Episode 13 - The Thinking Behind Ads in ChatGPT

1. 0:00 – 0:29

   Intro

   1. SPSpeaker0:00

      Hello, I'm Andrew Main, and this is the OpenAI Podcast. Today, we're talking to Asad Awan about ads in ChatGPT, how they'll look, who will see them, and how the company will preserve user trust.

   2. AAAsad Awan0:12

      Ads are shown to people who are on the free and the go tier. For Pro and Plus and for Enterprise, there are no ads. Is creepy okay if it is good? It's not. We are in the business of trust, so I think if we have to say what is our core business, it's like to win users' trust.

2. 0:29 – 4:01

   Mission and principles

   1. SPSpeaker0:29

      So from a consumer point of view, why ads? Why now?

   2. AAAsad Awan0:33

      It goes back to our mission, which is bringing AGI to all of humanity and, um, to benefit all of humanity. Uh, so when you have a consumer product, which, like, you know, eight hundred million plus people were using this, then how do you take the best version of that product to everyone? Uh, um, uh, and, and ads is one of the most proven models to be able to do that for consumer products. Uh, and I think the other part of that mission is: how do you benefit all of humanity? Which is like you want to take the best model, you want to give the highest limits, usage limits to people. You want to, uh, a- for the ads to be actually helpful, both to the users and the businesses as well. Um, so, so I think it, it's a very natural fit for a company whose ambition is actually to take the best AI to all of, all of humanity.

   3. SPSpeaker1:16

      It's a very interesting decision, because on one hand, you could say, "Hey, we're gonna take what we perceive as the high road," and say, "We're not gonna do ads, but also we're not gonna give a really good amount of usage for it and limit that, and sort of maybe use not the most capable models," but sort of, you know, say, take that approach versus embracing it.

   4. AAAsad Awan1:35

      Yeah. Yeah, I think, like, if, if, if the goal is to truly democratize access, I think ads is a good model. I think maybe what is hidden in that statement is, can ads be bad?

   5. SPSpeaker1:45

      Mm.

   6. AAAsad Awan1:45

      And, and the reality is, how do we think about the principles of ads? Uh, how do we actually set a really high bar-

   7. SPSpeaker1:51

      Mm-hmm

   8. AAAsad Awan1:51

      ... for what ads should be on this platform? How do we make them actually useful?

   9. SPSpeaker1:54

      Mm.

   10. AAAsad Awan1:55

       So when we were starting off, we, we thought like: Hey, what would be the core principles that we would announce to the world, that we would be proud of, that we would stand behind, and as a result, create a really great product? Um, so, so just to give the example of the principles, like, number one, the answers need to be independent from the ads-

   11. SPSpeaker2:11

       Mm

   12. AAAsad Awan2:11

       ... both visually, but also in how the models are trained and how the system works, um, so that you can always trust the answer. Like the whole product, ChatGPT product, is based on trust, so actually it needs to feed into that. Uh, the second is, your conversations are private. If you have a sensitive conversation, that will never have ads in it. Um, uh, and, and the conversations are never shared with advertisers. So while we do the matching between the best ad, that can be-

   13. SPSpeaker2:35

       Mm

   14. AAAsad Awan2:35

       ... a useful thing in a conversation, the advertisers don't get to see that.

   15. SPSpeaker2:38

       Mm.

   16. AAAsad Awan2:39

       We do that matching internally. And then, of course, like, you know, as, as you introduce ads, a big question is: How did you know about this data? How... Like, that's the difference between a user trust and just like doing something which is relevant to the user. Um, uh, and our goal was, how do we make something which users can transparently understand? How can they control? And, and we can go into that, because I do think there is a high bar to set over there. Because you could have some transparency, some control, which most products have, but what would be a really good version of that is something that we've been thinking about. And finally, once you add ads, I think you have to set the incentives for the teams, for the company in a way that actually continue to focus on user value.

   17. SPSpeaker3:17

       Mm-hmm.

   18. AAAsad Awan3:17

       So you don't want to just like get empty calorie time spent on the platform.

   19. SPSpeaker3:21

       Yeah.

   20. AAAsad Awan3:21

       You want to build a very useful product, and automatically, one good ad is good enough-

   21. SPSpeaker3:26

       Mm

   22. AAAsad Awan3:26

       ... actually. So we don't optimize for time spent, um, on, on the platform, and focus on the user value. So these are the principles. So I think, like, um... So connecting this back to your question is, like, how do you- why, why should we add ads, and how to do it?

   23. SPSpeaker3:39

       Mm.

   24. AAAsad Awan3:39

       I think a part of that is take it to all of humanity, and that's the best business model to do that, but prevent all the negative things that can happen-

   25. SPSpeaker3:46

       Mm

   26. AAAsad Awan3:46

       ... if you're not doing it thoughtfully. And I think being upfront with our principles, being very clear with that, um, is, is how we're starting, and then how we will test, how we will improve, and how we become kind of a learning organization with respect to this-

   27. SPSpeaker3:59

       Mm

   28. AAAsad Awan3:59

       ... I think that's, that's how it work.

3. 4:01 – 7:31

   Separation between ads and answers

   1. SPSpeaker4:01

      So you said basically there's gonna be a separation. So if I'm talking to ChatGPT about, like, "Hey, I wanna start drinking smoothies and stuff," it's not gonna all of a sudden blurt out like, "Well, here's a blender you should buy."

   2. AAAsad Awan4:12

      Absolutely. Yeah, I think so both in terms of what the model knows, the model doesn't know whether an ad is there or not. If you ask it like, "Hey, what is this ad saying?" It'll say, "I actually don't know." Uh, but you can actually press some buttons and add it to the [chuckles] model if you want to ask a question.

   3. SPSpeaker4:24

      Mm. So it's totally, totally-

   4. AAAsad Awan4:25

      It's totally separate.

   5. SPSpeaker4:26

      Totally, whatever is being displayed in the ad space, the model has no idea that's in there.

   6. AAAsad Awan4:29

      That's right. And I think in, in... And both visually as well, so that the user can very quickly say, "Hey, this is the answer that I got from the model," and then the, uh, bottom, uh, banner, which has ad in it, uh, which is very clearly distinct. So visually also, you don't confuse that. Of course, we will learn how that experience evolves-

   7. SPSpeaker4:45

      Mm-hmm

   8. AAAsad Awan4:46

      ... but the goal is to both keep the system, the models, very, very separate, and ads is kind of downstream of.

   9. SPSpeaker4:52

      Okay, yeah, that's... I think that's a very important distinction, because I think some people have sort of, kind of tried to sort of spin that there's some sort of collusion between the ad part and the model part, but you're saying the model is completely separate.

   10. AAAsad Awan5:03

       Yeah.

   11. SPSpeaker5:03

       So it's interesting. So as I'm having a conversation, something might come up, and I can then click and say, "Okay, tell the model, 'Hey, I saw this.'" Then it knows what's going on.

   12. AAAsad Awan5:11

       That's right. Yeah, you have to go... Like, in the, in the first experience, you'll explicitly have to press a button that's like-

   13. SPSpeaker5:16

       Mm

   14. AAAsad Awan5:16

       ... "Ask ChatGPT about this ad." And that would be as if you took a link from the internet and s- asked a question about it.

   15. SPSpeaker5:21

       Yeah.

   16. AAAsad Awan5:21

       So it's almost the same. We don't want to make that experience harder.

   17. SPSpeaker5:24

       Mm.

   18. AAAsad Awan5:24

       But, but if you say, "Hey, what is this ad talking about?"

   19. SPSpeaker5:26

       Mm.

   20. AAAsad Awan5:27

       It'll say, "I don't know."

   21. SPSpeaker5:28

       It's easy to start now and say, "Oh, yeah, we're gonna do the great thing. We'll do it right," but 10 years later, when there's an entire division in charge of ad revenue-

   22. AAAsad Awan5:35

       Mm

   23. SPSpeaker5:35

       ... you might say, like, "Well, do we need the wall between the model and the ads?"

   24. AAAsad Awan5:39

       Yeah. Yeah, I think like maybe there, there, there's multiple, mult- multiple angles to this. So one, we are in the business of trust, so I think if we have to say what is our core business, it's like to win users' trust-

   25. SPSpeaker5:49

       Mm

   26. AAAsad Awan5:49

       ... and give amazing answers [chuckles] to the question that they're asking. That's in the, in the consumer product side. And of course, on the enterprise side, trust is everything-

   27. SPSpeaker5:56

       Mm

   28. AAAsad Awan5:56

       ... which is like you're entrusting us with your most important data. We need to, of course, make, maintain that. So, so because I think like that, the ambition and the vision is so expansive, I think trust is the central point of it. We want to have devices which are helpful for you. Uh, if we truly want to be your best personal assistant, then you need to be able to, uh, share your most, uh, important information-

   29. SPSpeaker6:18

       Mm

   30. AAAsad Awan6:18

       ... but know that it will be, um, uh, uh, dealt in a way which is like how you would treat it yourself.
4. 7:31 – 8:52

   Who will see ads

   1. SPSpeaker7:31

      the free tier.

   2. AAAsad Awan7:32

      Yeah.

   3. SPSpeaker7:32

      And then there's also paid subscribers and people who do that, and Pro users, whatever.

   4. AAAsad Awan7:36

      Yeah.

   5. SPSpeaker7:36

      How are ads gonna play out across the platform?

   6. AAAsad Awan7:38

      Yeah, so ads are shown to people who are on the free and the go tier.

   7. SPSpeaker7:42

      Mm-hmm.

   8. AAAsad Awan7:43

      Um, and for Pro and Plus, and for Enterprise, there are no ads.

   9. SPSpeaker7:48

      Mm.

   10. AAAsad Awan7:48

       Um, and, and I think, like, that's, that's an important thing. Like, the context in which, which the company operates is actually, like, multiple missions which come all together to bring-

   11. SPSpeaker7:56

       Mm

   12. AAAsad Awan7:56

       ... bring AI to everyone, which is when enterprise use it, that's a very specific context. There is no ads over there-

   13. SPSpeaker8:01

       Mm

   14. AAAsad Awan8:01

       ... and there is a specific business model around that, which is very powerful. Uh, for subscribers who want, like, you know, the best, like, you know, highest limits and very advanced-

   15. SPSpeaker8:09

       Mm

   16. AAAsad Awan8:09

       ... features, I think that also works. But for a lot of people, a lot of consumers, the best way to do that is to have, um, have high limits-

   17. SPSpeaker8:17

       Mm

   18. AAAsad Awan8:17

       ... and free usage, uh, and then add ads which are actually useful.

   19. SPSpeaker8:22

       Yeah. I've heard people talk about, you know, part of the goal of this is to avoid making the free tier, just like the most limited thing available.

   20. AAAsad Awan8:31

       Absolutely. I think like that, that is, that is the, that is the most, I think, frustrating things for a lot of real users. Just like you ask five questions, and then it just stops in-

   21. SPSpeaker8:39

       Mm

   22. AAAsad Awan8:39

       ... in other businesses, right? We, we-- I think, like, we want to grow that a lot more, and I think it fits with our overall goal, um, that, uh, higher user limits is better.

   23. SPSpeaker8:49

       Mm-hmm.

   24. AAAsad Awan8:49

       Uh, and how do we fund that and be practical

5. 8:52 – 11:06

   Internal input and decision-making process

   1. AAAsad Awan8:52

      [chuckles] about it?

   2. SPSpeaker8:53

      So going a little behind the scenes, how are these decisions made? Like, who's in the room talking about this?

   3. AAAsad Awan8:57

      Yeah, I think, like, this is a, this is a good op- opportunity also to talk a little bit about, like, overall... Like, there is a company culture, and I think different-

   4. SPSpeaker9:04

      Mm

   5. AAAsad Awan9:04

      ... companies have different cultures, which results in different products. And our, our, our company has, like, this DNA of a research team, right?

   6. SPSpeaker9:11

      Mm-hmm.

   7. AAAsad Awan9:11

      Uh, so, so we have much more, I think, like, rigorous debates, rigorous understanding of how should we make these principles, how does incentives work, how does the, the model of this going to work in a way that it doesn't get corrupted later on? So we have had both a lo- lot of debates on that, which actually resulted in these principles, which resulted in this rubric with, like, hundreds of roundtables with, like, folks around the company on different areas, not just like work- working on ads, but everyone on every different part of the company, uh, giving feedback to create, uh, these principles. Then we con- co- convert those to a very simple rubric. I think, like, the rubric i- is user trust is the most important thing. User trust more than user value, which is then more important than advertiser value, which is more important than revenue. And I think while this seems very straightforward, uh, it's actually a very, very, very, I think, uh, in-depth decision.

   8. SPSpeaker10:01

      Mm.

   9. AAAsad Awan10:01

      So we can go into a little bit, just like user trust more than user value. Uh, a good example of that is, uh, if I showed you a really good ad, but-- and you liked it, you clicked on it, you bought something, but later on, you asked the question: "Was this app listening to me, and is the mic on?"

   10. SPSpeaker10:16

       Mm-hmm.

   11. AAAsad Awan10:17

       That, that's not user trust. You-

   12. SPSpeaker10:18

       Yeah

   13. AAAsad Awan10:18

       ... you probably did provide some value. So for us, our goal is, like, we, we, we cannot have that.

   14. SPSpeaker10:23

       Yeah.

   15. AAAsad Awan10:23

       The users need to believe and understand and control what's happening. So that's just one example, but I think once you set that right rubric up, then even bottom up, the team thinks like that. Uh, but of course, like, you know, as we have different decisions at different level, I think we have a pretty rigorous process on how we, uh, discuss privacy within the company, how we discuss safety within the company, and there are very, very clear forums for that. And then, of course, like, as we, as we make decisions at leadership level, we, one, go back to the simple rubrics, because although the rubric is simple, it's actually pretty, pretty in-depth and actually is very discriminating if you think about-

   16. SPSpeaker10:56

       Mm

   17. AAAsad Awan10:56

       ... these kind of questions. It's like, should the ad be so good, but the users don't know where this data came from? Is creepy okay if it is good?

   18. SPSpeaker11:03

       Mm.

   19. AAAsad Awan11:03

       It's not. So I think, uh, uh,

6. 11:06 – 15:53

   Controls and how ads will work

   1. AAAsad Awan11:06

      maybe it follows from there.

   2. SPSpeaker11:07

      What am I gonna see on my end? What kind of controls do I have, or how is personalization gonna work?

   3. AAAsad Awan11:12

      So I, I think, like, a big part of actually delivering really good ads is allow personalization, so that is... So when I say, uh, I want to, uh, go on a trip to Yosemite, and then that shows me camping gear because that's what I like to do.

   4. SPSpeaker11:25

      Mm.

   5. AAAsad Awan11:25

      Um, but of course, I think the flip side of that, how do you gain user trust? Is like: How did you know about this?

   6. SPSpeaker11:30

      Mm-hmm.

   7. AAAsad Awan11:30

      Or how did you learn about this? So one is transparency aspect, which is like you can see what is the data that we have on you, which is being used for ads. The second is the controls, um, uh, uh, which, which lets you see, say, which part of the data from your past chats can be used. Of course, sensitive chats, those are never used. Um, and, uh, but you can clear your data, which actually nobody else does, which is kind of-

   8. SPSpeaker11:53

      Mm

   9. AAAsad Awan11:53

      ... a crazy concept, is like you can clear your data, so we don't know, and we won't use that. Uh, you could, uh, uh, say: "Don't use my past chats," if that's what you, you care about, or you could say, "Turn off personalization fully." Um, uh, of course, there, there is the other extreme, which is like: I don't want ads. That's a form of control, and that's where I think upgrading to the Pro or Plus version to completely stop ads is also there. So I think all the way from the spectrum of, like, I really care about this, I don't think this is the right business model-

   10. SPSpeaker12:20

       Mm-hmm

   11. AAAsad Awan12:20

       ... like Pro and Plus is the right business model. Um, for very like, "Hey, I, I don't know what we were talking about yesterday, I'll just clear my history."

   12. SPSpeaker12:29

       Mm-hmm.

   13. AAAsad Awan12:29

       Great, do that. Uh, or it's like: Hey, I'm more comfortable with, like, you know, clicks, uh, from the ads being used, but not my past conversations.

   14. SPSpeaker12:37

       Mm-hmm.

   15. AAAsad Awan12:37

       You could actually do that-

   16. SPSpeaker12:38

       Mm

   17. AAAsad Awan12:38

       ... as well. Of course, people will learn, hopefully experience, like, how it improves their experience. We have a very high bar in how we use these things, but in the end, the users need to know and be able to, to control that.

   18. SPSpeaker12:50

       What will be, you know, the, the kind of the expectation for how many ads I'm gonna see, or how often these would come up?

   19. AAAsad Awan12:57

       ... uh, m- maybe the Uber principle still goes back to, in that context, is there a good ad to show which is useful?

   20. SPSpeaker13:04

       Mm-hmm.

   21. AAAsad Awan13:04

       If it is not, we'd rather not show you anything.

   22. SPSpeaker13:06

       Mm.

   23. AAAsad Awan13:07

       In fact, like, you know, as we roll out this test, you'll see that there'll be very few ads, [chuckles] because-

   24. SPSpeaker13:11

       Mm

   25. AAAsad Awan13:11

       ... like, you know, we want to be both conservative and we want to learn how to, uh, h- where, where to insert those. But, uh, but the, the principle is a little bit more around, is it useful? Is it helpful? Does it add, uh, to, to what the user is doing? Uh, and can we actually show a really good product as well? Um, so, so keep the quality of the, the content very high as well. Keep the quality of the ad very high as well. Keep the relevance really high. If we can't find a good match, it's fine. We don't need to show an ad.

   26. SPSpeaker13:39

       You mentioned that sensitive conversations, how do you know when something is sensitive or not?

   27. AAAsad Awan13:44

       So that's actually one of, one of the big strengths of OpenAI, is like both for our organic work and a lot of research in the company has gone into defining-

   28. SPSpeaker13:54

       Mm

   29. AAAsad Awan13:54

       ... uh, what's sensitive is, like it is health, politics, like violence, like many different kind of verticals. Uh, very, very in-depth, uh, definitions of that. And then, of course, using some of the best models to actually predict and understand the conversation and saying, marking it as sensitive or not. I think, like, I've actually never seen such high precision- [chuckles]

   30. SPSpeaker14:13

       Mm
7. 15:53 – 17:33

   Guardrails for sensitive conversations

   1. AAAsad Awan15:53

      and conservative.

   2. SPSpeaker15:54

      So you explained kind of at a technical level, how there's a separation, how the model doesn't see it, but also for guardrails and stuff, and I think you mentioned this before, but if I'm talking about, you know, you know, saying like: "Hey, I'm afraid of this trip," and it's like, "Well, hey, how about some life insurance?"

   3. AAAsad Awan16:05

      Yeah.

   4. SPSpeaker16:06

      You know, uh, that's not gonna happen. But how do you guys put in guardrails, and how do you decide what's appropriate ads and what's not?

   5. AAAsad Awan16:13

      So, so maybe there's two questions in there, like, what's appropriate ads-

   6. SPSpeaker16:16

      Mm

   7. AAAsad Awan16:16

      ... or not, and which context is a reasonable one? Um, and the second is, what are the controls in place so that, like, you know, over time, this doesn't, doesn't add it all? So I think maybe a, a part of announcing our principles and being very clear internally for our rubric was to actually set that up in the first place.

   8. SPSpeaker16:33

      Mm.

   9. AAAsad Awan16:33

      Then automatically, a lot of the governance within the company, how we make decisions, follows from that, uh, onwards. So it's like: Hey, I want to make this change to the product. Do this fit with this principle?

   10. SPSpeaker16:43

       Mm.

   11. AAAsad Awan16:43

       Do they fit with this rubric that we have already set up? Uh, that's the first pass. Uh, I think the sensitive context is, is something that we take very seriously as well.

   12. SPSpeaker16:51

       Mm.

   13. AAAsad Awan16:51

       Very simple things like, you know, conversation around health, um, or politics-

   14. SPSpeaker16:55

       Mm

   15. AAAsad Awan16:55

       ... or other contexts where, where, uh, their ads don't fit, and that data is not going to be used for making ads, like e- even, even matching ads.

   16. SPSpeaker17:05

       Mm-hmm.

   17. AAAsad Awan17:05

       You just filter it out. So the first layer is really see, does an ad belong here? If it does, and it can be helpful and additive-

   18. SPSpeaker17:12

       Mm-hmm

   19. AAAsad Awan17:12

       ... then add it. Uh, I think, like, this goes back to the principles, like, actually, you don't ruin neither for users nor for businesses by showing many ads-

   20. SPSpeaker17:21

       Mm

   21. AAAsad Awan17:21

       ... because you don't want advertisers to pay randomly for impressions. You don't want users to see too many ads. You want to show the one right ad-

   22. SPSpeaker17:28

       Mm

   23. AAAsad Awan17:28

       ... and being one of, like, you know, the best AI company, I think that's hopefully something

8. 17:33 – 20:26

   Skepticism about ads

   1. AAAsad Awan17:33

      we'll do really well.

   2. SPSpeaker17:34

      Every time we do an episode, we get a few people who go in the comments who are like: "No ads, no ads, no ads!" Now is your chance to talk to those people directly.

   3. AAAsad Awan17:40

      [chuckles] Yeah. I think, I think, like, in, in some sense, the... when, when people say, "No ads," I, I feel like there is a perception, and it's not wrong that, uh, because I think, like, maybe how, how the industry has evolved, that there is some suspicion around how this works.

   4. SPSpeaker17:56

      Mm.

   5. AAAsad Awan17:56

      So I do think it is kind of incumbent on us to come up with better principles, gather better clarity, better rules on how we're going to do this. I think there is... Like, we-- like, again, this whole ad industry, if you think about the online ad industry, is like maybe twenty years old-

   6. SPSpeaker18:10

      Mm

   7. AAAsad Awan18:11

      ... compared to many other industries which are hundreds of years old. So I think maybe we are in the third inning of this, where we are saying: Okay, we have learned from all of these questions and problems that people have. I think when people say, "No ads," I do believe that they have valid questions and concerns-

   8. SPSpeaker18:23

      Mm

   9. AAAsad Awan18:23

      ... around privacy. The- it's on us to do a really good job to earn their trust, uh, through better transparency, through better control, through, uh, through building that is also delightful. Um, uh, I think there'll still be skeptics, and then-

   10. SPSpeaker18:37

       Mm

   11. AAAsad Awan18:37

       ... I think we have a way to upgrade, because I think that's a valid choice as well. Uh, but, uh, but enabling really good ads with good principles, I think it's possible. I think a big part of it is having really strong AI to power these ads also-

   12. SPSpeaker18:51

       Mm

   13. AAAsad Awan18:51

       ... so that they are actually useful, and then, as a result, bring this product to so many people without, with, with higher limits.

   14. SPSpeaker18:58

       ... Some of your competitors have been having a little bit of fun at the idea of ads. [chuckles]

   15. AAAsad Awan19:02

       Yeah, I, I think, like, um, uh, different, different companies have different missions. Our mission is to take [chuckles] AI to all of humanity, and, and, um, of course, we have different contexts. So we have the enterprise business, we have, uh, you know, our subscription business, and we have a very, very huge consumer base just using our product. So I think within that context, we need to serve each one of them. We will have a really robust enterprise business, and there will be no ads over there. And then we'll have a very robust consumer business, and ads will help us grow, uh, within that. Uh, so I think if, if that's not your mission, maybe it doesn't make sense, but our mission is to, to actually build in all of these contexts, and we believe they're all actually related, uh, in, in how we build the best AI and then actually take it to everyone. And I think the good part is that we have different verticals in the business line, so it's not just an ads company. There are some companies which are purely just ads companies-

   16. SPSpeaker19:49

       Mm.

   17. AAAsad Awan19:49

       -and there, the incentives are actually different.

   18. SPSpeaker19:52

       Yeah.

   19. AAAsad Awan19:52

       But I think we have a much more holistic view on, on this.

   20. SPSpeaker19:55

       And also, when you're not serving hundreds of millions of free users-

   21. AAAsad Awan19:57

       Yeah

   22. SPSpeaker19:57

       ... it's easier to sort of say, "Eh, we don't have to do this."

   23. AAAsad Awan20:00

       I don't think it's like a vision, vision which is, which is set in abstract. This is truly a vision which is like, how does AI actually help people?

   24. SPSpeaker20:07

       Mm.

   25. AAAsad Awan20:08

       And if, if there is, like, this elitist view that some people get to use it and some don't get to use it based on who can pay-

   26. SPSpeaker20:15

       Mm

   27. AAAsad Awan20:15

       ... I think like that itself is a pretty big fork in the road-

   28. SPSpeaker20:18

       Mm

   29. AAAsad Awan20:18

       -in terms of how AI can be valuable to people. Uh, and I think our position is pretty, pretty much like everybody needs to have access to the best

9. 20:26 – 24:13

   Helping small businesses

   1. AAAsad Awan20:26

      AI.

   2. SPSpeaker20:27

      I have friends who have small businesses, and they are always trying to figure out how to promote themselves and do that.

   3. AAAsad Awan20:33

      Yeah.

   4. SPSpeaker20:33

      Could you explain from that point of view, like, what's it's gonna be like for people who are actually trying to reach new audiences through ads?

   5. AAAsad Awan20:38

      Yeah. Yeah, I think that, this, that's such a good question. Like literally, um, uh, uh, I, I have a few friends who started this, um, e-commerce company, um, selling shoes, and, uh, they did almost everything on their own, like the founders, which is like, uh, go to the factory, get this done, get the logistics done. But when it came to ads, they actually have to-- had to hire, like, three performance marketers-

   6. SPSpeaker21:02

      Mm-hmm

   7. AAAsad Awan21:02

      ... to do the work because it's so, so cumbersome, so analytical. If you don't do it right, you could end up wasting a lot of money. So I do think the vision has to be where almost as easy as you're prompting nowadays for questions-

   8. SPSpeaker21:15

      Mm

   9. AAAsad Awan21:15

      ... you could say, "My goal is sell these shoes more in M- Midwest,"

   10. SPSpeaker21:20

       Mm.

   11. AAAsad Awan21:20

       "and go." And then it comes back and it's like, "Hey, I tried some experiments, and I think this is the right bid. Given your price point, this is the right way to doing that. Do you want to spend more money on this?" And then you continue that conversation and almost become an agent for that. But today, literally, a small business has to hire performance marketers, which could be one of the biggest costs in some sense. Actually, like, you know, just that cost of running ads through, through that is actually one of the biggest costs in there, um, uh, which, which of course, then makes things more expensive. So I think the vision would be that it is as easy as just steering and telling what you need from your business, so describing the what-

   12. SPSpeaker21:58

       Mm

   13. AAAsad Awan21:58

       ... but not having to think about how it will work, and how many campaigns, and how much dollars, and everything else. It's like, "Hey, I want to spend this much. I want to grow my business this much. These are the constraints," and, um, and, and ads are created and run to match your constraints, in some sense.

   14. SPSpeaker22:12

       Yeah, it's, it's a very interesting way to think about it because auctions were, uh, revolutionary.

   15. AAAsad Awan22:16

       Yeah.

   16. SPSpeaker22:16

       The idea that you just go in there, "I want to put these words out there,"

   17. AAAsad Awan22:18

       Yeah

   18. SPSpeaker22:19

       ... and pay for that to do it. But that created an entire ecosystem of all the sort of expertise and stuff that you have to do, and it's really hard for small businesses to try to play in that space.

   19. AAAsad Awan22:29

       Yeah, I think as, as, as the competition on that increases, I think, like, the, the people who had more time and money to spend on optimizing that and analyzing the data-

   20. SPSpeaker22:38

       Mm

   21. AAAsad Awan22:38

       ... and then running the best possible ad d- got the benefit from that. Versus like if I didn't know that, like, hey, actually, um... I, I think I, I gave an example of an actual brand, which is Allbirds. It competed with really big brands on shoes, but somehow they found that every designer in the tech company is going to love my shoe. [chuckles]

   22. SPSpeaker22:56

       Mm-hmm.

   23. AAAsad Awan22:56

       And, and finding that niche, and then actually being able to create your creatives, your message, to focus on that, made them win-

   24. SPSpeaker23:05

       Mm

   25. AAAsad Awan23:05

       ... in this, like, if you go in Silicon Valley, you'll see Allbirds everywhere-

   26. SPSpeaker23:08

       Mm-hmm

   27. AAAsad Awan23:08

       ... because of that. So I think like, but that, I think, is not accessible to everyone.

   28. SPSpeaker23:12

       Mm.

   29. AAAsad Awan23:12

       If you are very analytical, and you have a whole team of people who think about that, you could do that. But theoretically-

   30. SPSpeaker23:17

       Mm
10. 24:13 – 25:34

    Future of ads

    1. AAAsad Awan24:13

       products for these niches.

    2. SPSpeaker24:14

       What does this look like in the future, where we're using things in a more agentic way?

    3. AAAsad Awan24:20

       Mm.

    4. SPSpeaker24:21

       How do ads even work ten years from now?

    5. AAAsad Awan24:23

       I think, a, a next step would be more actual conversational ads, where you could truly kind of understand what this product is about.

    6. SPSpeaker24:29

       Mm.

    7. AAAsad Awan24:29

       The next version would be, can it work behind the scenes and actually aggregate the best discounts and best-

    8. SPSpeaker24:36

       Mm

    9. AAAsad Awan24:36

       ... deals and the best version of the product? Like, for example, if I, I, I know that I like ramen, and let's say so- somehow ChatGPT has understood that preference of mine-

    10. SPSpeaker24:46

        Mm

    11. AAAsad Awan24:46

        ... then it could find that for me.

    12. SPSpeaker24:48

        Mm.

    13. AAAsad Awan24:48

        I didn't even know that that product exists, and then behind the scenes, it could actually say-

    14. SPSpeaker24:52

        Mm

    15. AAAsad Awan24:52

        ... "Oh, actually, I found this vegan ramen."

    16. SPSpeaker24:53

        Mm.

    17. AAAsad Awan24:53

        "Maybe that's something that's valuable," and of course, uh, there is a marketplace where somebody could say, "Hey, help people who are like this to discover..." Because, because, uh, discovery goes from both directions, right? Like, of course, I'm searching-

    18. SPSpeaker25:04

        Mm

    19. AAAsad Awan25:04

        ... for something, and then people want me to discover something, and there's a match between those. So, so I think it will be more agentic, but, uh, uh, in the future, uh, but at least the current modalities, I think we start from there-

    20. SPSpeaker25:16

        Mm-hmm

    21. AAAsad Awan25:16

        ... improve it, um, and make it relevant, make it controllable, understandable, trustworthy. And as I think the systems evolve, the native, the organic products evolve, this will evolve as well with that.

    22. SPSpeaker25:28

        Excellent. Well, Asad, thank you for explaining this, and, uh, look forward to seeing what's gonna happen next.

    23. AAAsad Awan25:32

        Awesome. Thanks for having me.

Episode duration: 25:34