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Koah's Nic Baird: AI-written ads draw double the clicks

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Koah's Nic Baird: AI-written ads draw double the clicks

3 Key Points

  1. What happened

    Koah CEO Nic Baird says ads partly written by AI get twice the clicks of human-made ones, and Koah's chatbot ads are clicked at about 3 percent, near Google's rate.

  2. Why it matters

    That suggests chatbot ads can perform like mature search ads, though advertiser experience still falls short; drugmakers keep human control and see weaker results, per Baird.

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Context & Analysis

The debate over ads in chatbots is splitting the biggest labs. Anthropic used its Super Bowl commercial this year to pledge Claude stays ad-free, and its recent IPO filing did not mention selling ads; about $112 billion in investor cash makes that stance easier to hold. OpenAI went the other way, and has over 100,000 customers advertising in ChatGPT since ads debuted there in February. Google last week expanded ads in its search chatbot AI Mode to 10 more countries beyond the US.

That leaves smaller platforms in a different position. Koah Labs, a San Francisco startup that brings ads to over 200 apps such as DeepAI and Liner and works with brands like Hims and UrbanStems, has attracted a tenth of OpenAI's advertisers. Baird's observations — AI-composed ads drawing double the clicks, and chat prompts running at least double the length of Google queries — are a window into how the format behaves before it scales.

The unresolved questions are privacy and commerce. Koah generally receives a user's entire conversation to pick an ad, and it is unclear whether users will accept the privacy trade-offs. Meanwhile, none of the apps Koah serves ads in offer AI agents that shop on their own, and DeepAI CEO Kevin Baragona says he is not committed to ad revenue because the experience does not feel right yet.

FAQ
How do Koah's chatbot ad click rates compare with Google's?
Baird says Koah users click about 3 percent of ads, roughly on par with the more mature Google ads system.
Why do some advertisers avoid AI-written ads?
Baird says drugmakers face government rules on what ads must or cannot say, so they default to more human control, which he says generates weaker results.
How big is Koah's advertiser base next to OpenAI's?
Koah has attracted just a tenth of the advertisers OpenAI has, which has over 100,000 customers advertising in ChatGPT since ads debuted there in February.
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