Ryan Hudson has spent years trying to solve the advertising problem.
Hudson, the co-founder of shopping browser extension Honey Science Corp., spent much of his career in the ads sector. His father was involved in advertising at Chrysler Corp., which is now known as Stellantis following the 2021 merger between Fiat Chrysler and Peugeot maker PSA Group.
Hudson participated in a college internship at BBDO Detroit, a now-defunct advertising agency firm that worked closely with Chrysler. When Hudson was bootstrapping Honey – which sold to PayPal Holdings Inc. in 2020 for around $4 million – he took a product manager role at Pasadena-based ad tech firm OpenX. He also spent around a year at the El Segundo-based Los Angeles Times trying to figure out how to make money as the paper settled into a digital-first strategy before getting laid off.
“I guess I had not saved the day and figured out how a local advertising-supported business transitioned to the digital world,” Hudson said.
In late August, Hudson announced that his next advertising venture, ZeroClick, launched with $55 million in funding. Santa Monica-based Anthos Capital, Protagonist and Anfa – who previously backed Honey – are among the investors to participate in the funding round.
“The cool thing about how these AI systems work is that it becomes the final context filter for a user,” Hudson said. “If it’s not relevant, it doesn’t include it in the results.”
ZeroClick is tapping into contextual advertising, a new kind of strategy borne out of generative artificial intelligence platforms.
Advertisers like Walmart Inc., Amazon.com Inc. and Target Corp. are able to use platforms like ZeroClick to get AI to seamlessly integrate advertising into their generated answers, thus creating new opportunities for advertising. Software-as-a-service platforms, for example, spend tens of thousands of dollars on sales teams that push the product.
“Part of the reason is that you can’t, as a SaaS company, reach decision-makers with Google search ads. They’re not going to search ‘hey I need a new SaaS tool,’” Hudson said. “But there are so many AI workplace integrations. You could imagine that your meeting summarization AI tool could be ad supported, and in that context, (shares) this new SaaS tool from this provider that is cheaper than the one that has a salesperson selling it to you.”
ZeroClick was born out of Pie Adblock, an adblocker Hudson built with other veterans of Honey that encouraged users to say yes to advertising they found effective and helpful. The adblocker quickly accumulated around 2 million users, and the company began developing a contextual ad system that eventually was rendered undeployable by Google.
“We had a reset moment of thinking about who we were and what we were trying to do,” Hudson said, “and realized we built effectively the core plumbing for an ad system that would work really well in an AI environment.”
Though the AI-native contextualized advertising model is still in its infancy, several companies are experimenting with what could upend Google’s paid search links as the king of advertising. San Francisco-based Kontext raised $10 million in early August to help clients like Uber Technologies Inc. and Amazon.com, run ads under AI chatbot responses. In July, Utah-based Scrunch AI raised $15 million to help brands leverage AI search results.
“Discovery is shifting to AI agents,” Chris Andrew, the chief executive and co-founder of Scrunch AI, said in a statement. “They don’t scroll, browse or click through navigation. They compress, summarize and respond. If your content isn’t structured for how they work, it won’t show up.”
Google expanded its AdSense arm into AI chatbot conversations back in April.
Dailymotion Advertising, the video marketing arm of the Dailymotion video platform, launched an ad format that would allow brands to converse with audiences in real-time from their video ads.
“For too long, brands have been talking at consumers,” Hamza Kourimate, the chief marketing officer at Dailymotion, said in a statement. “The real promise of generative AI isn’t just faster content creation – it’s the ability to build genuine dialogue.”
For Hudson, the goal is more personal. When he worked at the L.A. Times, advertising platforms on Facebook and Google severely restricted what audience data the paper was able to see, making it difficult to determine what ads the company should run and which demographics it could target.
“(Facebook) could have put those Instagram ads into different formats that would help support journalism or other web-use cases, but they decided not to,” Hudson said. “What if we had this layer and it wasn’t part of one (platform’s) world? The chance to build outside of that feels pretty cool. That’s why I want to win, so that we can help everybody else build stuff that can’t exist otherwise.”
Keerthi Vedantam
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