Generative Engines (GEs) such as ChatGPT and Google's AI Overviews are rapidly reshaping search economics by delivering synthesized responses that allow users to bypass third-party websites, cutting those sites' advertising revenue. Yet this shift also leaves GEs facing their own monetization problem: whether to insert ads into synthesized responses or keep them ad-free to drive subscription conversions. In this paper, we introduce a dynamic framework to study this problem, which captures how query-level design choices shape user engagement, retention, and subscription conversion over time. Using this framework, we show that the optimal policy follows a cutoff rule: ads should only be shown to users only when the immediate ad payoff exceeds the long-term value of providing ad-free responses. This cutoff shifts toward with-ad responses when i) ad revenue is high or ii) users are less sensitive to ads, and toward ad-free responses when iii) subscription conversion becomes relatively more valuable. In addition, the presence of rival GEs shifts the optimal policy further toward ad-free responses, as ad-heavy monetization becomes less sustainable when users can freely switch to alternatives. Our findings reveal incentives for real-life generative engine providers to adopt designs that enhance user experience and long-term sustainability.

翻译：生成式搜索引擎（如ChatGPT和Google的AI概览）通过提供合成回答使用户绕过第三方网站，从而切断这些网站的广告收入，正在迅速重塑搜索经济学。然而，这种转变也使得生成式搜索引擎自身面临商业化难题：是在合成回答中插入广告，还是保持无广告以推动订阅转化。在本文中，我们提出一个动态框架来研究该问题，该框架刻画了查询层面的设计选择如何随时间塑造用户参与度、留存率和订阅转化。利用该框架，我们证明最优策略遵循截断规则：仅当即时广告收益超过提供无广告回答的长期价值时，才应向用户展示广告。当（i）广告收入较高或（ii）用户对广告不敏感时，截断点趋向于包含广告的回答；而当（iii）订阅转化相对更有价值时，则趋向于无广告的回答。此外，竞争性生成式搜索引擎的存在进一步促使最优策略偏向无广告回答，因为当用户可自由切换至替代引擎时，重度广告变现模式的可持续性降低。我们的发现揭示了现实中生成式搜索引擎提供商有动机采用增强用户体验和长期可持续性的设计。