Comment by MontyCarloHall
13 hours ago
I think ads will inevitably roll out across all tiers, even the expensive paid ones. Ad revenue isn't uniformly distributed across users, but rather heavily skewed towards the wealthiest users, exactly the users most able to purchase an ad-free experience. The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue.
Google realized this a long time ago; there is no ad-free paid version of Google Search.
This kills me, and you're right - there's no escaping the ads even with a sub. Take online journalism as an example.
We're already being double-billed. Expensive subscription news like WSJ, Bloomberg and it's been a while but even FT require ad blockers even if you're subscribed.. If you're not subscribed you don't even see the ads because you can't see the full article.
It's wild that we've normalized this. There's no longer any argument in favor of an ad model when you're paying 20-30 dollars a month already - in this case, one wonders how journalism survives if they need that AND the ad revenue to pay the bills! It feels more like greed than "support."
To be honest, in the pre-internet era, paid paper copy of FT had ads too. The delivery mechanisms for ads in the internet era are trillion times nastier and more annoying, of course. By the standards of today’s web, the print ad for Cartier on the second page of paper FT looks almost classy, interesting to read.
But there's a big difference. The paper copy didn't harvest data from you, didn't infect you, didn't spy on you or steal resources from your computer or internet bandwidth.
All the advertiser knew about you was you were a subscriber to FT, and maybe what the _average_ demographic of an FT subscriber was. Nothing about you personally.
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> There's no longer any argument in favor of an ad model when you're paying 20-30 dollars a month already
Sure there is. CEO needs a new yacht. He can't afford to leave money on the table. All those subscribers? They must have a lot of disposable income if they can afford to blow it on "journalism". It would be stupid not to advertise to them.
I was shocked to find out tonight that WSJ's net profit margin was just 3.2% in 2024. I would have thought it was a lot more. Also, surprisingly Walmart's net profit margin is only 2.85% for 2025. You would think these huge companies are making huge profits.
Maybe the big players can get by with a smaller percentage of a huge number.
I’d also expect the competition in the “big leagues” to be more aggressive, resulting in leaner margins.
Also these are huge companies. Small companies might find a niche that is small in absolute terms, but large relative to the company. That niche might be underserved, allowing the small company to make large percentage based margins.
I thought Walmart was well known as an early innovator in precise-but-low-margin business operations?
I don't pay for any content that has ads in it, full stop. I decided this a while ago when I noticed how many full page ads were in magazines. I would cancel a subscription over this.
I pay a handsome subscription sum for The Wire music magazine. The ads are an important resource in a niche marketplace.
Perhaps the actual solution is to ban ads through regulation, https://news.ycombinator.com/item?id=43595269
I am all for it but it would be hard to enforce. Ads are already hidden everywhere. Someone "review" a product? Most of the time it is a hidden ad even if the reviewer hasn't been paid with money for that. Watches a movie or a video clip? A lots of products are advertised through close ups on the logos, etc.
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Regulation is theater, effectively, thanks to regulatory capture.
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>Google realized this a long time ago; there is no ad-free paid version of Google Search.
Google actually experimented with this about a decade ago (I know, I was one of the suckers who paid), but it got canned because why the fuck would you pay google when u-bloc is free?
Companies absolutely will offer ad-free experiences. Google has youtube premium, which even compensates creators with half your sub as well. Evenly distributed too.
People get wrapped around the axle of ad-subsidized models, the "I pay and still see ads" but they just are confused about a hybrid monetization structure.
At some point the larger internet has to look itself in the mirror and recognize that it's either ads, credit card, or a hybrid of those.
And no, blocking is not an option, it just offloads costs onto honest users.
> Companies absolutely will offer ad-free experiences. Google has youtube premium, which even compensates creators with half your sub as well. Evenly distributed too.
Youtube premium is not ad-free, you still gets whatever ads are embedded in the actual content.
YT premium comes with their own version of sponsor block, but you manually have to hit the skip button.
But I don't hold youtube accountable for what creators decide to put in their videos. I would grind my axe with the creator instead, it's their video and their choice. Youtube gets no cut from those segments.
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YouTube premium delivers the content you select to consume to you without displaying ads in-platform. If you then use that ad-free platform to consume content that includes ads, that's on you.
Several different “premium” tiers have this issue. Why am I purportedly paying for no ads if i continue to get ads? Whether or not they’re “platform ads” or “embedded” doesn’t matter. I paid for no ads and I’m not getting what I paid for, so why keep paying?
> The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue.
but they're already paying you. While I appreciate the greed can be there, surely they'd be shooting themselves in the foot. There's many people who would pay who find advertising toxic and they have such huge volumes at free level that they'd be able to make a lot off a low impression cost.
> but they're already paying you.
That's not how it works. It never has.
Even in the days of print publications, the publisher would seek revenues from advertisers, subscribers, and they would sell their subscriber data. (On top of that, many would have contests and special offers which probed for deeper data about the readership.) In some sense, the subscriber data was more shallow. In other senses, it was more valuable.
I get what you're saying about shooting themselves in the foot, and I'm sure there will be options for corporate clients that will treat the data collected confidentially while not displaying advertising. I also doubt that option will be available (in any official sense) to individuals much as it isn't available (in any official sense) to users of Windows. For the most part, people won't care. Those who would care are those who are sensitive enough about their privacy that they wouldn't use these services in the first place, or are wealthy enough to be sensitive about their privacy that they would could pay for services that would make real guarantees.
The stats I see for Facebook are $70 per US/Canadian user in ad revenue. I'm not sure how much people would be willing to pay for an ad free Facebook, but it must be below $70 on average. And as the parent comment said, the users who would pay that are likely worth much more than the average user to the advertisers.
For the users who refuse to see ads, they'd either use a different platform or run an ad blocker (especially using the website vs the app).
Go plans at $8 are getting ads too. Netflix introduced a paid plan with ads, and it is more profitable.
sure but if Netflix keeps up its transition to cable then more people will return to the high seas.
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The progression of the cable TV industry shows many people are more than happy, or apathetic enough, to allow the industry to double-dip.
Cable TV is a bad analogy because it was a natural monopoly. Even the disruption route (satellite TV) was another natural monopoly.
Netflix doesn't have the moat of "built a physical wire connection to every persons home" that cable TV enjoyed.
basic people sure, but the early internet showed an extremely strong demand for a better service than cable TV. When that demand is there then people will start seeking other options and building bridges of convenience to help the basic people also port over.
They aren’t shooting any feet if the competition is doing it too.
that's extreme motivation for someone to build a new competitor. Deepseek demonstrated that there's innovation out there to be had at a fraction of the effort.
Paying users aren't necessarily profitable users though. It's harder to pin down with OpenAI, but I see no end of Claude users talking about how they're consistently burning the equivalent of >$1000 in API credits every month on the $200 subscription.
(not that ads alone would make up an $800 deficit, they'll probably have to enshittify on multiple fronts)
wouldn't you charge those people more before you start serving ads? Also wont a lot of those sorts of users be running ad block anyway? I'm mildly sus that this is the right way to go.
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> Google realized this a long time ago; there is no ad-free paid version of Google Search.
Ad-free YouTube costs $14 a month (and the creators get a higher payout from premium user views than they do from the free, ad-viewing users).
Video ads are less lucrative than ads alongside search, which can be a lot more closely tailored to both the user and the search results at hand. The existence of YouTube Premium shows that Google is indeed willing to provide paid ad-free experiences so long as it nets them more revenue, and is strong evidence that the same is not true for search.
This isn't really true anymore. Most notable creators have "sponsored" content somewhere and ads in platforms don't have to be an explicit, traditional ad. Product placement for the sake of no other reason than product placement is also advertising.
YT has more angles. That's really the point. And monetization is adjusted accordingly.
Beyond all of this ads are more increasingly invasive due to the cat and mouse game of iteration. Personally, I bounce from sites where I can't get around a blocker. I also pay for content on sites where its worth it. But if I can't ever read anything on your site I'm just skipping it. If I really need / want to see something I'll go one level deeper, but that's a rarity these days. Everything is mostly in reprint somewhere else anyway.
At the end of the day it's still simple sales: you have a product at a price point people can't refuse. That is the 5% of the clear web today and it shows in all the bullshit people are going through to protect their ad revenue.
Youtube premium is not ad-free.
It is.
I don't why people say this. They even include their own version of sponsor block, which is generous, because technically sponsor segments aren't even part of youtube, they are purely the creator deciding to make the ad part of their content.
Also, just to put it out there, many creators would likley be able to cut sponsored content if the 40% of viewers not viewing ads paid up. Not every creator is a greedy ruthless overlord, many just want to keep the lights on. Especially in tech/nerdy channels, where ad block use is the highest.
YT ads are intrusive like with TV. You can't skip most them easily anymore like you can scroll and skip sponsored Google Search results.
Firefox and ublock origin... no ads. I avoid youtube on my mobile device as it's a lot more difficult to control the ads there.
Given this specific family of product, the ads are essentially baked in - medium is the message and all.
LLM induced psychosis is one thing, but extremely subtle LLM induced brand loyalty or ideological alignment seem like natural attractors.
One day a model provider will be 'found out' for allowing paid placement among its training data. It's entirely possible that free-tier LLMs won't need banner ads - they'll just happen to like Pepsi a lot.
This is what worries me the most. Marketing is ultimately a business of manipulation, and services like ChatGPT seem like excellent tools for manipulation. I wish OpenAI could find a less adversarial business model.
This is why we need to ban targeted advertising. In fact, I think ads should be 100% opt-in. The user has to accept them or it is illegal to show them to the user.
That's what a generic semi-forced opt in via JavaScript is for, as we learn from the cookie opt in nonsense of EU sites. It's compliance for compliance sake.
But what could an opt-in requirement for advertising possibly mean other than a compliance checkbox that 99% of users click through? It just seems like where you land if you start with the intuition that ad-supported platforms shouldn't be legal, realize that implementing that policy would ban all print media, and do your best to rescue it rather than abandon the idea as unworkable.
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Strange that people even think this possibility is true. Name any other subscription that you can't use without ads?
- youtube
- hulu
- netflix
- spotify
- photoshop
I can't think of a single other one that one can use that still shows ads. Absurd proposition because llm's are more fungible and once you start forcing ads, competitors will barge in.
It also skews towards power users, as it allows for more ad inventory. If they're going to do an ad auction marketplace with bidding snd such then they're likely to rollout slowly to keep auction pressure and bids high enough. Expand to too much inventory and CPMs will drop like crazy.
Counter example: Kagi.
Kagi is a niche product at best, with revenue literally orders of magnitude lower than Google's.
At one time Google was a niche website, literally orders of magnitude lower than Alta Vista.
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Yes, but it is still a valid counterexample to:
> I think ads will inevitably roll out across all tiers
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Kagi has recently moved to new offices in Belgrade. While I like their product we should not forget that serbia is not a free country, there has been massive corruption and russian influence. Even though there are massive protests from time to time, no leadership change has happened.
I don't think the Kagi team has any bad intentions, and most likely they have attended the anti-Vucic protests as well. Moving back to Serbia is an economically wise choice for Kagi as a company.
However, once regime goons show up in Kagi's offices, they will be forced to do whatever the serbian government and by extension putin wants them to do.
Often Kagi gets mentioned alongside Protonmail and related privacy-focused services. But Switzerland is a totally different country than serbia to operate it.
It's a risk we should be aware of and consciously decide to accept when we are using Kagi.
> But Switzerland is a totally different country than serbia to operate it.
CIA vs Putin. Not that different imho.
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Why is that a counter example? Kagi is just providing a convenient access to several language models that might well advertise via API, too.
Maybe it’s “inevitable” in the long run, but Google didn’t start out plastering their search results with ads. They did very well with text-only ads in the margin, and it was a slippery slope from there, but it took decades. Also, they are still only running text-only ads, even though there are a lot of them.
The timing isn’t inevitable. Is OpenAI going to speedrun to the endgame? Not sure they need to.
> Google realized this a long time ago; there is no ad-free paid version of Google Search.
well there is also no 200$/month Google Search subscription
That is exactly my point: there easily could be, but there isn't. Based on how many commenters on HN and similar sites bemoan how Google Search quality has precipitously declined and yearn for the Google of ~10 years ago, I think there'd be nontrivial demand for a $200/month ad-free Google with no-nonsense comprehensive results. Such a product does not exist because it would ultimately be a net loss for Google.
I'm going to guess that a big reason it doesn't exist is because a. people who claim to be willing to pay 200/mo for it won't actually open their wallets given the opportunity, and b. even for the miniscule number of people actually possible in the market to do so, they moan and groan about any perceived problem with the product to the point that it's not worth trying to capture the market. Just look at the comments in this very thread complaining about YouTube Premium and how it isn't perfect because it can't block creator inserted ads. There's no pleasing people. And that's an order of magnitude less than 200/mo.
Reminds me of vid.me, who picked up on the intense hatred towards youtube and launched a competing video host that actually got some serious traction. No ads, no subscriptions, just pure good content.
They went bankrupt in a year. Turns out internet consumers are just painfully entitled.
The integration of ads is a problem but content creators and marketers have had an adversarial relationship with SEO with Google for a long time, the old algorithm probably would not work as well as what they are providing.
There would be competition from API wrappers, if you want to pay there will always be lots of options to chat without ads. I hate to think what they and others might come up with to try and thwart this.
I think ads will take the form of insidious but convincing product placement invisibly woven into model outputs. This will both prevent any blocking of ad content, and also be much more effective: after all, we allude to companies and products all the time in regular human conversation, and the best form of marketing is organic word-of-mouth.
I just saw a sibling post about Kagi, maybe this is how the industry will end up, with a main provider like OpenAI and niche wrappers on top (I know Kagi is not just a google wrapper but at least they used to return google search results that they paid for).
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I don’t know how subtle or stealth you can be in text. In movies, there’s a lot of stuff going on, I may not particularly notice, I’m going to notice “Susie, while at home drinking her delicious ice cold coca-cola….”
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You have no guarantee the API models won’t be tampered with to serve ads. I suspect ads (particularly on those models) will eventually be “native”: the models themselves will be subtly biased to promote advertisers’ interests, in a way that might be hard to distinguish from a genuinely helpful reply.
> You have no guarantee the API models won’t be tampered with to serve ads. I suspect ads (particularly on those models) will eventually be “native”: the models themselves will be subtly biased to promote advertisers’ interests, in a way that might be hard to distinguish from a genuinely helpful reply.
I admit I don't see how that will happen. What are they gonna do? Maintain a model (LoRA, maybe) for every single advertiser?
When both Pepsi and Coke pay you to advertise, you advertise both. The minute one reduces ad-spend, you need to advertise that less.
This sort of thing is computationally fast currently - ad-space is auctioned off in milliseconds. How will they do introduce ads into the content returned by an LLM while satisfying the ad-spend of the advertiser?
Retraining models every time a advertiser wins a bid on a keyword is unwieldy. Most likey solution is training the model to emit tokens represent ontological entries that are used by the Ad platform so that "<SODA>" can be bid on by PepsiCo/Coca-Cola under food > beverage > chilled > carbonated. Auction cycles have to match ad campaign durations for quicker price discovery, and more competition among bidders
you mean the API response then will contain the Ad display code?
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There's absolutely no way this is happening. Want to bet?
No, there's GSuite / Google Workspace instead. OpenAI doesn't have one of those.
Even if you (i.e. your company) pay for the top-tier GSuite subscription, you still don't get an ad-free Google Search. Very curious ...
> I think ads will inevitably roll out across all tiers, even the expensive paid ones.
The counter for this is that people hate being double-billed like this.
The ads may not be announced. If ads can be subtly inserted “organically” through crafted weights then AI companies may try to claim that it isn’t advertising, if it’s even possible to catch them doing this. For instance, advertisers could pay to have their product embedded as the “best” in a category during training. If this is done as a fine-tuning step then it could be re-run later as advertisers and base models change.
How would the billing work for this? So much of advertising technology is tracking for the purposes of attribution.
How does openAI know what to charge for a particular product and category? How do I know if my money was well spent to boost my product in that category?
I don’t think you’re wrong! I’m just curious about how the new pricing models will work.
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Counter-counterpoint: people pay exorbitant amounts of money for cable TV channels that still show ads. Even the premium channels (HBO et al.) implicitly show ads in the form of product placement, which incidentally is exactly how I think chatbots will show ads. Most users won't even consciously realize they're there.
Exactly. It'll provide you the how to when prompted, but also include product recommendations from paying companies.
How do I wash my windows? You can use window cleaner and a paper towel. Our recommendation is Windex, an S C Johnson product.
At first it'll annoy us, but eventually we will all get used to it.
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Once the ad people are the ones making decisions because they are bringing in all/most of the money, inevitably it happens.
All hail APIs!