S2. Ep4 - ChatGPT Ads Are Coming: What Business Owners Need to Know

Katie: Welcome to the AI Automations for Business Podcasts. We're your hosts, Katie and Null, and we'll be discussing how you can use AI for your business along with the latest news, updates and automations to help you stay ahead of the curve, allowing you to grow and scale your business more efficiently. Please be sure to subscribe and I hope you enjoy this episode. Hi, hello. Welcome back to another episode. Hi, hello, I'm Katie. And as always, I've got Noel hear with me. Hi, Nor, how you doing?

Noel: Hello, yeah, I'm doing great, thanks.

Katie: Good. So I'm quite excited about what we're talking about today. I feel like this is just going to be such a game changer for business owners.

Noel: Yeah.

Katie: And I even want to say the users. So today, We are talking about chat GPT ads, and we're going to be talking also a little bit about what's going on with Open AI as well, aren't we?

Noel: Yes, yeah. I was really excited when I saw ads. I've never been so excited to see it.

Katie: Yeah, I feel like that's probably not going to be the collective reaction from everyone. I think only, yeah, a percentage of people are going to be like, oh my God, chatchiti ads, it's amazing.

Noel: Yeah, I have seen a lot of people going, no, I don't want ads. No, don't do this.

Katie: Yeah.

Noel: But, yeah, it does make a bit of sense.

Katie: Yeah. So we're going to be talking about, like, what this means for business owners, what it means for users. And, yeah, obviously, we'll be talking a little bit about what is happening right now. with opening AI. So where would you like to start, Noel?

Noel: I guess let's just jump straight into the ads. Let's talk about what they announced. I guess it's two weeks ago now when they announced it. But yeah.

Katie: Okay, so no mess and round. Like, we're literally a minute into the podcast episode and you're like, let's just go for it.

Noel: Yeah, jump straight in, yeah. No mess and around. Well, I was excited to see it.

Katie: Exciting opportunity. He's excited to talk about it. Okay.

Noel: So, yeah,

Katie: go for it. And I'll jump in because, yeah, I can't hold you back any longer.

Noel: Very true. So with Chachavit ads, they're going to now be showing, or will soon be showing, should I say, advertisements to anybody who is on a free plan or is on the brand new go plan which I think it's like $8 a month so they've they've added in that lower tier to make things a little bit cheaper for people which is which is great but you know there's a lot of people and I couldn't believe it when I'd look this up you know they've got like 800 million users active per week and there's yeah It's silly. Yeah, there's so many hundreds of millions of people using ChatchipT every single week. And there's like four, maybe five percent are actually paid users. So they're on the plus plan upwards, you know, to pro enterprise, business or whatever. So there's not actually that many people paying for ChatGPT. And that's kind of where my business brain clicked in. And I was like, oh, hold on a minute. You know, you'll be serving ads to hundreds of millions of users potentially every single day, which is good for a business. But from a user perspective, I get why people don't want to see ads. They see ads everywhere. They're quite sick of them.

Katie: Yeah.

Noel: And I get that.

Katie: I mean, meta just now come I with. So if you log into like Facebook or Instagram over the. the last few days, you'll now get a prompt that pops up to say, do you want to continue using meta? Well, if you do, you've now got either choose the free version, which you have ads,

Noel: or there's now a paid version.

Katie: I think it was something like $3.99. That's pounds to use it without ads. And I think that was a monthly fee. It's really interesting, like, that they've gone down that route as well.

Noel: Yeah, I mean, they kind of have to when you look at it. So to touch on kind of like the business of why ads would come along, because, you know, we're sat there using Chagabit, having a great time, getting whatever you need. You know, that's great. You don't want to them be ad, ad, ad all the way down. It's like, oh, you know, that's not really adding to the user experience. But at the same time, you know, Open AI don't. actually have that many revenue streams to, you know, create this technology and host it. You know, they've got that 5% of people that pay for chat GPT. You've got, I guess, the API for people using that, you know, the developers and stuff. I'm sure they make a fair chunk of cash from that bit. And then the other bit is kind of investors. So other than that, right now, there's not really a great deal where they bring. in income and I think ads is going to be a great way in order for them to, you know, get more money and then keep progressing in the future.

Katie: Yeah, I really didn't realize that so many people were on a free plan, especially like I, to be honest, I thought most business owners must be on a paid plan. So yeah, when you told me those numbers, I was, yeah, quite shocked.

Noel: Yeah. Yeah, it's crazy, isn't it?

Katie: Yeah.

Noel: But I suppose if a free plan, you know, it's good enough, you know, you might not use it all day, every day, you know, you're happy with the models that they provide, then why would you, I guess, you know? you don't want to use projects you're not interested in coding yeah fair enough yeah

Katie: and i and i guess like i've seen people who don't have a business don't run a business i've seen them use like chat ch t for like doing an ad book but like a car that they're selling

Noel: um yeah

Katie: which is actually, yeah, quite hilarious. Or, like, people use it to draft emails to companies and things like that.

Noel: So,

Katie: yeah, it's really interesting. And I guess for them they obviously, of course, they don't need a paid version. You know, why would they? So, yeah.

Noel: Exactly, yeah.

Katie: A free version would be absolutely fine.

Noel: yeah absolutely

Katie: really interesting so do you want to tell us a bit more about like what the ads are going to consist of and how they're going to function within chat jpt because at the moment like i think i don't know if anyone's thinking like how i thinking they're thinking like 90s internet where you've got all those like really annoying app. Pop-ups. Yeah, just like on that pain. Yeah, it's really random. So, yeah, obviously, I know Open AI I'm not going to, like, deliver that sort of interface. But, yeah.

Noel: Yeah, they've made it quite clear and said, well, you know, we're not just going to throw stuff at you, you know, with everything, or throw you ads that make no sense with the context of what you're talking about. So the way it's, it's kind of going to work, I guess, to put it into like a use case. I'd say we would look into buy a new TV. You know, we would go to ChatGBTGBT and then say, well, like, could you do like a search, find me, you know, I'm looking for this map, this brand, this sort of size TV, you know, what's about what the price is? And it will go off, do that Google search and then deliver, you know, the reviews and all that sort of stuff back to you, which is great. but then that would also then be a great time for chatypt to then go through its ad campaigns and then go who's selling these TVs, who's got an ad for that TV or something similar and then at the end of the conversation and then go, well, here's five ads at the end of the response and you could go, I'd like the sounds of that, I'd like the reviews, there's a button there to go and buy it, I'll click it, and then go off you go and you go and purchase. You know, so yeah, that's really cool.

Katie: Do you think it's only going to be like if you're searching for a particular product or service or do you think, well, you're interested in this, so I'm now going to show you this?

Noel: It should, according to Open AI, it should just deliver what you're talking about in that conversation. It shouldn't then think, oh, well, well, Noel clicked on this last time. I'm just going to show them an ad for that at a different conversation. It shouldn't do that.

Katie: So, for example, like if you're searching for TVs, you might then get an ad from a furniture company selling you like a TV stand.

Noel: Oh, you could do. It depends if you ask for it. I mean, they're very strict and saying, look, it's only going to be what you're talking about. So if you're not talking about the furniture, then it probably shouldn't. But that doesn't mean that it won't.

Katie: No.

Noel: I guess they need to test that. It is relevant, yeah.

Katie: Because like if you're, say, I don't know, putting in something, say you want help with your skincare routine, maybe you've got some issues. So then is it then going to show you something that's relevant to that?

Noel: It should do. Yeah. It obviously all depends if that's available within, if somebody has a relevant ad for that. Because the response, they've also made it quite clear that the response that the model gives isn't going to be based around whatever advertisements are available. So that's completely separate. So whatever it advises to do, it will be one thing. And then underneath, it would then go write a. well, is there anything in the ads campaigns that we could use? Yes, here they are. If there's nothing, it will show you nothing, I guess. Wow. But yeah, the response on the LLM, they've made it very clear that that's not going to be pushed in a certain way based on somebody's ad campaign to get you to click that button because that's not good user experience.

Katie: No, it's not. So what does this mean for business owners who, are interested because obviously we had Milana back on one of our episodes back in season one talking all about SEO for AI. So, you know, we were being featured within some of those searches, but I feel like now this has just taken it to another level, hasn't it? It's kind of like the difference between just doing SEO on your website and then actually using like Google ads?

Noel: It is, yeah. It's kind of interesting because, you know, with these ads, we don't know how the businesses are going to input the ads. They've made no mention of that, you know, as yet. What we've been told is to basically think like the user. So what are your customers asking for? potential to your products and services. So start thinking about that. And then, you know, they start thinking about what ads could I run for that particular product or service based on those questions. So I'm guessing they're going to ask you when you create the ad to list kind of like the topics and, you know, things that people are asking for in a kind of general sort of way. So, yeah, it's interesting. But the big thing for businesses is, you know, you know, if you have like Facebook ads, you know, someone's doom scrolling, you know, they've been there for an hour, your ad shows up on their feed, you know, they've got to look at it and go, yes, that's actually interesting. And then go, nah, but I'm not that interesting, and keep scrolling. So you've got to make it catchy enough to stop them and get them to click on that ad.

Katie: Yeah, you've got to have a really good ads campaign.

Noel: Definitely, yeah. And, you know, they're not primed for purchase, you know, they're coming at the very, very top of your sales funnel. They've never heard of you potentially, you know.

Katie: I do all think that's dependent on your ad campaign because I have bought some excellent things from ads that I have seen on Facebook and Instagram. I will have you now.

Noel: That explains all the packages. TikTok shop is your worst, I have to say.

Katie: Yeah, but that's only because it comes in a TikTok bag. You don't know what else I thought off of Instagram and off of Facebook because it comes in branded packaging and not like Facebook shop, Instagram shop. Very true, yeah.

Noel: But yeah, go back to it. It's like, you know, they're not primed to buy that product. They might look at it and go, that's interesting, click the link, a bit more and then go, that's not really for me. Or the end goal is they click and then they go on.

Katie: So it's all based on previous interest or interest

Noel: that they

Katie: think you might be.

Noel: Yes. It's all based on demographics and stuff, isn't it?

Katie: Or things that you've clicked on and like, you know, maybe cookers have followed you and stuff like that.

Noel: Maybe your phone's listened to you, who knows. Yeah.

Katie: They

Noel: always say it doesn't.

Katie: Small breaks, small breaks, small break.

Noel: Yeah. But with chat GPT ads, you know, the big thing is it's, you know, that user is already primed and is already asking questions and looking for that particular service or product. So if your ad does then get shown to them, they're probably, you know, I would say statistically more likely to click and then go through and purchase than what it would be if you just scroll past on Facebook.

Katie: Yeah, the targeting is much better, I think, with the ChachyPT ads.

Noel: Yes, because not really ChachyPT ads, you know, it could be targeting like females between 35 and 40. But then if somebody who's 42, you know, they won't get to sit. But if they ask Chachapit that question, it doesn't care what age they are. You know, it's kind of like they're interested in this topic and product, you know, that then match it with that advertisement, which is really quite clever.

Katie: Yeah. What do we think the cost is going to be to run these ads? Have we had any inclination or any hints

Noel: thrown in our way?

Katie: Okay.

Noel: Yeah. They've been quite quiet.

Katie: Do you think they're going to be mega?

Noel: They could be, but.

Katie: I think they are. I think they're going to be really expensive. run.

Noel: But I think at the same time, if you look back at Facebook and Google, when they started first doing ads.

Katie: Oh, cheapest chips.

Noel: Exactly. They both were. So it kind of makes sense that Open AI would follow that sort of thing to get everybody in, get you excited, have a bit of a discount for the first six months or whatever, and then slowly start to creep it up.

Katie: Yeah.

Noel: And hopefully by then we've already made tens of millions and can afford.

Katie: Oh, just to be the time. We won't even worry about ads at that point. Exactly, yeah.

Noel: Everyone can come

Katie: around for a cup of tea, coffee, glass of champagne.

Noel: Yeah, exactly, yeah. Because I did ask Claude the other week, and I said, how many millionaires did Facebook ads make? And I was kind of doing...

Katie: I mean, I know a bunch.

Noel: Yeah, but they record it was between 25, and 50,000 millionaires were made.

Katie: Oh, I reckon more than that.

Noel: Probably, yeah. But I think that's probably

Katie: like just in the US.

Noel: Yeah, maybe, yeah. But when I was asking that question, because when ads first released on Facebook, there was only 50 million users a week. So, you know, that's a tiny, tiny amount compared to the hundreds of millions on chatty BT. that's the point where the light bulb went off in my head and I was like, oh my God, this is this is quite something. Yeah. And then you see everyone on the three accounts in comments going, oh, this is terrible. This is brilliant. I could just see opportunities.

Katie: Yeah. So what other information do we know about these ads?

Noel: So as well as like serving like specific. products and services and you know click here to you know go off and do whatever uh there's also they've also shown an option where you could chat with the advertisement so yeah which is kind of interesting as well i kind of like that so i think the the sample that they showed was it was like almost like a venue that you would hire kind of thing and then it would it would give you the advertisement and say well look you know you could book here And then underneath that was then like chat with this advertisement. And then you could click on that button and then you could then in a closed off little space in that chat window, you know, have a conversation and then go, well, well, how many people could I, you know, book in for to be at this, you know, venue or whatever? You know, do you have like IT facilities or, you know, what kind of costs is it? So you could have that conversation first and then be like, right, okay, this is for me. And then you then click on the button to then go off and, you know, contact the business and whatever to book it. So I thought that was really, really interesting. And it would be good to see how that works for an advertiser's perspective and what you could do with it. Because, yeah, that's kind of powerful because you're already kind of qualifying a lead before they've even got to you. as well kind of you know they've already asked those basic questions and then you know they're just coming in going right well i'm happy i know what you do here's it here's my money i want to book in or buy whatever

Katie: yeah yeah i feel like this is going to be really exciting because the amount of things that people use chat chit to look up for them or to like find the best in the area or, you know, to shortlist things, the amount of businesses that it's going to help with these ads is just going to be,

Noel: yeah, amazing.

Katie: I'm really keen to no prices and costs.

Noel: Yeah, definitely. I mean, the only thing they have mentioned is that some users in the US on the free plan might already be seeing these ads. So it was released to, well, the announcement was a couple of weeks ago and they said, well, within two to four weeks, we're going to start showing these ads and testing them out, basically. So, yeah, I guess once they're happy with that, then they'll start, you know, giving us a bit more information because, you know, it's, we would like more information,

Katie: please.

Noel: Yeah, the onus is on them to get us in there and doing it so they can start earning more money, surely. Yeah.

Katie: But

Noel: it's got to work first, I guess. Yeah, first things first.

Katie: Okay, so that's really exciting, yes. And obviously, we will keep everyone up to date with chatchibati ads when we find out more information and things like that, because as you can tell, No, is quite excited about this topic.

Noel: Yeah, and it is a Tuesday, so it might be 6pm. After we've finished recorded, they might release it, and they've got a habit of that.

Katie: Yeah.

Noel: Who knows?

Katie: Okay. So what else did you want to discuss today on this episode about Open AI?

Noel: So I guess kind of from like a business perspective, I've seen quite a lot of content talking about the state of the finances for Open AI. And there's a lot of really big investors, you know, they've invested in startups for decades. And they're kind of looking at Open AI and seeing some red flags and warnings. And, you know, Open AI's got to build the data centers and all the infrastructure. They've got to, you know, buy all the bits and, you know, create all the models and all the software engineering. And, you know, the expenditure currently is exceeding the income by some margin, apparently. right so so yeah there's yeah there's some worrying signs there but with things like ads obviously that's going to help boost their revenues which is good uh but it's also kind of interesting because we've kind of seen a bit of a downgrade in chat chb t in like the last six or so months and yeah when you kind of look at everything in in a big picture it kind of makes sense and Sam Altman did a it did a town hall live stream yesterday where there was like technical founders and things out in the room asking in questions and one of the questions was you know why are these models kind of getting a bit dumber when it comes to written content

Katie: yeah definitely I find that

Noel: yeah and he he was quite honest and open about answering that question. And he was like, well, we kind of didn't bother because we didn't have the time or the money to go off and, you know, do that sort of thing. So, you know, we prioritise software engineering and technical ability over its written content. So when we move from GPD 4.5 to 5, everyone was like, well, this is rubbish. You know, now you're creating social media posts that make those sense and it's like yeah it's not very clever anymore you know and then we're going back to previous models to get that sort of content back yeah so so yeah it's kind of interesting when you look at it from a business perspective as to how this machine is working and yeah yeah it's really really quite interesting but

Katie: yeah so we were i think having this conversation actually on last week's podcast about actually how chat chitibi is getting a bit forgetful and it's diluting itself when you're asking it questions on the same chat and you're like you know trying to give it more instructions and

Noel: it's almost

Katie: forgetting what you've previously said and I am finding that more and more and more at the moment so yeah it's kind of really interesting that they've now come out and said that because, you know, we've obviously seen it for the last couple of weeks that, you know, ChachyPT has completely changed its behaviour and, you know, it's not as strong as it once was.

Noel: Yeah.

Katie: So do you think that's going to now turn a lot of people off of ChachyPT and like now head over to like LLMs like Claude instead?

Noel: It's already happening and has been happening for a little while. I think. So a lot of paid users are kind of looking at what other things are available and thinking, why would I argue with a large language model like ChattyPT to get what I want when, you know, I could just put the same thing in Claude and it's like, yeah, sure, here you go. You know, I'll understand what you're talking about and previous conversation histories. I find that's really good in Claude and, you know, serve you the answers that you need. So, yeah, the people I've been speaking to have already shifted away from Chachaputee. And they kind of just use it as on a free account just to do like really mundane little tasks kind of thing. Nothing business related, which I thought was really interesting.

Katie: Like writing that car ad or? Yeah,

Noel: yeah, just, yeah, silly little thing like.

Katie: Comparing spa brakes.

Noel: Yeah, exactly. Yeah, it's quite good at that, but...

Katie: Yeah.

Noel: So, yeah, that shift is happening and, yeah, I think if... I think the people that are kind of moving away from it now are the ones that are probably signed up to it from day one like we did. And, you know, we just kind of got to a point where it's like, what's the... You know, why am I, you know, arguing all the time with it? You know, it's not...

Katie: Yeah.

Noel: understanding basic instructions. Like, this isn't...

Katie: It's so frustrating.

Noel: It is, yeah. And they kind of talked about the memory thing as well. Yesterday on the town hall with Sam Altman. And they basically, someone was like, you know, it just doesn't remember as well as it used to. And they were like, well, you know, we are trying to fix that. We know, we want that to be better. We want, you know, it to basically understand you fully. so, you know, it can offer, you know, answers are a bit more personalised. So they want to go down that personalisation route, but they kind of know at the same time that coding and things that is earning them quite a bit more money, I guess from the API perspective. So they kind of move their model from being like a generic, good at everything, to being really good at one thing and then not so good at the, everything else. So yeah, interesting. But yeah, they do want to make more generalised and a lot better models. But I guess we have to wait and see when they come out and see what it looks like. Yeah, for sure.

Katie: Yeah. Okay. So what else was said in the town hall yesterday with Open AI? Or is there any other updates that you want to tell us about?

Noel: So I guess a lot of the town halls or software related, really. There was a lot of CTOs. There was somebody asking actually about a bit slightly off topic, but they were asking about biosecurity. And, yeah, it was kind of- We're not going

Katie: to go down that route.

Noel: No, no. No, no.

Katie: So I'm not surprised now that there was that lady at the back asleep, if I'm on us. Yes.

Noel: Yeah, 19 minutes it is a slump. Yeah,

Katie: I mean, same girl, same. They're talking about that sort of stuff. I'm with a... Yeah, exactly, yeah.

Noel: So I'll tell you, one good question that came right at the end was there was a guy was like, well, his customers are kind of asking for, like a, you know, where you would sign up for a service and they'd have like login with Facebook, logging with, you know, whatever, Apple. So they were kind of like, could we have like a sign in with chat GPT? And then, you know, their personal, I guess kind of like their personal, traits comes over, or they would share, like, their developer API keys with that particular supplier. So, you know, the person providing a web app wouldn't have to have an open AI account. You know, they would just rely on the user using the tokens from their account instead, which I thought was quite interesting. But, yeah, Sam Altman seemed to think that was a good idea as well. So I don't know.

Katie: But

Noel: the one thing he kept asking was, if you've got any idea, just let us know and we'll try and build it. Oh, right, okay. Yeah, it's like, well, have you run out of ideas?

Katie: Open to feedback. Well, I think at this moment, like you said, if they're not bringing in the income that they want, they obviously have this need to keep people on chatty. So therefore, if there's any updates or new features that people want, and actually they're not very expensive, but they're going to keep customers, then they're going to try everything in their power to do that. Yeah, definitely, yeah.

Noel: Rather than people,

Katie: you know, leave and use other LLMs, which I guess they are going to worry about, especially if they've got these ads starting. You know, they don't want 800 million followers and then because they haven't been able to keep up with the strengths of, chat you be too you know tons of people go actually i'm going to now move over to claude it doesn't look good does it from an ad's perspective and people

Noel: aren't going to

Katie: pay as much money for the ads if there's not as many people using it

Noel: exactly yeah yeah yeah it's i think 2026 will make or break open ai i think yeah it's going to be an interesting year for then that's for sure.

Katie: Yeah.

Noel: Looking forward to digging more into the ads and, yeah, seeing where that goes.

Katie: Yeah. Well, we'll definitely keep everyone updated. And obviously, as the ads do come out, then we will add tutorials and information into our membership AI business club over on the school platform. So if you want to come and join us, we will leave the link below. for you, where we go through step-by-step AI, AI automations, prompt engineering, all of that good stuff. You've got Noel in there. He's there to ask questions, get support, get help as well. So yeah, and it's a really lovely community where beginners are completely outcome.

Noel: Absolutely.

Katie: Thank you so much for listening to this week's podcast. We hope you've enjoyed it. and we will catch you for another episode very soon.