Chatbot ads reach 200 apps, with an AI-written version doubling clicks

A buyer of search ads can see what people typed before they clicked. A chatbot ad buyer can see the whole chat. WIRED reported on 5 November that Koah Labs is now placing ads across over 200 AI apps. The ad decision uses the full conversation up to the click.

The story is by Paresh Dave. Koah Labs is a San Francisco ad tech company. It is not OpenAI or Google. The WIRED piece is about the ad tech layer growing around chatbots other than the top labs.

The numbers Koah Labs gave WIRED

Koah told WIRED that users click about 3 percent of its ads. That is on par with Google's mature ads system, WIRED reports. Koah also said machine-written ads get double the clicks of human-written ads. The company said one in four queries about a brand or retailer is a support issue. That covers returns and exchanges.

Koah serves ads in over 200 apps, WIRED reports. Named examples include DeepAI, which offers creative query tools. Liner, which provides citations in AI answers, is another. Koah said it has worked with Hims, the telehealth company, and UrbanStems, a flower delivery service.

Nic Baird is Koah's CEO. He said Koah has about one tenth the advertisers OpenAI has. For context, OpenAI has over 100,000 customers advertising in ChatGPT since ads began there in February, WIRED reports.

What the WIRED piece says is new

Koah picks each ad using the whole chat up to the click. Baird told WIRED that chatbot prompts are at least double the length of Google queries. The extra text is more signal. Baird said this means the ad can be creative in ways Google ads cannot. For example, a prompt about "stress" led to ads for spas that performed well in Koah's network.

Baird said Koah anonymises queries and stores them in a de-identified way. He would not say more about data collection or storage. WIRED notes that the privacy trade-off is unclear, because chatbots are used as "confidants" by many users.

What else WIRED put on record

Google expanded ads in AI Mode to 10 more countries last week, WIRED reports. Google said users "find them highly relevant". That is Google's own statement.

Anthropic is not selling ads in Claude, WIRED reports. The company made that pledge in a Super Bowl spot this year. Its IPO filing did not mention selling ads in Claude. Anthropic has about $112 billion in investor cash, WIRED said.

Kevin Baragona, CEO of DeepAI, told WIRED that ad revenue has been "meaningful" to his app. He added: "I don't think the ads are working terribly well for anyone." Baragona is one of two named ad buyers. Neither is sure the model works.

What a reader can do today

A team that buys search ads has a new place to buy them. The 3 percent click rate is Koah's own figure. A team that runs retention or support programs now has a new channel to consider. If one in four brand queries in a chatbot is about a return, those queries can be answered as ads.

Two facts the piece does not settle. How Koah charges, in cost per click or cost per impression. And whether any outside measurement firm has run its own click rate check. Both are Koah's own numbers.

A team that does not want chats used for ad picking needs a chatbot that does not sell ads. Claude is still that chatbot today. Tomorrow is a separate question.

Source

WIRED, "Ads in Chatbots Have Arrived".