OpenAI’s introduction of advertising to ChatGPT was the most-anticipated industry launch since Netflix debuted its ads tier.
How’s it going? Slowly.
The pilot began on February 9 and was initially set to finish at the end of March, with some brands promising to spend at least $200,000 to take part. Advertisers and agencies tell me OpenAI has spent very little of some brands’ budgets so far.
It’s left advertisers wondering, “When is ChatGPT going to start spending my money?” Phillip Thune, CEO of Adthena, told me. Adthena, a search intelligence platform, works with more than 50 clients and agencies who are participating in the trial.
That said, Will Swayne, an exec at Dentsu, told me that ad volume is increasing week over week and that he was “pleased with early performance signals.” He said the agency wants more ways to customize ads.
The ChatGPT ads seen in the wild so far have been fairly innocuous — clearly labeled cards with “sponsored” labels. A user comparing smartphones might trigger a Best Buy ad. An Expedia ad could pop up for someone looking for last-minute weekend getaways. The research company Sensor Tower found that more than 100 brands had advertised on ChatGPT so far, with 44% of them being retail companies.
OpenAI sends advertisers weekly reports in a CSV file format — no logins or access to real-time information like the sophisticated ad platforms they’re used to. A subset of advertisers is testing a self-service portal that will be made more broadly available later, an OpenAI spokesperson said.
Beyond the cachet of being among the first advertisers on ChatGPT, advertisers participating in the trial hope that prominent placements will become a major driver of customers to their sites. Best Buy’s CEO, Corie Barry, mentioned it’s among the early testers of ChatGPT ads on the company’s earnings call last week, and said it’s “exploring more opportunities to enhance our shopping experience with OpenAI.” Target, also part of the pilot, said in February that traffic to its website from ChatGPT was growing 40% on average each month.
Jill Pavlovich, SVP of digital customer experience at Albertsons, told me the retailer was interested in hopping on board the ChatGPT ad train because it offers something new beyond traditional interruptive advertising. It’s a place for brands to be helpful.
“Consumers are not passively scrolling,” she said. “They are asking questions, planning meals, managing budgets, thinking about health goals, or organizing their lives.”
Though some advertisers want OpenAI to move faster, it makes sense that the company is taking a careful approach.
Ads pose a reputational risk for OpenAI at a time when it’s also facing consumer backlash over its government contracts. At launch, the company went to great lengths to emphasize that ads wouldn’t conflict with its core values and that sponsored answers wouldn’t influence its organic results.
The OpenAI spokesperson said that testing is still early and the company is being thoughtful and deliberate about how to scale the advertising program, given that ChatGPT is a trusted and often personal environment for users.
Still, OpenAI’s ad rollout feels remarkably subdued, especially for a company whose CEO predicted that AI would automate 95% of what advertising pros do.