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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Shoppers think that AI's answers are for sale
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[00:00:00] Kiri Masters: Outside of our nine to five in the marketing industry, most of us tolerate advertising as a tax that enables free or heavily subsidized services and modern [00:00:15] utilities, things like TV, social media, and stupid games on your phone. That's the deal that we have struck with advertisers, access for eyeballs, which is why we tolerate it.
[00:00:29] [00:00:30] When a pop-up ad interrupts my Candy Crush game, it's annoying, but I'm not suspicious of the motives of the game developer. We understand the deal. The ad is the toll that you pay for the [00:00:45] free thing. The ad sits next to the content, but it doesn't pretend to be the content's opinion. So it's interesting to learn that when it comes to ads in AI environments, [00:01:00] consumers have their hackles up.
[00:01:03] New research released last week from Bazaarvoice, which is a study that I worked on as a co-author, found that fifty-four percent of consumers believe [00:01:15] that if they have seen a brand advertised inside an AI tool, that brand is more likely to be recommended by the same tool. This survey covered more than thirty-six hundred adults across the [00:01:30] US, EMEA, and Australia in June of this year, and in these markets, people are already leaning on these tools heavily.
[00:01:37] Sixty-two percent of them told us that they've used AI specifically to help them shop
[00:01:43] Now what we found is that while [00:01:45] consumers increasingly rely on AI to help them make buying decisions, the actual process of building trust in a brand is multimodal, and running ads in that environment doesn't give brands a [00:02:00] free pass. Today I'm going to talk more about shoppers think that AI's answers are for sale, and the implications of advertising in AI and why it's not a shortcut to building [00:02:15] or retaining brand trust.
[00:02:17] Let's jump in
[00:02:18]
[00:02:19] Kiri Masters: Now it should be said that there are two different things going on here, and they are easy to conflate.
[00:02:24] The first is getting recommended in the first place as an organic mention, and this is [00:02:30] where brands are funding very large optimization and AI visibility projects, GEO, AEO, things like that, to actually influence that organic mention in the first place. But the second part [00:02:45] is buying an ad slot inside an AI interface.
[00:02:50] So obviously ChatGPT ads, we have ads in Gemini as well. And what fifty-four percent of consumers in this research are telling us [00:03:00] is that they think the ad might be influencing the organic mention. Now the platforms say that it doesn't. OpenAI's own help documentation says specifically, [00:03:15] "Ads do not influence ChatGPT's answers.
[00:03:19] Ads run on separate systems from our chat model, and advertisers have no ability to shape, rank, or alter ChatGPT's [00:03:30] responses." So this suspicion from consumers appears to be misplaced. But shoppers have missed the memo on this
[00:03:38] And what they happen to believe right now is creating drag on [00:03:45] trust on the products that are running in ads on AI services right now
[00:03:50] Here's the thing, the ad slot is only worth buying when people still believe that the recommendation that their AI assistant is [00:04:00] making is honest, and yet we're already seeing the money flowing into these AI ad platforms. OpenAI announced at the end of August that ChatGPT ads had reached a billion dollar run rate in just under [00:04:15] 200 days of being live with its ad product, which is
[00:04:19] very fast growth to get to a billion dollars in ad revenue in under 200 days. So while cus- while consumers are wary of this, at least, you know, in a stated [00:04:30] preference survey like this, marketers are piling in with their ad dollars. And this is a topic for another day, but just as an, an aside, I do really wanna dig into how much of that billion-dollar ad revenue is coming in from [00:04:45] temporary test and learn budgets versus being reliable in the future And whether advertisers are really seeing demonstrable results from those campaigns so far, that is a topic for another day. But for now, the marketers are [00:05:00] piling in Now ads in AI as a trust building mechanism, or at least as an awareness building mechanism or a reminder that that product and brand exists, these ad units are [00:05:15] immature relative to most other ad platforms that we have available right now.
[00:05:20] But it must be said they are evolving very quickly
[00:05:23] But right now it doesn't appear that they can be relied on as an awareness building or action driving tactic on [00:05:30] their own. We just don't have enough
[00:05:32] case studies and experience with them At least in the data that I've seen actually comparing the results of these types of campaigns versus search, versus social, versus retail media. Which raises a [00:05:45] practical question for anyone holding a brand budget. If the sponsored slot inside of an AI assistant can't yet be relied on to build brand trust, and shoppers are already using these tools anyway, where does that trust [00:06:00] actually get built?
[00:06:01] And this is the question that the research that I did together with Bizarre Voice was designed to answer it's about what shoppers do in the minutes after they get a recommendation from [00:06:15] AI to actually validate that purchase. So first of all, they go and check. So we found that shoppers do their real vetting elsewhere.
[00:06:26] 76% of consumers want to see [00:06:30] reviews with videos and photos, and 75% want written reviews before trusting an AI-recommended brand that they don't know
[00:06:40] And what I think is really interesting about the way that we ask these questions is that [00:06:45] we split up the responses between what if you were recommended by AI a brand that you were familiar with already versus a brand that you weren't familiar with already, and that's where some of these answers diverge.
[00:06:57] For example, if a [00:07:00] brand is recommended that a consumer is unfamiliar with, then they spend a great deal more time actually doing more research on that brand and product than they do if AI recommends a familiar brand. So not [00:07:15] super surprising, but the ways that consumers actually validate An unfamiliar brand is a little bit different, so it's quite specific.
[00:07:25] So 68% go to the brand's own website, [00:07:30] 65% go to social, 58% go to a retailer site to double-check So AI is opening the door, but the trust really gets built on human-derived channels, and the actual transaction [00:07:45] happens at the retailer or at the brand.com your advertisers can't wait weeks for audiences. GrowthLoop's Composable [00:08:00] Commerce Media solution helps media teams turn first-party data into high-value audiences, launch campaigns faster, and prove what's working across every channel. Learn how retail media [00:08:15] leaders at Costco, Fanatics, and Gopuff use GrowthLoop to create highly segmented audiences and deliver stronger results for their brand partners.
[00:08:28] Visit [00:08:30] go.growthloop.com/breakfast. That is go.growthloop.com/breakfast
[00:08:40] Now it's inevitable that ad formats and disclosure norms within these chat [00:08:45] assistants are going to mature over time. We are still super early days, and maybe a year from now we'll be talking about an ad channel is much... that is much more mature, that consumers really can differentiate [00:09:00] between what is an ad and what is a organic mention, and they feel a lot more confident about being able to discern the difference.
[00:09:06] But in the meantime, the immediate lever that brands have to actually build trust is making sure that the proof that [00:09:15] shoppers already seek out, that is reviews, user-generated content, a rich brand.com experience, making sure that that information is accessible both to humans and AI [00:09:30] crawlers. Bazaarvoice made a point in the research to note that UGC, user-generated content, that is locked behind JavaScript means that many AI crawlers are not going to be able to read that.
[00:09:42] And so that is one of the [00:09:45] actionable takeaways that we, uh, were able to include in the report. One of my friends and head of e-commerce at Advantis Health, Ash McMullin, shared her reaction to the research
[00:09:58] Saying [00:10:00] consumers want unbiased opinions. LLMs read reviews differently than people do, scanning at a scale that surfaces patterns that a human never would. How a brand shows up everywhere has never mattered more for winning [00:10:15] customers. And here's something I have been thinking about and am planning to cover in a webinar that is coming up, and I'll be sure to share the link on this podcast when we have that scheduled.
[00:10:25] But I've been thinking about the evolution of brands and how for [00:10:30] a century brands did their own vouching through packaging, through mass advertising in magazines and newspapers and radio, and eventually TV. And then the retailers started [00:10:45] doing some of that too, through merchandising and shopper marketing, and then other customers did through social media and through product reviews.
[00:10:55] Now an AI assistant is the one that is vouching for a brand, [00:11:00] for a product, and shoppers, quite sensibly, are refusing to let AI vouch for it alone. Let's be clear, ads inside AI interfaces will get better. I think that I'm hopeful [00:11:15] personally, that the formats will become native And a bit more interesting and compelling versus formats that are simply borrowed from search, that we will get better disclosure conventions that will catch up to [00:11:30] consumer skepticism, and at some point being advertised inside an assistant will stop looking weird and like a thumb on the scale and something to be super skeptical and concerned about.
[00:11:41] Now, I've argued before that ads in AI don't have [00:11:45] to suck, and I still think that. I'm still hopeful, but that's a bet on the future. And here's what hasn't changed. In Ash McMullen from Advantis's words, "Brand trust needs to come from places other than the [00:12:00] brand itself." That's it for me today. I'll link up to the report, which you should definitely check out.
[00:12:06] It is called What's a Brand Worth When AI Does the Shopping? Thanks for listening, and I'll catch you tomorrow.
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