The End of Advertising
The article highlights the decline of traditional advertising as AI rises, impacting content accessibility and revenue. Premium content may thrive, while new models must incentivize creators in a transactional landscape.
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The article discusses the impending decline of advertising as the primary funding model for the internet, driven by the rise of artificial intelligence (AI). While advertising has historically funded much of the online content we consume, the shift towards AI-driven services, such as ChatGPT, is changing how users access information. As users increasingly rely on AI for definitive answers and task execution, traditional ad-supported content may see a significant drop in attention and revenue. This shift could lead to a greater divide in content accessibility, with premium content becoming more valuable and commoditized content struggling to survive without ad revenue. New advertising models may emerge, but they will need to incentivize content creators to continue producing material. The relationship between consumers and content providers is expected to become more direct and transactional, marking a departure from the perceived "free" internet of the past. Ultimately, the article suggests that while the landscape of online content will evolve, high-quality content will continue to find ways to reach audiences.
- The traditional advertising model that funds much of the internet is declining due to the rise of AI.
- Users are increasingly turning to AI for information, reducing their engagement with ad-supported content.
- Premium content may thrive, while commoditized content could struggle without ad revenue.
- New advertising models will need to incentivize content creators to adapt to changing dynamics.
- The relationship between consumers and content providers is shifting towards a more transactional nature.
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8 commentsI disagree. They’ve already figured out their business model: taking VC money, giving it to Nvidia, and coming back for more money.
The author mentions users have a revealed preference for ads. This is obviously not true otherwise Adblock wouldn’t exist. Users have a revealed preference for free things. Similarly, companies have a revealed preference for free money.
It’s notable that the successful companies the author mentions (Apple, Amazon, Netflix, Google, Meta) all figured out their business models a long time ago.
One example: someone asks about historical multicultural cities, and one was Cordoba during the Muslim rule, and this would be an opportunity for advertisement for holidays in Spain and the user gets the answer: "By the way, did you know you can travel there and see the mosques from that time? See here for a possible travel offer"
I think paid social ads will be less affected by AI than search ads. After all, AI is unlikely to replace human social interactions. That's a good thing. Paid social ads have a much higher incrementality compared to search.
Search ads in comparison are often just the "Google tax".
In my personal life, I've replaced 80% of my previous searches with quick ChatGPT 4 prompts. It gives better answers, faster.
I wouldn't mind quite so much if the advertising was at least interesting and creative. Most of it is just the same regurgitated crapola.
I see AI consistently eliminating rational judgments from middle management seat fillers…MDs and scientists inclusive.
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