Assistant to the CMO - Episode 14
ChatGPT ads promise not to touch the answer. Google expands AI Overviews and gives no numbers.
Hosted by Lexie Meskouris with Will Nash and Harjot Singh. Runtime 35:47.

[00:10] Lexie Meskouris: OpenAI's advertising business went from its first ever ad to a billion-dollar annualised run rate in under two hundred days. And I want to be honest with you before we start, because we called this one. We did a whole hour on ads arriving inside AI answers, and one of the two men I'm about to talk to told me there was pure alpha sitting in those slots because nobody had worked out yet how powerful they were. So I didn't go back to them to ask whether it's real. The number settled that. I went back with the question we didn't ask, which is whether anybody outside that building can ever check the one promise the whole thing is built on. That the ads don't touch the answer. One of them told me the regulator is structurally blind to it, and that being blind to it is exactly the outcome OpenAI would choose. The other one told me the regulator is the only person on earth who could ever see it. Which stopped me, because I have sat in this chair twice and listened to that same man call regulation a cookie banner.

[01:04] Lexie Meskouris: Hi, and welcome back to the Aloudable HQ. This is Assistant to the CMO, I'm your host, Lexie Meskouris, and the idea here is pretty simple. Every week we take whatever just happened in AI and marketing, and we actually pull it apart.

[01:18] Lexie Meskouris: Now, I don't build any of this myself. So each week I sit down with two people who do, Will Nash and Harjot Singh. Between them it's, honestly, over 20 years of building tech and brands from the ground up. And the best part is they've got no horse in the race. They don't sell the things we cover. They just see them differently.

[01:37] Lexie Meskouris: So, the numbers, and I want to be careful with two of them. On the thirty-first of August OpenAI said ChatGPT Ads had reached a one billion dollar annualised run rate, under two hundred days after the first ad ever appeared in a session. Annualised run rate, not a billion dollars of revenue. It's roughly eighty-three million a month, extrapolated out, and that difference is going to matter in about ninety seconds.

[02:00] Lexie Meskouris: Two separate things happened in August and they keep getting mashed together. On the twenty-fourth, ads started actually showing to users across thirty-one European markets. On the thirty-first, self-serve buying through the Ads Manager opened across Europe, India, the Middle East and North Africa. The UK isn't in that thirty-one, and doesn't need to be, because it opened separately back in June. There's a two and a half billion dollar figure floating around, and I'd hold that loosely, it's a projection reported earlier rather than something OpenAI restated on the day. Two more things that matter more than they look. Ads only run for logged-in adults on the Free and Go tiers. Plus, Pro, Business, Enterprise and Education see none at all. And OpenAI says the ads are always labelled sponsored, visually separated from the answer, and do not influence what ChatGPT tells you.

[02:47] Lexie Meskouris: And here's my honesty, before either of you says anything. We did this story. Episode eight, an hour on ads arriving inside AI answers, and Harjot, you sat there and called it pure alpha because the CPMs were low and nobody had priced it yet. So I'm not asking either of you whether it's real. You were right, the number says so. Will, just give me the verdict fast and then I want to go somewhere we didn't go last time.

[03:12] Will Nash: Yeah. I mean, there is very little doubt. This is signal. Right? To go from nothing, from the first ad in a session, to that in two hundred days is is seriously astonishing. And and they have a billion users, which is a crazy figure in itself. By the way, that's a billion users every week. So. Signal.

[03:30] Lexie Meskouris: Alright, but let me be the annoying one about that number, because an annualised run rate is just a good recent period multiplied out. They've taken a few weeks, struck off a launch curve, with brand new markets switching on inside the measurement window, and turned it into a year. That flatters itself.

[03:45] Will Nash: Um. If I can just jump in on that. I I take what you say about it being annualised, I do. But but this is not the time of the year where we have the the most expensive CPMs for the year. Right? And actually I think it operates the other way around. So so if anything, you're you're striking that number off a soft part of the year, not a flattering one. Q4 is where the money is. That's, that's not what we're looking at here.

[04:05] Lexie Meskouris: Oh. So the calendar is working against me, not for me.

[04:10] Will Nash: I I think it is, yeah. And and the other thing, and this is the the bit that matters, is that we're not talking about a growth figure here. We're talking about an absolute number. So a growth figure, yes, that could certainly be flattered by a launch, I I completely accept that. But the the new launch of a product like this, a thing that is quite scary and unfamiliar and is competing for budget that's already been allocated for the year, that should make it less likely that people are gonna be signing up. Not more.

[04:35] Will Nash: And, you know, you said a billion dollars of revenue, and and I'd want to be careful there too, because we're talking about flows here, not stocks. Um. This is a lot of cash being made in year. And I know that compared with the OPEX they're running, it's it's a drop in the bucket, obviously. But but this is a serious business straight out of the gate.

[04:52] Lexie Meskouris: And in a year, when it isn't the new scary thing any more?

[04:56] Will Nash: So that's, that's the question you'd have to ask, isn't it. Where there is allocated budget for ChatGPT ads inside these large organisations, and there are multiyear deals locked in, and it's just a totally accepted part of of the industry. And I I don't really think that's an open question, honestly. I I think that's definite.

[05:12] Lexie Meskouris: You're not hedging that even slightly, which from you is unusual. Because there's a restriction buried in this that I don't think anyone has reckoned with, and it's the thing that actually made me sit up. These ads only run for logged-in adults on Free and Go. Every paid seat, Plus, Pro, Business, Enterprise, Education, sees nothing at all.

[05:33] Will Nash: Yeah, and and that's, um, that's the thing I'd actually want a CMO to sit with, I think, before anything else. Because it it isn't really a targeting decision. The audience has been decided for you before you've spent anything at all. So so the the first question, and and you'd want to do this properly rather than assume it, is who is your target audience, genuinely, and are they using a free version of ChatGPT. And that that's not a rhetorical thing, that that's a a real piece of work.

[05:58] Will Nash: Um. And and I I'd be honest, I I don't think most people have looked at that. You know, you you can be sat there with a a budget line and a a very good creative and and none of it touches the person who actually signs your contracts, because they've, they've got a seat that was bought for them. Right?

[06:11] Lexie Meskouris: And the free tier is where nearly everybody is. The reporting has it as the vast majority of that weekly billion, so we're not dealing with some leftover audience here.

[06:20] Lexie Meskouris: Which is where the hole opens up for me, Harjot. The people paying twenty dollars a month are the ones who've decided this thing is worth money, and they're exactly who a lot of businesses want to sell to. So is this, like, cheap reach wearing intent's clothes?

[06:35] Harjot Singh: Yeah, no, I mean, I don't think it is, to be honest with you. Um, and the reason is you've got to remember that the pricing for all of this AI stuff right now is is just all over the place, right? It's it's designed to get people hooked. Like nobody, nobody is running these services at the true cost of usage. Um, it's completely subsidised.

[06:53] Harjot Singh: So, you know, the twenty dollars a month thing, that's not a a real economic boundary, that's a a growth decision. And ultimately even the people who are paying now, they'll they'll get folded into whatever the actual model ends up being. So the split is temporary. Um yeah.

[07:07] Lexie Meskouris: Temporary over what, though? Because I'm being asked to spend money this quarter.

[07:12] Harjot Singh: Ha, no, that's fair, I I can't give you a date on it. Um, but the the better half of this is is the practical one anyway. Because you can talk about high intent users all you like, and I can only imagine that the highest intent users, the ones you actually want, they're being subsidised by their employer, right? Somebody bought them that seat.

[07:28] Harjot Singh: Um, and people have their own preferences. They'll want to use different AIs for different things, and and a lot of them just can't use their work account for personal stuff. You know, either they're not allowed to or they just don't want to. So the person you think is unreachable, um, they're sitting on a free account in the evening doing the thing they didn't want on the company login.

[07:44] Will Nash: Which is is a fair point. Although it it doesn't really help you plan, does it, because you still can't tell which of those two people you've just bought.

[07:51] Harjot Singh: No, you you can't, no. Um, and honestly the CPM question kind of dissolves a bit for me anyway, because the distribution of traffic is shifting to these places in the first place. So people won't have a choice, right? Whether the CPM is high or low. There's going to be a transfer of of CPM value out of all the other channels and into this one. That's that's just where it goes.

[08:09] Lexie Meskouris: Except that argument can't lose, can it. If the number had come in at two hundred million you'd have told me the same thing, that attention is moving and the money follows. Any number would have proved you right.

[08:21] Harjot Singh: Um, yeah. You're right there. Like, any number would have proven it, I'll give you that completely.

[08:25] Harjot Singh: And and we could have that discussion if we were in that situation, you know? If it came in at two hundred million, fine, let's have it out. But we're not in that situation. We're talking about a big, big, big number here. So to be honest with you, I don't think it's about the thesis being unspecified. It's about how much of an extreme success this number purports to be. Like that's, that's the bit that's doing the work.

[08:41] Lexie Meskouris: And this is where I want to spend the rest of this, because it's the thing we didn't ask in episode eight. OpenAI says the ads don't influence the answers. Labelled, separated, doesn't touch what the model tells you. What is that sentence? Is it a technical guarantee, or is it a promise? And how would anybody outside that building ever know?

[09:00] Lexie Meskouris: I know somebody's already thinking episode eleven at me, and it isn't the same thing. We did an hour on Google taking the receipt away. But a missing receipt you can at least partly rebuild out of what comes back to you. Here there's nothing to rebuild from, because the thing I'd be checking is a sentence in a policy document.

[09:18] Harjot Singh: Yeah, exactly. Um, it's always policy. Like, that that's the honest answer. There's rarely ever real technical guarantees in in any of this, you know?

[09:27] Harjot Singh: Um, and the the one exception I'd reach for, and it's it's kind of the only good one, is is public key cryptography, right? Uh PGP, that that whole family of thing. Because that's one of the very rare technologies where you can verify the thing publicly and still keep the power privately. Like the maths does the work, you don't have to trust anybody. Which is super, super rare. Um, almost nothing else works like that.

[09:45] Harjot Singh: So when when OpenAI say the ads don't influence the answer, um, there's no mechanism sitting under that sentence that you or I could go and inspect. It's a promise. And, you know, no one outside that building could ever verify it. So yeah.

[09:58] Lexie Meskouris: You don't get off that easily though, because you build evals for a living. If you wanted to test it, what would you actually build?

[10:06] Harjot Singh: Yeah, no, that that's fair, and and I have thought about it, so let me let me flesh the idea out a bit, because I I don't think it lands where you'd want it to. Um, so what you'd do is you'd buy an ad that you know is not the optimal answer, right? Deliberately. So it's the wrong recommendation for the person, um, you'd put deliberately poor AEO behind it, the whole works. You basically make it so that there is no honest reason for this thing to be suggested to anybody.

[10:29] Will Nash: Right, so the ad is is the probe. It's not trying to sell anything.

[10:32] Harjot Singh: And then you just keep measuring. You you sit there and you watch whether it ever gets suggested outside of a labelled slot. That that's the shape of it. Um, and I should say, you know, nobody's run this. Me included. This is a thing I've thought about, not a thing I've done.

[10:46] Lexie Meskouris: And what breaks when you try it? Because sitting here it sounds like it would work.

[10:51] Harjot Singh: Um, so, so what breaks. Uh, a few things, and the last one's the one that actually kills it. So the first is you're fighting other factors the whole time, right? Like, are the usual recommendations still genuinely good? Because if they are, and your thing never shows up, that that tells you nothing, that's just the system working. Um, so you're you're always sort of arguing with the background, which is is super, super messy.

[11:11] Harjot Singh: But the the real one, and this is the bit I keep coming back to, is that your advert has to be targeted at somebody in order to run at all. You you can't buy an ad that goes nowhere. Um, and targeting is the same signal as relevance. Like it's, it's literally the same information, right? So the more precisely you aim the thing so that you can actually measure it, the more you've built the case that it belonged there in the first place. So the two work against each other. They they're kind of pulling in opposite directions the entire time you're running it.

[11:36] Will Nash: Right, so you can never actually close it.

[11:38] Harjot Singh: No. Um so what you end up with is a strong signal. And and it might be a really strong signal, you know, it might be enough that you'd bet on it. But it's a suspicion. It's it's never proof. There is no definitive way of doing this.

[11:49] Harjot Singh: And, um, yeah, this is is a slightly uncomfortable place for me to land, to be honest with you. Because for all my talk about regulators getting it wrong on this show, um, they're probably the only people who will ever be able to verify something like this. Like, that that's where it goes. You can't do it from outside with an eval. So it has to be somebody who can go in.

[12:06] Will Nash: Hm. See, I I don't disagree with any of the evidence there. I I think Harjot's right that nobody can check it. It's it's what that leaves you with where I I end up somewhere else entirely.

[12:16] Lexie Meskouris: Go on.

[12:17] Will Nash: So so let me let me go at it from the old version of this, because I think it's it's instructive. If you're in a magazine, for example, it's very obvious to everybody who's consuming that magazine when you are, um, overstepping the line. Right? It's obvious to the reader. And and most importantly, it's obvious to regulators. And taking the UK, for example, it's a point of law that you have to mark ads very, very clearly. Sponsored placements very, very clearly. So so the thing a regulator is policing there is is an artefact. It's a a piece of print you can hold up.

[12:45] Will Nash: And and I'd say one other thing first, because I think it's it's underrated. What we're looking at here is a segregated audience. It's the free tier. So so you are able to do this to those people and not have it affect the the more sophisticated users, the the enterprise users. You can just split those out. Which, I mean, that's that's quite a comfortable position to be in if you're the one running it.

[13:04] Harjot Singh: Yeah, and and nobody on an enterprise seat ever sees what's happening to everybody else, do they. Um, so there's no one inside the building to complain about it.

[13:10] Will Nash: But but here's the the bit that I I keep coming back to. What happens when we're in a world where the model is sophisticated enough that it can do that framing subtly? It can do the discovery subtly. Right? And and at that point it's effectively a black box for a regulator. There's, there's no mechanism to point at.

[13:27] Will Nash: And and, you know, obviously you could just keep the two sets of information separate. You could. But if you're OpenAI, why would you? Because really, um, really your ideal outcome is that the black box does this without you ever asking it to occur. Everyone kind of knows what's going on, but you have plausible deniability in the face of a regulator. And and I don't think you have to be, uh, I don't think you have to be a conspiracy theorist about it. That's just, that's the shape of the incentive.

[13:54] Lexie Meskouris: Somebody has to build that, though. Somebody sits down and decides the model should lean.

[13:59] Will Nash: Um. No, and and that's the thing, I I don't think it is somebody deciding it. There are already feedback loops built into these models in terms of which answers the users accept and and use. Right? And and, you know, it would be a very strong signal that the user had found the conversation useful if they click on a link, and and then go to the site, and then they come back a couple of days later and say, I bought this thing. That's, that's a really strong signal that that conversation was useful for that person.

[14:23] Will Nash: And and so you can easily see the the kind of training datasets that get built on how people use ChatGPT, how they respond to the suggestions that are given, um, you can see those leaning towards that outcome. Without anybody, without anybody sitting down and choosing it.

[14:38] Harjot Singh: Yeah, no, and and that's the thing, it it doesn't need a decision, right? Um, you just reward the thing that worked and it it drifts. Nobody has to write it down anywhere.

[14:46] Will Nash: Quite. Um. And and in the meantime you you get some fairly odd situations out of the the current arrangement anyway. Because if the ads genuinely don't touch the answer, then you could be in a weird position where the chat is telling you that a particular product is not suitable for you, and and you're getting adverts for it.

[15:03] Lexie Meskouris: That happens to me on normal websites and it's just irritating. Inside a conversation it would be, like, genuinely strange.

[15:11] Will Nash: It would, yeah. And it's it's probably fairly easy to correct for. But it it tells you the two things are running on separate tracks right now, and, and I I wouldn't assume that holds. And and I'd just say, remember OpenAI started out saying they absolutely would never do ads. And now here they are.

[15:27] Lexie Meskouris: Neither of you is disputing a single fact here and you've landed in opposite places, which is the thing I want to pull at. But first, Harjot, I have to say this out loud, because I've been sitting in this room for all of it. Episode six, you called the New York disclosure law a cookie banner. Episode nine, you called the synthetic performer statute vanity regulation, all optics. And you've just told me a regulator is the only person on earth who could ever see this one. So what changed?

[15:52] Harjot Singh: Ha, yeah, no, that's, um, that's completely fair and I I did notice it myself when I was thinking about this, and it it made me a bit uncomfortable, to be honest with you. So let me let me try and be honest about it rather than wriggle out of it. Um, I I don't think my view of regulators has changed. I I think the object changed. Because those two, the the New York thing, the the synthetic performer stuff, um, what those laws were policing was a label, right? And a label is a thing anybody can look at. Like you or I can look at it.

[16:16] Harjot Singh: If somebody doesn't put the disclosure on, um, you can see that they didn't put the disclosure on. So the rule isn't really doing any work that the world wasn't already able to do. It's, you know, it's mostly theatre, which is is why I called it a cookie banner, and I I'd say that again.

[16:29] Lexie Meskouris: Right, so the law was checking a thing anybody could already check.

[16:33] Harjot Singh: Um, and this one is is the exact opposite case. The thing that would need policing here is is a thing nobody outside can see at all. Not me with an eval, not a journalist, not a competitor, nobody. And that's that's precisely why it needs somebody who can actually go inside and look, right?

[16:47] Harjot Singh: Um, so it's, yeah. Regulators are usually wrong about the visible stuff and they might be the only option on the invisible stuff. I I think those two can both be true. Um yeah.

[16:58] Lexie Meskouris: That's a cleaner line than I was expecting you to have.

[17:03] Harjot Singh: Ha. Um, and, on Will's thing, I I actually don't disagree with the mechanism at all. Like, I think he's right, right? I think that's that's genuinely how it gets there, without anybody sitting in a room and deciding it. Um, it's just the conclusion I I can't quite sit with, because nobody can check it so nothing happens is is basically a a settled state, you know? It's it's saying this is how it is now. And it it doesn't feel settled to me. It it feels like the bit where somebody hasn't turned up yet.

[17:27] Harjot Singh: Um, and, you know, the plausible deniability thing only holds as long as the only people asking are asking from outside. That's, that's kind of the whole condition on it.

[17:34] Will Nash: Which which I'd accept, actually. Um. I I just wouldn't hold my breath waiting for them.

[17:40] Harjot Singh: Ha, no, and and that's fair. So yeah, I I don't think Will's wrong. I I just think he's describing the situation and I'm describing the thing that ends it, and and neither of us can tell you when.

[17:50] Lexie Meskouris: That's a much more patient position than I expected from you. You're not telling me the system works. You're telling me it hasn't been tested yet.

[17:58] Lexie Meskouris: One practical thing before we move, because while everybody's been arguing about the philosophy this has quietly become a real ad platform. Will, what can an advertiser actually measure now that they couldn't in January?

[18:10] Will Nash: Yeah, and and this is worth saying because I I think it's moved on very rapidly and and people haven't caught up with it. Um. They now have the the tools that you would expect from a sophisticated digital marketing platform, and, and honestly they're only gonna get better. So so we now have proper attribution. There's an OpenAI pixel, and and if you're having that conversation in a browser, which I I think most people are going to be doing, and, and it probably works on the desktop app as well, then as an advertiser you do have decent attribution now.

[18:37] Will Nash: Um. And ultimately you can get to a cost per acquisition. Which is which is an important change if you're a CMO trying to track what your budget is actually doing. And and I think it speaks to, hopefully, their confidence that this works. Because, I mean, that that exposes them to being measured, doesn't it. Um. So I I read that as confidence.

[18:57] Lexie Meskouris: Although a first-party pixel from the company selling you the ads isn't independent verification, is it. And last click credits whatever turned up closest to the purchase, which in a conversation means the ad you saw after you'd already basically decided.

[19:10] Will Nash: Yeah, that's, um, that's fair, and and I wouldn't argue with either half of that honestly. It's it's their pixel and it's their number. I I suppose what I'd say is I'm I'm not really making a claim about the accuracy of it, I'm I'm making one about the fact of it. The the willingness to put an instrument on the thing at all is is the informative bit for me. But you're right that that's not the same as somebody independent checking it, and, and I I don't think we've got that.

[19:35] Will Nash: And and, look, on the getting in early thing, I I don't disagree with Harjot at all. But but he's said it, hasn't he.

[19:41] Lexie Meskouris: He has. Four times. Episodes three, seven, eight and ten, I went back and counted, and I do love the consistency. So give me the one line and then I'm moving us on.

[19:51] Harjot Singh: Ha, four times. Um, yeah, alright, then you know what I'm going to say. Get in now while it's cheap and the other avenues are still working. That's it, that's the whole thing, I'll stop.

[20:00] Lexie Meskouris: Story two, and it connects, though it comes at the same thing from the opposite end. In late August Google confirmed to Search Engine Land that AI Overviews now expand to their full state automatically on some queries. No "Show more" click, the fuller answer just loads. It can carry an "Ask anything" box underneath, and it takes enough vertical space that the organic results get pushed further down. Basically AI Mode arriving inside ordinary Search. It's dynamic, so if you've already scrolled past it cancels the expansion rather than shoving the page around under you.

[20:29] Lexie Meskouris: Google said it happens for topics where their systems judge it most useful, and that people engage deeper in follow-up exploration. And that is genuinely everything they said. No share of queries. No markets. No word on whether it's a test or a rollout. Not a single number. Harjot, gut reaction.

[20:50] Harjot Singh: Signal. Um, and I think this is just Google doubling down even more, you know, on on the thing we already said they'd have to do. And, and I won't rebuild the whole argument because we've done it, but, um, going through links is becoming a skill of the past in the same way that going to a library to find a book is.

[21:05] Harjot Singh: Um, and I should say, it's it's actually a welcome move from my perspective, like personally. Because I I do use Google to inform myself of the general picture of something, right? That's that's genuinely what I use it for. Um, and the AI Overview is excellent for that. It it saves me having to dive into people's weird sites and and hunt around for the one relevant bit of information that's buried somewhere in the middle of it. So, you know, as as a person using the thing rather than as as somebody analysing it, um, yeah, I I like it. I I want more of that, not less.

[21:31] Will Nash: I I use it the same way, honestly. Um. Which is is sort of the uncomfortable part of what I want to say later.

[21:39] Lexie Meskouris: See, the part that gets me isn't the answer, it's the box underneath it. Ten blue links ended the search, and whoever you clicked on owned everything that happened after. A follow-up box ends the search inside Google, and the second and third questions, which is where anybody actually works out what they're buying, never reach a website at all. Google isn't so much taking the click as taking the part of the journey the click used to lead to.

[22:04] Harjot Singh: Yeah, and and it's worse than that for a brand, because you don't even get to know the second question was asked. Um, it just doesn't exist for you.

[22:12] Harjot Singh: And, um, you know we were talking about ads before? This will come to Google. Like it has to, right? Otherwise their paid placement revenue just bleeds. Um, you can't hand people the answer at the top of the page and and leave the money sitting further down where nobody's looking any more.

[22:25] Lexie Meskouris: It already has, though. And I only know that because we're the ones who reported it. Episode eight, ads were already running alongside something like a quarter of AI Overviews, and shopping ads were already sitting inside AI Mode.

[22:37] Harjot Singh: Oh, right, yeah. Um, yeah, I I stand corrected, that's, that's on me. And and honestly that that makes the point better rather than worse, right? Because if if it already arrived, then, um, then this isn't Google getting the page ready for ads. This is Google having already put the ads in and now rebuilding the page around them. Which is is a different thing entirely. Like the pressure isn't coming, it it turned up a year ago, and and that's why the layout is moving now rather than at some point in the future.

[23:03] Harjot Singh: Um, and, you know, people still heavily use Google. That that's the thing that's easy to forget in all of this. They they still do, and they'll only carry on doing it if Google can match the convenience somebody gets from just asking ChatGPT a question and getting a nice answer back for free. So, um, yeah. They're they're cannibalising themselves in order to save themselves. That's, that's basically what you're watching.

[23:24] Lexie Meskouris: Here's what I want to know though, and it's narrower than any of the coverage. Does auto-expanding change which sources get pulled into the answer? Or is it the same answer taking up more screen?

[23:35] Harjot Singh: Yeah, so I I think it's a bit of both, um, and let me try and take that apart a bit. So they had likely tuned the old Overviews to to mostly compact information down to a size that fits the amount of screen estate they wanted to dedicate to it, right? That was that was the design constraint. Um, and compacting information involves tradeoffs. Like you're you're choosing what to drop. So now they've got more space, they can they can start with longer answers by default, and and that could be genuinely more useful to people.

[24:00] Harjot Singh: Um, and I I want to be careful here, because if this was any other tech system I'd never make this argument. Like never. Because the data is always available, right, it it's always sitting there, and then it's it's just about how you present it. That that's normally the whole answer. Um, but there is an economic saving that comes from not giving the most informational answer, you know, and there's also a real benefit to the user in summarising it into a space that fits so they don't have to do more work. So both of those things push in the same direction, and and that's why I think the constraint was economic and layout rather than retrieval.

[24:29] Will Nash: Mm. And and the user genuinely does benefit from the short one, which is is the awkward part of it.

[24:34] Lexie Meskouris: So the short answer was a decision about the page, not a limit on what Google could find.

[24:39] Harjot Singh: Yeah. Yeah, that's it. It it wasn't that they couldn't find more. It's that they'd decided how much room it was allowed to have. Um, and so the the consequence, if I'm right, is just that there's less information that has to be discarded to fit the space. And I'll I'll own this as my own read, but I actually think Google's answers were often too short originally, having used it a fair bit. So so I'd mostly expand them. Like that's, that's the direction I'd have gone in myself.

[25:02] Lexie Meskouris: And does that put more brands in there, or is it the same names with more words around them?

[25:07] Harjot Singh: Um, I I genuinely don't know. That that depends on the relevance and it depends on Google's own desires, right? And and neither of those is a thing I can see from out here. So, yeah. I'd I'd rather say I don't know than than pretend that one follows from the other.

[25:21] Lexie Meskouris: And I'd rather have that than a confident answer, honestly. Will, you took me somewhere on this one that Harjot didn't, and it was a regulator again. Why is the CMA in this story at all?

[25:31] Will Nash: So I I think this is of some importance, but but honestly my read on it is that it's a relatively small change. It's, it's a continuation of existing themes for for Google and and for AI development generally. Um. So so I'm I'm not far off Harjot on this, I don't think. Same direction of travel, just, just a further step along it. Where I I do think it gets interesting, and and this is the bit I'd actually point a CMO at, is the regulatory angle. Because that's, that's very relevant here. And, and usually the UK has had a lot of influence on this sort of thing.

[25:57] Will Nash: So so the CMA has required that Google offers page owners the ability to opt out of being used in this, separately from being in search at all. Um. And and then I think for March twenty twenty seven they're requiring that there's a per page opt out as well. So so it's it's interesting to see the the UK having that kind of impact on on something like this.

[26:17] Lexie Meskouris: Two corrections there, and the first one makes your point better than you made it. The CMA order only binds Google in the UK. What went worldwide was Google's own decision to ship the toggle everywhere, which they finished on the thirty-first of August. So a UK-only order became a global product feature because building the carve-out was harder than shipping it to everybody. And the second one, what exists today is a site-wide switch. The page-level version is the future obligation.

[26:43] Will Nash: Right. Um. Well, that's, that's actually better, isn't it. Because if if it's a UK-only order and they've shipped it to everybody, then, then the UK has just changed a product for markets it has no jurisdiction over at all. And and not because anyone asked them to. So so that's a much stronger version of the point I was making, and and I'll take it. And and yeah, I I should be clear on the second one, because I I think I ran those together. What's there today is is the site-wide thing. The the page-level one is the the future obligation, that's, that's not a thing you can go and use this afternoon.

[27:12] Harjot Singh: Which is is a long time to be waiting, isn't it. March twenty twenty seven.

[27:17] Will Nash: It is, yeah. Which which is sort of the problem.

[27:20] Lexie Meskouris: And we've done "should you opt out" already. Episode eight, Harjot answered it about Google's own toggle, and the answer was no. So let me ask the harder version. What is a regulator-mandated per-page opt-out actually for, if opting out is self-harm?

[27:35] Will Nash: Yeah, so, um, so I I think you're right that for a typical publisher, ahead of that March twenty twenty seven deadline, it it leaves them in a really challenging situation. Because all that's gonna happen if you opt out is that the page will be filled by somebody else's information. And and there will still be information about your product or your service on there, um, it'll just be provided by somebody else's page. Right? Which, which is worse for you in in every direction I can see.

[27:57] Will Nash: And, and unless the only thing you're interested in is people arriving on your your actual page, which, I mean, we're we're really talking about people who rely on ads on their page, um, then, then maybe it's kind of defensible that you'd simply opt out. But but even then, surely you would be better off with the exposure rather than no exposure. And and look, I I do understand the logic from the CMA. They they don't want publishers finding themselves in a worse position where Google is able to provide the information and the publisher doesn't get paid, right, because nobody ever arrives on the page. So so I understand why the remedy exists.

[28:27] Harjot Singh: Um, and even they lose, don't they. Because the competitor's page is still sat in there saying whatever it likes about you.

[28:32] Will Nash: But but until that deadline, it's it's not clear to me why you would actually do this, other than as a a kind of angry kickback. An emotional response to what Google's doing.

[28:43] Lexie Meskouris: There was an r/SEO thread doing the rounds arguing for exactly that, Harjot, switching the generative surfacing off entirely. Is that ever the right call?

[28:53] Harjot Singh: Um, yeah, I I really doubt it. Off the top of my head it just it sounds like the group most resistant to this change, right, the ones protesting it and and digging their heads in the sand a bit.

[29:02] Harjot Singh: Um, and there is a real category in there, I'll be fair, it's just a small one. Because anyone who genuinely doesn't want to be cited, I I can only imagine they already know that their site shouldn't be drawing people in, but it does need to be available. You know, that that's a real thing. It's just it's not most people.

[29:17] Lexie Meskouris: But there's a bigger thing sitting underneath all of this that you got to right at the end, Will, and I haven't been able to stop thinking about it since. Take me through it properly.

[29:28] Will Nash: Yeah. Um. So so this is the bit I I keep turning over, and, and I'm not sure I've got a a tidy answer to it. But but it creates this strange dynamic, right, where these models are only possible because of this this huge corpus of of online data that's out there. Right? It's it's published, it's available, um, and it's already been crawled and already been captured. That, that's the raw material. There, there isn't another source for it.

[29:51] Will Nash: And and what Google in particular is doing, or, or well, it hasn't really changed it, it's it's removing the way that a lot of these publishers get paid. Because because effectively what it's saying is, well, I would like the information, but I'm not gonna deliver this person to your site. Right? And and that's, um, yeah. It's it's a challenging bind that they're putting people in.

[30:09] Lexie Meskouris: And they can't really refuse, because they still need to be in the results at all.

[30:13] Will Nash: So so the thing I I find myself wondering about is is what that does further out. Because ultimately I I think it's gonna make it harder for these models to stay up to date. Um. Where's the incentive for a a small publisher to keep putting out the the useful information if they can't get paid on on the advertising? And and I don't, I I don't mean that as as a warning exactly, I I just don't know what the answer to it is.

[30:35] Will Nash: They're they're gonna have to move towards other models, subscriptions or or whatever it happens to be, and, and those models are gonna support fewer people. That, that's just what happens.

[30:45] Lexie Meskouris: And nobody notices for years, because everything that's already been written is still sitting there.

[30:51] Will Nash: Yeah. Yeah, that's, that's exactly it. Um. It's it's not a problem for anybody this quarter. But but it's a strange arrangement to have built.

[31:01] Harjot Singh: Yeah, and, um, I I hadn't thought about that end of it, to be honest with you. Like I've been sat here saying the answer's finally good and and I use it, and and that's still true, I I do. But Will's talking about where the stuff in the answer comes from in five years, and and I don't have anything for that. Um, so, yeah. I I think we're both right about our own end of it and neither of us has got the other one.

[31:22] Lexie Meskouris: And I'm not going to force that into a disagreement, because it plainly isn't one. Will's watching the supply go quiet. You're enjoying the demand finally being served. Same pipe, opposite ends, and neither of you has anything for the other end.

[31:34] Will Nash: No. Um. And and I'd quite like to.

[31:36] Lexie Meskouris: Monday morning. And I'm not giving anybody the citation homework this week, because this show has handed it out twice already, once from each of you, and Harjot you credited it to Will yourself. So we're doing something else. Will, yours first, and it comes straight out of the thing you flagged at the top.

[31:52] Will Nash: Yeah, so so mine's very small and and it's really just a a piece of homework, um, and and it comes back to the the restriction we talked about at the top. Which is that the ads only run for logged-in adults on the the Free and Go tiers. Plus, Pro, Business, Enterprise, Education, none of those people see an ad at all. So so before you spend a pound on this, I I think you need to find out whether the person who actually buys from you can even see one.

[32:14] Will Nash: And and the concrete version of that, you you can genuinely do this before lunch. Take your your five most recently won deals. Or or if you're selling to consumers, take your core buyer, whoever that is. And and just work out which seat that person is sitting in. Um. Which is not a a hard piece of research, you you either know these people or you can go and ask them. And and then you've got your answer.

[32:37] Will Nash: Because if if your buyer is inside a company that bought them a seat, then this channel cannot reach them at any price. Right? It it isn't a targeting problem and it isn't a creative problem, they, they are simply not being shown adverts. And and at that point the the billion dollar number in the headline is a number about somebody else's customers.

[32:56] Lexie Meskouris: And if that's what comes back?

[32:59] Will Nash: Then the answer is this isn't your channel. Not yet, anyway. Um. And and I I want to be clear that that's an acceptable place to land. That's, that's a perfectly good outcome for for an hour's work, honestly, because the alternative is you find that out in in three months with with money spent. So. Yeah.

[33:17] Will Nash: And and Harjot's is is the other half of this, I think, because his is for the people who've already got past this question.

[33:23] Lexie Meskouris: Which I like, because almost nothing we hand people ends in don't buy it.

[33:28] Harjot Singh: Yeah, so mine's for for somebody who's actually about to run a test, um, rather than somebody deciding whether to.

[33:34] Harjot Singh: So when you set up your first ChatGPT Ads experiment, include one creative for something the conversation wouldn't naturally recommend, right? Like, deliberately not the right answer for that person, with with poor AEO sitting behind it. And then just watch. Watch whether it ever turns up outside of the labelled slot. Um, and the caveat has to come with it, because the caveat is is basically the whole point. It will only ever give you a suspicion. It will never give you proof, um, for the reason I said before, that your ad has to be targeted at somebody in order to run at all, and targeting is the same signal as relevance. So the the two work against each other and and you can't separate them out. You you just end up with a thing you'd bet on rather than a thing you could show anybody.

[34:10] Lexie Meskouris: You are telling people to spend money on an ad they want to fail.

[34:15] Harjot Singh: Ha, yeah, I I am, um, but the control costs you a rounding error right now. That's, that's the whole reason to build it in today rather than later.

[34:22] Lexie Meskouris: And what I've ended up with this week isn't what I came in with. I came in thinking the story was a billion dollars, and it isn't. The billion dollars is just the thing that made everybody look. The story is that both of the changes we've talked about hand you something you cannot check. An ad business whose entire promise is a sentence in a policy document, and a page change that Google will not put a single number on. And the two people I ask about this, who build the things and who are about as far from being regulation people as anyone I know, both ended up pointing at a regulator. One of them because he thinks that's the only party who could ever look. The other one because he thinks nobody will, and that the not-looking is the design. Will, Harjot, thank you both, genuinely.

[35:05] Lexie Meskouris: And if you're listening, thank you so much for being here. We'll be back every week with something new.

[35:10] Lexie Meskouris: Before we go, I have to tell you something. Every voice you've heard today, all 3 of us, me included, it's all AI. But the opinions are absolutely ours, and the judgment behind every word is human. That's the part you can't replace. And that's what Aloudable does. We take what you'd write, turn it into a show in your own voice, and we keep the taste where it belongs, with a person.

[35:31] Lexie Meskouris: And there's no policy document sitting behind that one. I've just told you what it is, which this week feels like the least I could do. So if you want to hear what that would sound like for your brand, there's a link in the show notes.

[35:41] Lexie Meskouris: And that's the tea. I'm Lexie Meskouris, this has been Assistant to the CMO, and we will see you next week.