Shifting Sands: collaborative experimentation in the age of ai

Joe Jackson (0:00)

Hello, and welcome to The IAB UK Ad Tech Podcast. Today, Sands, our usual host.

Alex Kozloff (0:05)

He's got the flu, Pat's got the flu, so it's just you and me, Joe.

Joe Jackson (0:08)

He's been struck down in the prime of his life. Normally, very consistent, never gets ill. He's decided to do it on the day he's recording.

But I think we will be able to soldier on without him.

SPEAKER_3 (0:24)

This is The IAB UK Ad Tech Podcast.

Joe Jackson (0:28)

I'm Joe Jackson, joined as always by Alex Kozloff. Hello. We'll be hearing from Pat later on in a pre-recorded interview with Damon, CEO of Ozone.

But for now, we are going to just take a quick look at the news, and of course, exclusively, the news this week has been some big news. OpenAI crossing the 1 billion threshold with ads on ChatDBT.

Alex Kozloff (0:49)

Well, that's their forecast, right? Because it's their run rate to a billion. Right. So that means that that based on the money they've been making the last few months, they're expecting to make a billion in a year.

Joe Jackson (1:00)

Exactly. So it's there. And I'm making sure to check my notes here to get the exact term right. 1 billion annualized revenue return rate, which essentially means judging on the revenue they've made over the last month, they would expect to make a billion within the year.

Alex Kozloff (1:14)

Either way, it's a lot of money and their growth rate has been insane. I can't remember if it was 25% increase every week or something like that. I know there's over 20,000 advertisers, they've got signed up. It's in lots of different territories now.

I believe it's obviously in Europe, in the US and is it going beyond that soon?

Joe Jackson (1:33)

Yep, India, Middle East and North Africa as well. So that's a whole host of new users coming into the fold.

Alex Kozloff (1:39)

A lot of people to reach there. So listen, there's been a lot of conversation about, is this any test budgets? Can they maintain this kind of growth? Are they really going to actually hit that billion dollars in the timeline they have outlined? I think to my mind, even if it is test budgets, even if they don't hit exactly that billion dollars, it's still a phenomenal amount of growth seeing as they only released this ad products in February this year.

I think there is a true innovation happening. This is a true new ad product that we haven't seen the likes of for several years recently. So I'm not one of the naysayers.

Joe Jackson (2:18)

You're an optimist.

Alex Kozloff (2:19)

I think I am in a town an optimist.

Joe Jackson (2:21)

I'm optimistic about this AI stuff. I think everything can go places.

Alex Kozloff (2:24)

Well, I'm the first to say it, aren't I?

Joe Jackson (2:25)

But yeah, we definitely heard that refrain of the test budgets back in April when they reported 100 million annualized revenue, whatever it is. So I think fair to say that we're kind of past the skepticism now. There's clearly some real value in this technology, and clearly a lot of big companies, advertisers, are interested in getting involved.

Not least because, of course, since they originally released it, they've now come out with a sort of self-service platform. So it's a hell of a lot more accessible to get involved with advertising. Of course, when they released as well, I was looking back at some of how what ChatDBT ads looked back in February. And back then, you actually had to have a minimum spend of 200 grand at a $60 CPF. So it was a pretty steep price of emissions. And now there seems to be a lot more support for your sort of small media enterprises.

Alex Kozloff (3:18)

Yeah, they're reacting to the market for sure. And I think it makes a lot of sense. It's a decent strategy.

What the LinkedIn brigade have been a little bit cautious of is, is it working? How can we measure it?

Is it comparable? Is it apples and oranges? The kind of thing we've heard about every other kind of innovation since the day dot in the industry. I just noticed this morning, I saw a report that they're recruiting for a measurement partner, so into OpenAI. And in the job spec, it's very specific about bringing in some MMM skills, and cremantality knowledge. So again, they're listening to the market, is my perspective. They hear where the challenges are, and the budget, where the barriers to new budgets potentially are, and trying to remedy for that. So interesting to see that they're kind of growing the team, and trying to, like I say, react to kind of the industry's commentary and needs to get more. Exactly.