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Anthropic is maintaining its commitment to keep its Claude chatbot ad-free, following a pledge made in a Super Bowl commercial earlier this year. While the company’s IPO filing omitted any mention of selling ads for revenue, the broader chatbot industry faces high operational costs that make advertising an appealing option to cover expenses.
The Rise of Chatbot Ads
OpenAI has fully embraced advertising, with more than 100,000 customers running ads in ChatGPT since their introduction in February. Meanwhile, Google expanded advertisements in its AI Mode search chatbot to 10 countries outside the United States, reporting that users find them highly relevant. Although advertisers are not entirely satisfied with the current experience, expectations for improvement remain high.
Advertising is especially crucial for niche chatbot platforms lacking the massive financial backing of top AI labs or tech giants. WIRED recently spoke with Koah Labs, a San Francisco startup that brings ads to over 200 apps, including DeepAI and Liner, while working with brands like Hims and UrbanStems.
Koah CEO Nic Baird notes that ads partially created by AI generate double the clicks compared to those fully made by humans. This likely happens because AI-generated marketing copy blends more naturally with an AI model’s output. While Koah grounds its ads in product details and imagery to prevent hallucinations, strictly regulated industries like drugmakers rely more on human control, which yields weaker results.
Creative Targeting and Privacy Concerns
Unlike traditional Google searches that match queries like stress help directly with therapist ads, chatbots offer more creative flexibility. Baird explains that spa ads perform well when triggered after user prompts related to stress. Koah achieves this by customizing ads based on both the user prompt and the AI model’s response, capturing the broader conversation context.
WIRED reported that Koah’s ads achieve a click-through rate of about 3 percent, matching the performance of mature Google ads. However, serving these ads often requires analyzing a user’s entire conversation up to that point. While Baird states that Koah anonymizes and de-identifies stored queries, privacy trade-offs remain a concern as users frequently treat chatbots as confidants rather than simple search tools.
Customer Support and Future Challenges
Koah estimates that one in four chatbot queries regarding a brand involves returns, exchanges, or support issues. Baird suggests that retailers can use ads to target disappointed customers, offering warranty reminders or AI-assisted support to bypass costly customer service channels. The strategy risks annoying consumers further if it fails, but offers a direct path to resolution.
As autonomous AI shopping agents begin to emerge, like Meta’s Muse, advertising is expected to evolve. Baird believes future ads will provide agents with top recommendations, discounts, and purchase paths, provided chatbots clearly label sponsored content. Not all developers are convinced, however, as DeepAI CEO Kevin Baragona notes that ad revenue has been meaningful for his platform, but privacy and design concerns mean he remains uncommitted to the model as ads do not yet work well for anyone.
