Marketplace All-in-One The challenges of integrating ads in AI search engines
Dec 18, 2025
Garrett Johnson, a professor of marketing at Boston University, discusses the complexities of integrating ads into AI search engines. He highlights the difficulties advertisers face, including competition and scaling challenges. Garrett explains why companies often resist ads publicly but ultimately rely on them for revenue. He delves into user tolerance for ads in chatbots and the concept of generative engine optimization, emphasizing its potential to deepen market dominance. The conversation wraps up with key insights on the uncertainties surrounding AI ad markets.
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Competition And Scaling Are Major Barriers
- AI search faces intense competition for both users and advertisers, making monetization harder than traditional search or social platforms.
- Scaling requires onboarding many advertisers and building personalization data, which newer AI firms lack.
Begin With Simple Ads And Strategic Partnerships
- Start simple and evolve ad products to meet advertisers and users where they are today.
- Use partnerships (e.g., OpenAI with Walmart/Shopify) to gain conversion data and seed personalization.
The Strategic Dilemma Of When To Monetize
- Firms face a dilemma: invest in user growth now or add ads to fund that growth immediately.
- Advertising early captures scale benefits, but incumbents like Google hold a massive lead.