of major platforms like Google, Meta, and Snapchat.

He added that ad formats will continue to evolve, becoming more innovative and tailored to conversational experiences.

OpenAI, the creator of ChatGPT, began testing advertising in the AI chatbot in February in the US for free and low-cost tier subscriptions. Since then, the company has gradually expanded its advertising efforts globally in collaboration with Criteo. In contrast, Anthropic, another AI rival set to go public, does not plan to integrate advertising in its AI tools due to data protection concerns and user interests.

Microsoft has incorporated ads in its public version of Copilot AI since 2023, while Perplexity has experimented with ads in the US since 2024. Google is also exploring the integration of ads in its Gemini AI model. The significant investments required to develop and deploy AI models have fueled investor enthusiasm but have also made the endeavor more expensive, leading to increased skepticism among equity and bond investors.

Criteo operates with OpenAI in 89 countries to develop advertising campaigns on AI chatbots. Komasinski noted that around 3,600 brands have already tested AI advertising campaigns, observing a modest uptick in spending on ChatGPT. However, he expressed doubt about AI agents autonomously making purchases, stating that while it's simple to order unimportant items, critical decisions should not be delegated to bots.