Marketplace Morning Report

Episode Summary: How AI is changing the advertising game

Date: February 16, 2026
Host: Nova Safo (for David Brancaccio)
Key Segment Guest: Gil Luria, DA Davidson
Reporter: Sabri Benishore

Overview of Episode Theme

This episode explores how artificial intelligence (AI) is beginning to disrupt online advertising, altering both the strategies of advertisers and the way users experience ads. The conversation covers the implications for advertisers, agencies, and consumers as AI-driven search and chatbots change internet behavior. Additional briefings touch on the current inflation landscape and global markets.

Key Discussion Points & Insights

1. Current Inflation and Consumer Outlook

Speaker: Nova Safo and Lauren Seidel Baker, ITR Economics

• Encouraging inflation data:
  • January’s Consumer Price Index (CPI) rose at a lower-than-expected 2.4% annual rate, cooling inflation concerns ([00:24]-[01:03]).
• Consumer impact remains significant:
  • "This is just saying that prices are rising by a slower amount than had been expected. So there still is a lot of strain across certain ends of the income spectrum."
    —Lauren Seidel Baker ([01:03])
• Energy sector details:
  • Gasoline prices have fallen more than 3%, mainly due to shifts in the global oil market.
  • Electricity costs are rising, driven by demand from AI data centers and electrification.
    • "Electricity costs are much higher due to the electric purification of just about everything and all of that AI investment."
      —Lauren Seidel Baker ([01:44])
• Tariffs may bring renewed price increases:
  • Some companies plan to raise prices again after the holiday pause due to higher tariffs.
  • This could mean continued financial pressure for households ([02:12]-[02:48]).

2. How AI Is Changing Online Advertising

Host: Sabri Benishore
Guest: Gil Luria, Head of Technology Research, DA Davidson ([03:45]-[07:03])

a) Traditional Model Disrupted by AI Chatbots

• Historically, users searched via Google, saw ads, clicked links, and encountered more ads.
• Now, with AI-powered chatbots, users ask questions directly—limiting ad exposure:
  • "Now we're throwing a wrench into all of that and saying actually people aren't interacting with the web in the same way they used to..."
    —Gil Luria ([04:18])

b) AI Platforms Are Testing Advertising Models

• OpenAI and Google (Gemini) are experimenting with ads in their free chatbot offerings.
  • "We will have ads within the free tiers of ChatGPT and Gemini. That's almost a certainty because they need to pay for it somehow."
    —Gil Luria ([04:55])
• The challenge: Balancing the need for ad revenue with maintaining good user experience.
  • "They need to make sure consumers are comfortable. Otherwise consumers will use their chat less."
    —Gil Luria ([05:18])

c) AI as a Tool for Advertisers

• Dramatic acceleration of campaign development:
  • "What AI now allows you to do is create campaigns a lot faster, both the visuals and the copy... you can actually create multiple versions, test them all, evaluate them and then pick the ones that work within hours or days instead of within weeks..."
    —Gil Luria ([05:36])
• Greater efficiency and flexibility mean advertisers can be more adaptive.

d) Impact on Advertising and Marketing Agencies

• Agencies that use AI effectively will outperform those that do not.
  • "People that use AI well will replace people that don't use AI well."
    —Gil Luria ([06:24])
• The industry is poised for a shift: agencies unwilling to adapt risk obsolescence.

Notable Quotes & Memorable Moments

• On the persistent strain of inflation:
  • "There still is a lot of strain across certain ends of the income spectrum."
    —Lauren Seidel Baker ([01:03])
• On the seismic change in online ad models:
  • "We're throwing a wrench into all of that... completely different type of interaction that you are all going to have to adjust to in terms of what ads you present, how you present them, how you pay for them, how much you pay for them."
    —Gil Luria ([04:18])
• On AI’s potential in ad creation:
  • "You can actually create multiple versions, test them all, evaluate them and then pick the ones that work within hours or days instead of within weeks..."
    —Gil Luria ([05:36])
• On AI adoption as a survival skill for agencies:
  • "People that use AI well will replace people that don't use AI well."
    —Gil Luria ([06:24])

Timestamps for Key Segments

• [00:24] – [02:51]: Inflation update with Lauren Seidel Baker
• [03:45] – [07:03]: Main segment – How AI is changing the advertising game, interview with Gil Luria
• [04:05]: Start of advertising discussion
• [04:18]: Gil Luria on disruption in ad model
• [04:55]: Gil Luria on ads in AI chatbots
• [05:36]: Gil Luria on AI as a tool for campaign creation
• [06:24]: Gil Luria on who wins in the AI ad agency landscape

Episode Tone & Language

The discussion remains brisk, informative, and accessible, matching the fast-paced, business-focused style of the Marketplace Morning Report. Gil Luria’s commentary is concise, insightful, and rooted in practical implications for businesses and consumers.

Summary

This episode provides a fast yet thorough update on a rapidly changing digital landscape. Inflation cools, but consumer pressure persists, especially with potential tariff-driven price hikes on the horizon. The heart of the episode is an analysis of how AI threatens traditional online advertising but offers powerful tools for those willing to adapt. Agencies and advertisers who embrace AI stand to benefit; those who resist risk extinction. Both consumers and businesses face a new era, with comfort, creativity, and adaptability as the keys to survival.