News & Insights

Digital Dive: January 2023

By Alyssa Carino

The Digital Dive - Digital Intelligence Newsletter.

The Big Story

Microsoft’s Multibillion Dollar Investment in OpenAI

Microsoft has recently announced its “multiyear, multibillion-dollar” investment in OpenAI, the artificial intelligence lab behind the online chatbot ChatGPT. It’s been reported that Microsoft would invest $10 billion into the company to continue their efforts of advancing generative artificial intelligence technologies. This is not a new partnership as Microsoft’s CEO, Satya Nadella, decided to take a gamble on the AI company years ago. The gamble is certainly looking good as it’s said that these technologies can remake everything from online search engines like Google Search to digital assistants like Apple’s Siri and even image editors like Photoshop.

Many of us have heard of ChatGPT, which came out at the end of last November and took the internet by storm for its cutting-edge chatbot functionalities. However, OpenAI has been around since 2015. It was created by a small group of entrepreneurs and artificial intelligence researchers including Sam Altman, Elon Musk and Ilya Sutskever. Their main goal was to create artificial generated intelligence that could do anything a human brain could do.

Originally a nonprofit organization, Altman decided to remake OpenAI as a for-profit company, after Musk’s departure in 2018, to raise its much-needed capital for research. Over the next couple of years, Microsoft quietly invested billions of dollars into the company to fund the enormous amounts of computing power required to build this specific kind of generative AI technologies. With the help of this funding, OpenAI has created three milestone AI functionalities:

  • GPT – 3: A large language model that can generate text on its own such as tweets, blog posts, news articles and even computer code.
  • DALL – E: Deep learning model that generates photorealistic images by describing what you want to see.
  • ChatGPT: A variant of GPT-3’s model that is specifically designed for chatbot applications.

Microsoft has already incorporated some of these technologies into their own products. Microsoft’s GitHub, the online service for programmers, offers a tool called Copilot that helps programmers by automatically generating snippets of computer code like the autocomplete tool suggestions in emails or texts. They have also expanded some OpenAI services to customers of their Azure cloud computing offering, which is expected to boost revenue for Microsoft.

In the digital space, Microsoft’s investment strongly equips them to compete with Big Tech competitors like Google, Amazon and Apple, who are also urgently working towards AI advancements. For the first time in over two decades, Microsoft has a huge technological advantage by being at the forefront of generative artificial intelligence from this partnership. Many of these companies have been reluctant to release similar technology in the past due to flaws like toxic content and misinformation that could be risky to brands. However, the release of ChatGPT and this extended partnership has started to light a fire under competitors. Tech giant Google has been reported to jumpstart AI development because of this with plans to release new products and demonstrate a chatbot feature into their search engine this year.

With Microsoft’s heavy funding and OpenAI’s cutting edge AI technology, it seems that the sky is the limit for this partnership. The potential technological advancements will drastically change the digital landscape and our own experiences online and with technology.

Social Updates

The Twitter Tribulations: Part 3

The struggles for Twitter only seem to continue as it’s been reported that they are down 40% in advertising revenue compared to last year. Since Elon Musk’s takeover, more than 500 of the platform’s top advertisers, including Omnicom and Interpublic Group, pulled back from spending due to the platform’s new, risky environment. This decline to its advertising business puts Twitter at risk for major losses in 2023. If this is the case, there is a good chance that Musk will take further cost-cutting measures that could end up affecting the everyday Twitter user.

Twitter Rolls Out Search Keywords Ads to All Advertisers

In the midst of their revenue issues, Twitter has announced a new ad unit available to all advertisers called Search Keyword Ads. This new ad unit allows advertisers to promote sponsored tweets in the Twitter Search Results by targeting specific keywords. This not only opens a wider audience for advertisers, but also provides them with an audience of higher intent. Advertisers will now be able to show relevant ads to users who are searching specifically for those keywords, creating a greater chance that a user will engage or click on their ad. According to sources, Twitter plans to expand Search Keyword Ads to other advertising objectives in the future.

TikTok is “Heating” Up

TikTok, known for its strong algorithm behind users’ “For You” pages, apparently has another tactic causing videos to go viral. According to several current and former employees of TikTok and parent company, ByteDance, staff members play a hand in making content go viral through a process called “heating.” Heating is an internal practice that boosts chosen content’s distribution into users For You pages through operation intervention. According to the MINT Heating Playbook, “the purpose of this feature is to promote diverse content, push important information, and support creators.” Sources have reported that TikTok will use this technique to sway influencers and brands into partnerships by inflating their content’s views. It’s also been reported that employees have abused this power to “heat” content of their own or from individuals who they have personal relationships with. Although this is certainly not the first time that a social giant has engaged in amplifying chosen content, TikTok has never publicly disclosed the use of this method and also does not clearly label content that is heated. It will be interesting to see how the revelation of this will impact TikTok’s ongoing negotiations with the CFIUS regarding the app’s Chinese ownership.

Digital Updates

Round Two: Google vs U.S. Justice Department

For the second time in just over two years, the U.S. Justice Department filed another antitrust lawsuit against Google. The lawsuit, which aims to break up Google’s advertising business, is the first action against the company under Biden’s administration. Eight states have also joined forces with the DOJ against Google.

This action from the DOJ is not surprising considering Google has long worn a target on its back due to its advertising dominance. Google’s advertising platform functions on all sides of the market including buying, selling and its ad exchange. The DOJ argues that Google purposely planned this with the intention of becoming “the be-all, and end-all location for all ad serving.” Furthermore, the DOJ stated, “Google would no longer have to compete on the merits; it could simply set the rules of the game to exclude rivals.”

The DOJ has several strong arguments fueling their case:

  • Google’s alleged monopoly prevents the benefits that would come from a more competitive market like lower costs and the creation of new, innovative ad tech tools.
  • Google strategically acquired companies to grow its advertising dominance, like with the purchase of publisher ad server, DoubleClick, which would become part of Google’s AdX. This move lets Google require publishers in some instances to solely use their tools for the online ad-buying process.
  • Google acquired potential competitive threats to eliminate them completely. Yield management tools, like AdMeld, helped publishers find better prices for their inventory in real time outside of Google’s ecosystem. As a result, Google acquired AdMeld, then changed its AdX contracts to restrict publishers from using other platforms allowing its own exchange to compete with others in real time.
  • Google shut down “header bidding,” which gave other ad exchanges first dibs on certain publishers’ inventory. To combat this, Google created “Open Bidding,” which forced publisher and ad exchange participants to give them visibility into their auctions.

Trade Desk Introduces Galileo

At CES earlier this month, The Trade Desk announced their centralized tech hub, Galileo. With Galileo, marketers have an easily accessible center to all of the DSP’s features like the onboarding of data, frequency capping, and layering on additional data sets for measurement in one first-party data hub. This streamlines the process, which previously had to all be done separately. Galileo will be a huge tool for marketers looking to activate against their own first-party data sets as the industry continues to move away from the third-party cookie.

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