The Case for an Ad-Supported ChatGPT

Hurry up OpenAI, the world needs your ad-supported AI chat - for several reasons.

→ It will make AI accessible to those who can’t afford, or don’t choose, to pay

→ It is a necessary strategic step to lock in early strategic advantages

→ It will boost online ad-supported business, ultimately reducing prices for consumers

In 2021, Apple flipped the switch on App Tracking Transparency (ATT), and with it, cut off the oxygen of modern advertising.

Under the thin veil of privacy, they blocked cookies and pushed their own ID for advertisers (IDFA).

Were consumers complaining prior? No

Are ads less relevant after? Yes

Did it impact Meta and others? Yes

Did it destroy value for countless businesses and consumers? More than you can imagine

When Apple blocked cross-app data, attribution vanished. Targeting collapsed. The entire direct-to-consumer (DTC) ecosystem, built on efficient customer acquisition, started to suffocate.

Look at Wag!’s public filings.

Before ATT, marketing was efficient.

After it, Wag!’s SEC filings show marketing costs skyrocketed relative to revenue, rising from 26% of revenue before ATT to about 60% after.

Efficiency never recovered.

Wag was public, so we can see the data. Most DTC brands aren’t, but we’ve all watched the layoffs, price hikes, down rounds, slow fade.

So where do we go from here?

We need a return of targeted scale advertising, precision that serves consumers and serves brands, from someone who isn’t beholden to Apple.

That’s the opening for OpenAI. The only new player with the scale, and the incentive, to build a novel ad-supported AI offering.

Google’s already dominant in ad-supported everything, Gemini is no exception. Grok has X’s ad base to lean on.

OpenAI is nowhere today in advertising… which is exactly why it has to move.

Google’s wedge was technology, its lock-in was monetization. Meta followed the same pattern, social then monetization. Monetization compounds advantages.

Apple cut the drip feed. They changed the music and turned up the lights.

OpenAI (and Google) need to restart the party.