Marcus Johnson: Hey, gang. It's Friday, July 24th. Max, Rahul, Nate, and listeners, welcome to Behind the Numbers, an eMarketer podcast. I'm Marcus, and joining me for today's conversation we have, uh, calling Philly home, Principal Social Media Analyst, Max Willens.

Max Willens: Yep.

Marcus Johnson: There he is. A Maryland staple. I don't- I think that's where he is, Director of Reports Editing.

Marcus Johnson: It's where he's from at least, Rahul Chadha.

Rahul Chadha: Hey, Marcus.

Marcus Johnson: Is that where you are now?

Nate Elliott: Yes, that is correct.

Marcus Johnson: Yes. Nailed it. New York-based Principal AI Analyst, uh, Nate Elliott.

Nate Elliott: Good day, fine sir.

Marcus Johnson: Hello, hello. Joins us from our New York studio today. Uh, we start of course with the fact of the day.

Marcus Johnson: Okay, so where on earth was the hottest temperature ever recorded? Uh, so I went to Paris a few days ago, and it was 37 degrees Celsius, 99 degrees Fahrenheit, and it was brutal. Uh, however, that's not even remotely close to the hottest temperature ever recorded. Can you guys guess the country, um, city, if you're feeling really ambitious, uh, where the hottest r- temperature ever recorded on the planet Earth?

Nate Elliott: My apartment in Queens last week.

Marcus Johnson: Yes, that is correct. It is not that, but it probably could have been.

Nate Elliott: It felt

Max Willens: like it. Uh, Bakersfield, California.

Marcus Johnson: It, it is in... Oh, actually, is Death Valley in California?

Nate Elliott: It is.

Max Willens: It is.

Marcus Johnson: Then it is California. It's Death Valley, uh, is the hottest place. The US still holds the highest, uh, world's highest officially recognized air temperature at 57.6 Celsius, call it 57 Celsius.

Marcus Johnson: That's 134 degrees Fahrenheit, uh, recorded in Death Valley in 1913, according to the World Meteorological Organization. I think I said that word wrong. That's too hot.

Nate Elliott: That is. I- People- I have questions.

Marcus Johnson: Let's do it. What's your question?

Nate Elliott: How much do we trust a thermometer from 1913?

Marcus Johnson: If it said 57 Celsius, probably not at all.

Marcus Johnson: That's, I don't know how that's-

Nate Elliott: Sounds

Marcus Johnson: like a broken thermometer

Nate Elliott: to

Marcus Johnson: me ... I don't know it's humanly, humanly possible. Somehow 300 people call Death Valley home year-round. National Park Service staff, hospitality workers at the Oasis Death, uh, Death Valley, and members of the Indigenous, uh, Timbisha, uh, Shoshone tribe, primarily residing in a place some reason is called Furnace Creek.

Marcus Johnson: Jesus. Uh, nine of the world's 20, 20 hottest national records were, uh, set in the Middle East, uh, with all nine exceeding 50 Celsius. So it goes USA's Death Valley, uh, then Tunisia, Kuwait, Israel, Iraq, uh, et cetera, et cetera. I was wondering why it's called Death Valley. I assumed it's 'cause it's so hot that peop- it just cooks people.

Marcus Johnson: That's not true. Uh, according to the National Park Service, Death Valley was named by pioneers lost there during the winter of n- uh, of 1849 to 1850. Only one person is believed to have died, but they did fear that the valley would be their grave. After being rescued by scouts William Lewis Manly and John Rogers, one man looked back whilst leaving and said, "Goodbye, Death Valley," and the name stuck.

Nate Elliott: Because of

Max Willens: the name joke. So maybe it was the cold. It's not 'cause of how hot it was. It's 'cause of how cold it was.

Marcus Johnson: Well, yeah, it could've been because of that. Yeah, I assumed because it's so hot there that it was because of the heat. But yeah, possibly. Um, anyway, on that cheery note, today's real topic. We make some very specific, but highly unlikely what if predictions for 2026.

Marcus Johnson: Okay, here's how this episode works. Uh, Max will go first. He gets about 30 seconds or so to pitch a what if prediction he thinks will come true this year. We discuss, Rahul goes next, and then we end with Nate. Max, what is your what if?

Max Willens: So my what if is pretty simple. What if infinite scroll goes away?

Marcus Johnson: Ooh.

Marcus Johnson: Okay. Tell us why this came to mind.

Max Willens: So, uh, this has been on my mind, uh, off and on for the last 12 months as these, uh, lawsuits that Meta and other social platforms are facing in the United States. But it was sort of pushed to the front of my consciousness a couple of weeks ago when the EU found that Meta is in violation of the EU's Digital Services Act, uh, specifically for failing to consider the risks associated with design features like auto-playing video, like ceaseless push notifications, and like infinite scroll.

Max Willens: Um, this is a preliminary finding that they, that they put out, and there's a lot to- that's gonna happen between now and when, uh, a final ruling is, is issued. But, you know, if, if they decide, if the EU does decide that, uh, infinite scroll has to go away, Meta faces a fine of up to 6% of its global turnover if it fails to comply with these rules.

Max Willens: Uh, for those of you keeping score, that would've been about s- $12 billion last year, uh, and is likely to be, uh, quite a bit higher than that this year. Um, and if that happens, potentially this opens up one of the biggest and most fascinating vacuums in, in really all of media, so that's why I brought it to the, to the table this, this afternoon.

Marcus Johnson: Mm-hmm. Um- Well, let's touch on that for a second. Bring, uh, explain the vacuum

Max Willens: So yeah, the, the vacuum is specifically related to a couple of different things. One is just the, um, you know, enormous amount of time that we spend, uh, on social media, right? Mm-hmm. So the, it's currently one of the, or the second-largest, um, sort of, uh, claimant of our time, uh, every day outside of, uh, time spent in front of a television.

Max Willens: And, uh, we spend a ton of that time, uh, watching social videos. So social video has sort of, you know, transformed into, uh, one of the kind of main s- sources of, of media intake for, for US, uh, and really just people around the world. And if the EU were to ban infinite scrolling, it seems, uh, pretty clear that that would significantly curtail the amount of time people spend w- watching this, the, these kinds of videos.

Max Willens: And what that would force, I think, is a pretty hard pivot from lots of different social networks into things that would keep people on their platforms without, uh, you know, running afoul of EU, and I guess in this scenario, global regulations. So I think in some cases, like for TikTok, that would be a, a really, really hard pivot into shopping.

Max Willens: Um, they've already- Mm ... you know, made TikTok shop kind of a core component of their experience, but they would, I think, find ways to sort of make it even more central. I think for something like, uh, Instagram, it might mean trying to lean more into the, the kind of messaging features that they've been trying to sprinkle more onto what they, uh, onto their user experience.

Max Willens: For Facebook, I think there's a lot of different directions that Meta could try to take things, right? Like, they could try to drive more and more activity around groups. They could also pivot into shopping by making Marketplace a more visible component, uh, of, of the app. Um- Or Fanville A, Zynga, Zynga investors- FarmVille

Rahul Chadha: makes a comeback

Max Willens: all, you know, all six of them that are left, uh- Yeah ... would definitely be very excited by the reemergence of, uh, a non-infinite scroll setting. So I just, uh, to me it's just a really interesting thing to think about. And, and then there's also the sort of most dismal, um, possibility also, which is that Meta basically just takes the mountains and mountains of user-generated content that has, uh, that gets uploaded to them every day, and uses AI to essentially stitch them all together into big blocks that are es- effectively imagine 12 swipes, um, or maybe more like 50 swipes compressed into a 22-minute, uh, block of ooze that you just stare at, uh, on your phone.

Max Willens: And so you're not scrolling, but you're getting the same amount- Mm-hmm ... of media just, uh, delivered to you in a slightly different format. Um, and if I'm being perfectly honest, I think that is probably what would happen. Uh, but that's- Mm-hmm ... uh, you know, one of the many possible scenarios that I could see unfolding here.

Nate Elliott: Is, is it possible they just take the L, pay the money, and keep raking in the cash that they generate from infinite scroll? I mean, the, the... someone over there is doing the math on this. How much- Cost of doing business ... more money do we make because of infinite scroll, and, you know- Yeah ... do we make enough that just paying the fines is worth it?

Max Willens: So this is, this was actually something that I, I did think about, um, quite a bit because, as you say, Nate, like $12 billion is a lot of money, um, for any company on earth except maybe Meta, right? Like, as you say, their margins are so healthy and so strong that it is certain that, you know, were this, were this to come to pass and the EU to drop the hammer down on them, that they would just say, "Fine."

Max Willens: Um, you know, if

Nate Elliott: the- No

Max Willens: pun

Nate Elliott: intended.

Max Willens: Exactly. Um, because the reality is that they, the, the entire, uh, the, the core of the business is just sort of that every swipe up inside of Instagram or, uh, or Facebook- brings more, it brings more ads, it brings more opportunity to shop, it brings more opportunity to discover stuff, uh, consume content.

Max Willens: And, um, it's very hard to imagine a sort of easy replacement to that, uh, that user experience. So as you say, it's possible that they may just say, "We're just going to keep going." And, uh, you know, they can't all, uh, fine a... Not every market can fine us $12 billion a year, so we'll just, we'll just take our chances.

Max Willens: Um- Mm-hmm ... so that's definitely a, a, a non, uh, trivial possibility.

Nate Elliott: Do you have a, a sense or a guess as to how much revenue they would lose if infinite scroll actually went away?

Max Willens: You know, I, uh, I have asked our... We're, we're having sort of preliminary discussions, uh, on the forecasting team about building a forecast that, that examines what that would look like, uh, and what kind of a- Hmm

Max Willens: a hit would put to their bottom line. Interesting. But we haven't crunched the numbers yet. Hmm. Uh, but watch this space because, you know, again, like this is a preliminary finding and there's more to come. Uh, and then there's also frankly, you know, like I mentioned, one of the reasons that this has sort of been on my mind is that, um, there's a trial in New Mexico that, that Meta lost earlier- Mm-hmm

Max Willens: this year, and one of the phases of the, uh, trials, the second phase of the verdict essentially is a, is a judge is going to decide on what sorts of remedies, uh, Meta is going to have to, uh, undertake to, to make, you know, the, the suit right. And, and getting rid of infinite scroll is one of many things on a long list of possible, uh, remedies that the, the judge could land on.

Marcus Johnson: Mm-hmm.

Max Willens: So it's possible that, you know, again, the EU is a, is a, a, a valued market for, for Meta, but it's, you know, not nearly as valuable as the United States is. Um, so any- Yeah ... forecast that we build would have to sort of have, I think, both. There'd be a US specific one. We'd probably build a global one. Um, but it's, it's a huge and interesting thing to, you know, try to tease out.

Rahul Chadha: Hey, one question that just kind of jumped out to me is that, you know, platforms have proven to be sort of masters at dark patterns. And, you know, while the intent is there, I think historically we've seen regulators tend to lag behind business You know, is the spirit, is the s- you know, they may wanna, um, follow these regul- a- adhere to the letter of the law, but do they really have an incentive to follow the spirit of the law?

Rahul Chadha: And, you know, the, like, follow-up question to that is, are they just thinking of new ways to, like, you know, keep people kind of tapped into the, the platform that we haven't even considered yet?

Max Willens: Oh, yeah. I mean, that was partly why I, I closed my spiel with, um, you know, the possibility that M- Meta will come up with, introduce something called, you know, uh, Meta Story Time, and it will just be, you know, all the stuff that would normally get crammed into a, uh, a normal 35 minutes of scrolling, it'll just be smushed into one AI f- uh, f- formulated block that people can stare at.

Max Willens: And that will technically, uh, you know, fulfill or, you know, get them out of the crosshairs of regulators. But it is effectively doing the same thing of just putting people in front of this lazy river of, um, you know, synapse-frying, uh, short-form content. It's just gonna be packaged- Right ... in a different way.

Max Willens: So I think there's lots of ways that they could kind of, uh, as you say, like, uh, f- fulfill the, you know, letter of the law, but maybe not the spirit of it.

Rahul Chadha: One other question I had for you, too, is, you know, Minda Smiley, your, your colleague on the social media desk, has written a lot about the blurring of lines now between streamers and social media platforms and YouTube.

Rahul Chadha: Like, everybody's just trying to get eyeballs. Um, you know, do you think this change that might be more relevant to, uh, mobile usage could hasten the movement of these platforms into the living room onto the television sets?

Max Willens: Hmm. It's definitely possible. Good question. I mean, I think that a lot of, um...

Max Willens: There's kind of a, one of the reasons, I mean, it's, it's not hard to understand why, why TikTok and Instagram in particular want to get themselves onto television screens. Um, but I think that there is kind of a fundamental mismatch between the, uh, form of mobile v- vertical video and, uh, the sort of twitchiness that comes from being able to change the channel with just a swipe, and the stuff that you get when you sink into your couch to, you know, watch old-fashioned television or long-form content, um, or even just, like, medium-length content, which is such a huge, uh, portion of what's available on YouTube.

Max Willens: And, uh, so I think that- It's possible that it could kind of drive more, more viewing on the biggest screen in the house, but I, I think that the people have gotten sort of sufficiently acclimated to the idea of, of content that they can just fire up at, at a moment's notice whenever they have any kind of downtime at all.

Max Willens: Mm-hmm. Um, and until people figure out a way to, like, you know, carry their televisions with them, I don't think that that's gonna, uh, be much of an option.

Marcus Johnson: This is the problem with this episode, is that each of these, uh, segments could be its own show And I should have maybe broken them out. Uh, great start for, uh, for the episode though, Max, is what happens, or what if the EU bans infinite scroll.

Marcus Johnson: Uh, we have to move on unfortunately. Rahul, what is yours?

Rahul Chadha: Uh, mine is what if Facebook became cool again? Okay I can hear the, the, the, the just outright skepticism and the sharp intakes of breath, but just hear me out. You know, I, I think Facebook seems acutely aware of the, you know, reputational problem they have now as just being a, a way, you know, the shift from being a way to, like, actually engage with your, uh, real-life social circles to being, becoming a repository of AI slop and, and boomer hu- humor and, and just endless ads, you know.

Rahul Chadha: Um, but you know, I think over the last 18 months they seem like they've tried to make, uh, some moves to, you know, recapture some of their original magic. Uh, I think one of the f- one of the things they've really doubled down on is trying to entice creators to the platform. They've done that through streamlined payouts to creators.

Rahul Chadha: They established a program that guarantees payouts to, to creators who have, you know, um, sizable followings on other platforms. And they've also, like, supposedly changed the algo to help small creators build new audiences, according to information. They've also kind of doubled down on, um, you know, trying to make the platform itself more appealing from a UX perspective, I think.

Rahul Chadha: And they've done that through things like the Friends tab, which is supposed to be really, I think, what you could describe as the original version of Facebook, you know, which is really just people you have connections to and not leaning as heavily on the algo to, to dominate your feed. They kind of tried to resurface the poke, if anybody even remembers that.

Rahul Chadha: And you know, they, they, they've said they've been trying to down, down-rank unoriginal content and low-effort reposts to try and, like, you know, improve, I think, the quality of the content that people are engaging, uh, engaging with on, uh, Facebook. Um-

Nate Elliott: I love that you led with their increasing payouts to pr- to, uh, uh, creators who are popular elsewhere, 'cause nothing says cool like attempting to buy the affection of cool people.

Rahul Chadha: I mean, that is true, but, you know, I think from the creator perspective, and Max, you know, correct me if I'm wrong 'cause you're the expert here, but, like, you know, my sense is creators too are facing a lot of challenges, and diversification of revenue seems appealing. I think, you know, the problem with, with all these p- uh, programs they're, they're kinda pumping out to entice creators is, like, is there, you know, are they gonna be long-lasting?

Rahul Chadha: Is it just, like, a test and see effort? They're gonna t- you know, cash their checks, and then in three months they're gonna be out. Like, you know, that's, I think that's a question that remains to be resolved in terms of all the enticements they're doling out to creators, for sure.

Max Willens: Yeah, I mean, I, there's now a long, long, uh, stretch of, uh, examples of Meta rolling something out to try to entice, uh, different pockets of the, the creative or, or media class and then abandoning them, uh, after they've, you know, don't drive the results that they wanted.

Max Willens: And I think that, you know, creators are, are s- sensible enough that they'll, as you say, they'll take the check, but I don't know that it's gonna necessarily get them to stick around. I was, though, when, when you brought this up, Rahul, trying to, like, think through what it would mean for in- or for Facebook to become cool again and, um- It, it really did lead me down this weird path of like, you know, trying to Wonder whether that would get us closer to a super app, because this, this is a thing that has been sort of, has come up as a topic of conversation in and around social for the last, like, 15 years, right?

Max Willens: Because they're very pr- uh, prominent and, and kind of established in China and, you know, Meta has made a couple runs at this. First they tried to create currency with, with Libra, which they thankfully abandoned. Uh, TikTok has, you know, definitely signaled that they're interested in doing this. Uh, Elon Musk is obviously obsessed with this idea.

Max Willens: And I think that, you know, if you could somehow kind of magically get everybody convinced of the idea that Facebook is the place to be all the time, it has the most raw material needed to sort of move in that direction, right? Like, it's a place you can do shopping, it's a place you can, uh, forge direct connections with people in your community.

Max Willens: It's a place, it has a really robust kind of messaging, um, capability and, and, uh, infrastructure and, uh, you know, once they sort of continue moving down the path of, of facilitating more transactions and also this, this agentic, uh, surface that they, they keep, uh, trying to sort of shoehorn into their surface.

Max Willens: Like, then we're talking about the first kind of ply or, uh, viable super app in the United States being Facebook, which is a crazy thing to contemplate. But that was sort of where my mind went when I, I first saw this, uh, as a topic of conversation. I don't know what you guys think about that.

Nate Elliott: I think ChatGPT wants to have something to say about that, but-

Nate Elliott: I'm not sure either ChatGPT or Facebook/Meta will actually get there.

Max Willens: No, I, I completely agree with you.

Nate Elliott: Rahul, you mentioned, uh, bringing back the poke or trying to bring back the poke, which seems like a uniquely unlikely thing to happen, but I mean, can you see this happening? Can they come roaring back, riding on a, a wave of mid-aughts, uh, reminiscence?

Nate Elliott: I,

Rahul Chadha: I think that the, the only, the moonshot I can see bringing this full circle for them would be if alphas start ironically embracing Facebook, and the, the ironic use translated into real use. I mean, I think Max already kinda touched on some stuff. I think Facebook's really been relegated to this very utilitarian app where it's like marketplace, you know, my wife is on the moms group.

Rahul Chadha: You know, there's a buy nothing group that we use. It's not really a place where people go, I think, to, um, consume content as much anymore. You know, Facebook also did redesign their core big blue app to, you know, make it look more like Instagram. They're, they're, you know, you can watch reels on, on Facebook.

Rahul Chadha: They're trying to make it happen.

Marcus Johnson: I wonder, though, if, um, you made the joke about, uh, alphas, the youngest generation, um, but I wonder if there is a, similar to how people have gone back to the, the, the dumb phone, so to speak- But you know that, that yearning for how something used to be and for a simpler way of engaging, whether it was with a phone, whether it is social media.

Marcus Johnson: Um, so maybe there is something there. I would've thought this was an insane, um, take until, uh, had we not done the episode, Max, uh, me, you, and Ethan last week, uh, on time spent. And, um, there was a, a piece in there, Oscar, who is one of the senior directors of our forecasting team, had said, quote, well, this is from one of the, uh, the analysis that he wrote about how time spent with social media is changing.

Marcus Johnson: He said, "In our Q4 2025 update, we reversed Facebook's engagement declines to show growth for both 2025

Marcus Johnson: and 2026. And in the Q2 2026 update, we are showing stronger growth in time spent on the platform. Time spent was up 4.3% year over year in 2025. We expect year over year growth at 3.1% in 2026, up from our previous prediction of 1.6%." Um, so he said Facebook's daily average time spent figures will settle in about 34 minutes a day this year.

Marcus Johnson: So they're not huge growth numbers, but they're growth numbers, and so it does seem like there has been a reversal i- in engagement at least. I don't know about coolness. Uh, harder to measure. Let's move to our final one. Um, Nate, what is your what if?

Nate Elliott: My what if is, what if OpenAI actually does make $100 billion in ad revenue in 2030?

Marcus Johnson: Okay. So this, this is coming from their, their claim from earlier this year, correct? That they were gonna make about two and a half billion in ad revenue from AI this year and 100- By 2030, 100 billion, correct?

Nate Elliott: 100 billion by 2030, yeah. That's-

Marcus Johnson: Okay ...

Nate Elliott: reportedly what they told investors when they went out and did their last private, their most recent private round of financing.

Nate Elliott: Right.

Marcus Johnson: Okay, so tell us more.

Nate Elliott: Well, to be clear, we don't think that's gonna be- No ... anywhere near true, and if you look at our forecast, which hopefully is on the screen right now, uh, you'll see that while we're very bullish on AI advertising overall, we think that, uh, US marketers will spend $68 billion buying ads on AI interactions and responses by 2030.

Nate Elliott: Um, while we're bullish on AI advertising overall, we think most of what's happening in AI advertising will happen through more traditional search channels, right? Google's doing a great job of convincing people they don't need to go to ChatGPT or anywhere else to get AI responses. They can just Google something, and if they want an AI overview, they'll get one.

Nate Elliott: If they wanna dip into AI mode, they can do that. And so while we're bullish on AI advertising, we actually think that the total market for in-chatbot advertising in 2030 will be about $5.4 billion. So we don't think they're gonna come anywhere close to that. But to create that forecast, we had to sit down and think about what are the assumptions that OpenAI had to make in order to get to that number and to be able to answer people's questions about that number.

Nate Elliott: And, and that's the interesting part of the what if for me, because- Mm-hmm ... to get to 100 billion, it means certain things would have already happened. For instance, AI would have already started to significantly cannibalize the amount of time and the number of queries people are spending with traditional search It means that, uh, ChatGPT would have to reverse the current trend in which they are losing large amounts of AI market share every month and every quarter, and go back to where they were a couple of years ago and be as dominant in consumer AI as Google is right now in search.

Nate Elliott: And it also means a thing that would've have to happened is we'd have to have already gotten a huge ad load inside of AI that basically every turn, every response of every commercially pointed AI interaction would have to contain at least one ad. So those are the, the things that would've already had to have happened to get there.

Nate Elliott: And, and then the other side of the what if is what does that mean would happen going forward? Um, because it means a, uh, not just a, a, a growth in ad revenue, it means a reordering of ad revenue. It means that maybe Max's prediction that infinite scroll goes away, and so lots of companies have lots of ad budget they would've thrown into Meta, for instance, um, are looking for new places to spend that money, and there's a reordering of whether money's spent on Meta's platforms or whether it's spent with ChatGPT.

Nate Elliott: Mm-hmm. Uh, if, you know, if this requires AI cannibalizing search, it means that there's a reordering of the amount of money spent on Google advertising, uh, and that a lot of that's going to ChatGPT. So it's fascinating to me both in terms of the, the conditions that are necessary to get there, none of which we think will happen here at eMarketer, um, but also in terms of, uh, what it means would happen from that point forward in terms of the shape of the industry.

Max Willens: Yeah, I feel like the first question that I had when we looked at this was, is there any private, uh, consumer-facing journalism left, right? Because one of the things that this presumes, I think, is a kind of full-fledged, um, embrace of AI, and ChatGPT in particular is kind of the front door to all kinds of information, right?

Max Willens: Like, and in that scenario, uh, that basically means that All of the content and information that, uh, AI, or a lot of the, the sort of news content that, um, you know, AI generates, uh, has to come from, from somewhere. But I, based on what I've started to see, uh, in the sort of, you know, emerging market of content marketplaces and stuff, we're, we're looking at something akin to what happened to the music business, um, when Spotify showed up, where we're basically going from, you know, the news industry already went from analog dollars to digital dimes, and then this is then a move into AI micro pennies.

Max Willens: And, you know, they're, the largest news organizations, uh, especially the ones that have institutional backing like, like the BBC, for example, are gonna find a way to make those scraps work. But every local news publisher, every, you know, mid-sized, um mostly ad-supported, uh, journalism endeavor is almost certainly going to find those economics unsustainable.

Max Willens: And so, um, that was one of the things that I was, uh, my, that my mind fl- flashed to immediately when we came up with this hypothesis. I

Nate Elliott: mean, it's a huge concern, and we're already seeing reports of just enormous drop-offs in traffic to a lot of small and mid-sized publishers. As you say, some of the larger ones I think will find a way to survive.

Nate Elliott: You mentioned BBC. They have a license fee to fall back on as well as, uh, ad-based international opportunities. Um, but without the, the license, licensing fee, uh, for most properties, um, they're gonna have to find a way to make it work between advertising and subs. But the larger players should, most of them should be able to find a way to do that.

Nate Elliott: Um, you know, Ahrefs, the, uh, the search and AI, uh, visibility, um, reporting platform published some data recently, and if you do the math on the percentage of, uh, queries people are submitting to both ChatGPT and Google and the amount of website traffic that's coming from ChatGPT and Google, it works out to something like a, a Google search is I think 23 or 24 times more likely to send a visit to a website than a ChatGPT prompt or conversation.

Nate Elliott: Um, so we worry about, you know, Google Zero, uh, and, and that's a, a fair worry. I mean, even before AI, only about m- you know, maybe half of Google searches led to a click out of the Google ecosystem, and AI Overviews and AI Mode has driven that number down further over the past couple of years. But the real concern is the standalone chatbots because when you look at 23 or 24x, uh, in terms of Google being more likely, I mean, we're worried about Google traffic, but they're, you know, 23 or 24 times more likely to send a visit to a website after a query than ChatGPT is after a prompt.

Nate Elliott: Then, you know, Max, the, the concern you bring up is, is real, and it's existential, and it's a little bit frightening. Hmm.

Rahul Chadha: Nate, I'm curious, what do you think 100 billion in revenue looks like from a user experience perspective? You know, I think one of the codes I'm not sure OpenAI has cracked yet is, like, how do you serve ads in a way they're additive and not interruptive?

Rahul Chadha: How many are too many ads? And then, you know, what happens to user trust if they feel like they're, you know, getting non-objective results, uh, from the chatbot?

Nate Elliott: Yeah, those are all incredibly important questions, and, and really weirdly, they're questions that OpenAI doesn't seem to be trying to answer right now.

Nate Elliott: You know, they, they said they were launching an ad trial. Their ad trial, as far as I can tell, consisted of one single creative format and one single ad placement, and within weeks, they were bragging about the annual run rate and talking about expanding into other markets. It's not an ad trial, it's a full-fledged ad launch, and they skipped over the part where they test and learn and improve the offering.

Nate Elliott: And what people forget about traditional search is it took several years for the search engines to figure out which ad format was going to work for everyone involved, by which I mean the consumers and the advertisers and the search platforms. Mm. It took Facebook even longer. Facebook ads were terrible for the first five or seven years that they were sold.

Nate Elliott: People forget that when Facebook IPO'd, they had been selling advertising on a large scale for, I think, four years, and their average CPM was less than 40 cents a thousand. The ads weren't working very well. It was... You know, the IPO was based on the hope that they might figure it out, and they did figure it out, but it took them five or six or seven years to figure it out.

Nate Elliott: OpenAI hasn't really tried to start figuring it out as far as we can tell, and we keep hearing and seeing things that say that maybe they're moving in that direction. You know, I, I got a call from a reporter recently about a job posting that OpenAI had, had, had published looking for someone to deal with multimedia advertising, and that would at least indicate that they're thinking about trying different creative formats.

Nate Elliott: But if you're not, if you're not testing different ad formats, different creative formats, different placements, then you can't possibly figure out what the best option's going to be, what's gonna be most effective for advertisers, most profitable for OpenAI, and most tolerable for users, and that's the trifecta that you need to figure out.

Nate Elliott: And I, you know, I really hope they start working on that sooner than later because, because if they don't, then what you're gonna get, you know, to your question, Rahul, is you're gonna get one format and one placement, and you're gonna get bajillions of them. And- Mm-hmm ... and like I said, I, I think the, the $100 billion in 2030 assumption requires there to be ads in every turn of every conversation that could possibly be viewed as commercial in nature.

Marcus Johnson: Mm-hmm. Yeah.

Nate Elliott: And I don't think that's gonna be a great experience. And I think there are other options if they test and learn and try to find those other options, but we don't see that happening right now.

Marcus Johnson: Yeah. Yeah, 100 billion in revenue by 2030 assumes, yeah, ads everywhere. Also assumes three billion weekly users.

Marcus Johnson: The projection they made, uh, they said, OpenAI was saying they're gonna need about three billion weekly users by 2030. And just to be clear- At the time, they had 900 million ...

Nate Elliott: yeah, they have 900 million right now. A, a year ago, they were adding at least 100 million new weekly users every month. Um, as we record this in, you know, mid to late July, uh, they've been sitting at 900 million without having announced one billion for- Mm-hmm, mm-hmm

Nate Elliott: almost six months. Good point. It's been, I think, five months and change at this point. So-

Marcus Johnson: Yeah ...

Nate Elliott: um, that growth rate has slowed tremendously, and if they, even if they hit, you know, a billion today or in between when we record this and when we post it, um, that means that by 2030, they'd still be at maybe half of that three billion number if they continued at that same pace of adding new users.

Marcus Johnson: Yeah. Gents, great takes. Um, we have to leave there, unfortunately, but thank you so much for hanging out with me today. Thank you first to Max.

Max Willens: Always a pleasure, Marcus. Thank you.

Marcus Johnson: And to Rahul.

Rahul Chadha: Thanks for having me.

Marcus Johnson: Yes, indeed, and to Nate. Thanks. Uh, thank you, guys. Thank you to production crew, uh, Danny, Luigi.

Marcus Johnson: I think I heard Lance in the background, too. Uh, thanks to everyone for listening in to Pine, the Business and Marketing Podcast. I'll be back on Monday talking to Ross and Danny, uh, Konstantinovich, uh, all about, uh, the three big questions surrounding Netflix. But before that, happiest of weekends.