What I Learned as Google’s First Australian Advertiser Can Apply to AI Advertising.
I believe advertising is coming to AI soon and will be the new frontier of digital marketing. Nick Turley (Head of ChatGPT) said “there are no immediate plans for ads, but that OpenAI won’t rule them out.”. In my view, they are coming, particularly given they have a free option for users. AI is going to play out the same way as search engines played out in the late 90’s and early 2000’s. I believe we will see ads appear in some format with organic results (most likely distinguishable as separate in some way like how google and Bing do it currently).
So, why does this matter? When it comes, we can worry about it then right? No wrong! You need to be ready to pounce and here is why.
The Origin Story: A 1 Cent Arbitrage
In 2003 when google launched AdWords in Australia, I was doing a final year university thesis on my family business The Party People. As part of it, I became aware of google launching in Australia and I simply started advertising as soon as it became available. I unknowingly became its first advertiser.
The cost was 1 cent per click. This is no joke, It’s a true story. Why? Because in a competitive bidding marketplace, in the early day’s awareness is low and people take their time to come on board. Few advertisers = Low demand = Low prices. = advertising arbitrage. It’s the digital equivalent of a gold rush. It’s not about who spends the most, but to those who arrive first reaped the rewards.
But it wasn’t just about being early once. I made it a habit to get on every new beta Google released. Product ads, location extensions, dynamic sitelinks, every single new feature gave early adopters an edge over those that had not adapted their strategy yet. Product ads again offered at 1c a click while extensions offered my ads double the real estate of my competitors’ ads just simply by having them before others realised they were available.
As competitors entered, the price went up. However, I still had the edge because as they were entering, I was refining and making my ads more efficient and effective while the new entrants were just learning. I had historical data to help me refine my strategy while they were just figuring out what the new world they had entered was all about.
Taking the Early Adopter Mindset to the Next Level
I saw the arbitrage of being early, so I took this to another level with Bing. When I caught wind of “Bing” being a platform in the USA, I contacted them and asked them if I could be their first Australia advertiser and I was told “No, we are not doing Australia yet”. A few months later I noticed they launched in Asia, so I contacted them again and again I got a “no” however this time my reply was this “Can’t I advertise in the USA and Geotarget Australia”.
Within a short period of time, they responded that it might work if I was to do it out of Singapore and before long, I was advertising with Bing Singapore geotargeting Australia and for quite some time I was the only advertiser paying 1c a click again!
A Matured Market: The Landscape Today
Fast forward to today, and it’s a different landscape. Digital advertising has matured. It’s expensive. It’s crowded. It’s a battleground where only the best offer that are the most data-driven, highly optimized, creatively refined survive.
But the underlying economics haven’t changed, just the platform.
And that’s why I believe the next major advertising frontier is already unfolding quietly in the background: AI advertising.
From Search to Generative: A Platform Shift is Coming
Search advertising has dominated digital for nearly two decades, but the winds are shifting. Platforms like ChatGPT, Claude, Bard, and others are becoming the new gateways to information and decision-making.
I heard a stat at the NORA gen Ai summit that 6 months ago 1% of product searches were done with AI, then it was 3% then 6% and now currently estimated at 10%.
We used to say “just google it”, now we are saying “just ask ChatGPT”
As our search volume shifts to AI, advertising dollars will shrink and so I cannot see any way this plays out without Ad’s appearing in AI results.
I even asked chat GPT what it thinks of my theory here and my mate Chat agrees with me.
We may not yet see traditional ad slots in AI interfaces, but they’re coming. Whether through contextual suggestions, sponsored responses, or native product integrations, advertising will find its way into generative AI because that’s where attention is going.
In fact, AI will understand our “Intent” better. It will know if we are just searching for ideas or really looking to buy.
How an ad platform will handle that which is not keyword driven but intent driven? I would suggest AI will handle that for the advertiser and optimise
for the intent.
In fact, I recently created a mock-up (pictured left) of what advertising might look like within a tool like ChatGPT complete with a branded sidebar and AI-powered product prompts. While tongue-in-cheek, the image speaks to a very real future.
The Opportunity for Retailers is Massive if You’re Early
Just as Google, Bing and Facebook offered early movers an unfair advantage in the 2000s and 2010s, AI-driven platforms will reward the next generation of pioneers.
My Advice?
- Be early when the next platform arrives
- Test, learn, and scale before the crowd shows up.
- Treat AI not just as a tool, but as a new channel of influence.
The winners in every tech wave aren’t the ones with the biggest budgets, they’re the ones who move fast, stay curious, adapt quickly and execute decisively.
At Retail Doctor Group, we help retailers not only keep pace with these seismic shifts, but predict and profit from them. We blend retail diagnostics and strategy with future-focused foresight to ensure brands aren’t just reactive, they’re out in front, where the growth happens.
So here’s my final question:
Do you believe AI tools like ChatGPT will bring out advertising? And if they do, will your brand be ready, or playing catch-up?
This article also appeared in Edition 51 of The Bugg Report Magazine
