In today's internet era, AI technology is becoming increasingly widespread. How to make AI products profitable has become an important challenge for startups and developers. A startup called Koah recently raised $5 million and plans to solve this issue through advertising.

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Nic Baird, co-founder and CEO of Koah, said in an interview with TechCrunch that although many people have seen various AI-generated ads online, they rarely see these ads when interacting with AI chatbots. He believes this phenomenon will inevitably change.

Baird pointed out that as AI products become more popular, especially when they expand beyond the United States into global markets, the ways to monetize them will become increasingly limited. He mentioned that early consumer AI products mainly targeted "more affluent professional users," generating revenue through subscription models. However, it is now possible to develop AI applications that can reach millions of users in regions like Latin America, who often cannot afford a $20 monthly subscription fee. This poses a challenge for developers to generate sufficient subscription revenue.

Koah aims to provide a monetization solution for these AI applications through advertising. Baird said that by effectively introducing ads into AI chats, Koah can help "emotion-driven" applications that might otherwise require significant funding to operate, unlocking more potential.

Currently, Koah has already placed ads in multiple applications, including the AI assistant Luzia, parenting app Heal, student research tool Liner, and creative platform DeepAI. Advertisers on Koah include UpWork, General Medicine, and Skillshare. All ads are marked as sponsored content and appear at relevant moments during user chats. For example, when a user asks about business strategies, Koah may display an ad from UpWork to help the user connect with freelancers.

Although some publishers believe that ads in AI chats are not very effective, Baird said that Koah's click-through rate is as high as 7.5%, four to five times that of traditional ad tech companies like Admob and AppLovin, and early partners have already earned $10,000 in their first month.

In addition, Koah's seed round was led by Forerunner, with Andrew Karam, co-founder of South Park Commons and AppLovin, participating. Nicole Johnson, a partner at Forerunner, said when talking about the investment, monetizing AI has always been a focus for creators and investors, and advertising will become an important part of this field.

Baird also mentioned that AI chat is located in the middle of the purchasing funnel in the advertising ecosystem. Users usually get recommendations in chats and then go to Google to search for purchases. Therefore, Koah's challenge is how to capture users' commercial intent and present relevant ads to them.

Key Points:  

📈 Koah raised $5 million and is committed to helping AI applications achieve profitability through advertising.  

💡 Koah has already placed ads in multiple applications, with a click-through rate as high as 7.5%.  

🔍 The company is exploring how to effectively capture users' commercial intent and deliver relevant ads to them.