Ads in AI Are Older Than You'd Think

The world of advertising is changing faster than many expected and AI is leading the charge. In this episode, I dive into the rise of advertising inside large language models (LLMs) and explore whether eMarketer’s $25 billion projection for AI-driven search ads in the next five years is really as far-fetched as some think.From Microsoft’s early experiments with sponsored links in Bing Chat, to Amazon’s push into AI-driven recommendations, to Perplexity’s twist on sponsored prompts, the landscape is already evolving in ways that could redefine how brands reach consumers. I also look at the global picture, including China’s AI commerce integration, and dig into why retail media as we know it could face an existential threat as consumers shift more of their research and buying decisions into AI-powered conversations.We’ll also explore what smart retailers and brands must do to adapt: treating AI agents as VIP customers, rethinking loyalty programs, and preparing for a world where AI dynamically generates ads in real time based on context. This isn’t a distant future, it’s happening right now.This episode is sponsored by Connected Commerce at Acosta GroupTimeline[00:00] - The $25 billion projection for AI search advertising and why it raised eyebrows.[01:00] - How Microsoft, Amazon, and Perplexity are already monetizing conversational AI.[03:00] - A look at China’s approach: super apps and commerce-first AI.[04:00] - Why retail media may lose ground as shoppers shift to LLM-driven research.[06:17] - Emerging ad formats: showroom ads and dynamic ad generation.[07:30] - Why conversational ads are proving more effective than traditional search ads.[08:00] - The playbook for retailers: making it easy for both humans and AI agents to shop.Links & ResourceseMarketer article with $25 billion AI ad projectionsMy article on this topic on the Retail Media Breakfast Club blogSubscribe to Retail Media Breakfast Club's daily newsletterFollow Kiri on LinkedIn