Advertising set to grow among AI firms, says Criteo chief

LISBON: Michael Komasinski, the chief executive of online advertising agency Criteo, predicts that numerous AI platforms will eventually embrace advertising, according to AFP. In an interview at the Web Summit, Komasinski, who works with OpenAI in 89 countries to create advertising campaigns on AI chatbots, emphasized that advertising is the most scalable business model, having funded the growth of major platforms like Google, Meta, and Snapchat.

He further explained that advertising formats are becoming increasingly engaging, inventive, and more fitting for the conversational experience. Pressure to generate revenue to cover OpenAI's substantial expenses led the company to commence testing advertising in ChatGPT in February, initially limited to free and low-cost subscription tiers, before progressively extending it worldwide with the assistance of Criteo.

Conversely, Anthropic, another AI competitor planning a stock listing soon, has no plans to incorporate advertising in its AI tools due to data privacy worries and user protection concerns. Microsoft has been utilizing ads in its public version of Copilot AI since 2023, while Perplexity has been trialing ads in the US since 2024.

Google is contemplating integrating ads in its Gemini AI. The surge in AI-related stocks, which has propelled markets this year, has instilled confidence among investors, but equity and bond investors have recently become more cautious as inflation and high interest rates are escalating the costs of developing and deploying AI models.

Komasinski, who stated that around 3,600 brands have experimented with AI advertising campaigns and observed a slight uptick in their spending on ChatGPT, expressed skepticism about AI agents autonomously making purchases, noting that while it's simple to order trivial items, critical decisions should not be delegated to bots.