OpenAI launches self-serve ad platform
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OpenAI has launched a self-serve advertising platform, executives said, marking a significant step in its goal of generating $2.5 billion in ad revenue this year and $100 billion by 2030.
Why it matters: The new platform makes it easier for a broader set of advertisers to buy ads on ChatGPT.
- That's especially true for smaller businesses that can't afford to outsource all of their ad-buying capabilities to big agencies.
Zoom in: A beta version of the new Ads Manager tool is beginning to roll out to advertisers in the U.S., OpenAI's head of monetization Asad Awan told reporters Monday.
- Businesses can register as advertisers on the platform to launch and manage their campaigns in real time through ChatGPT.
How it works: Advertisers can create ads through the tool directly or through agency partners such as Dentsu, Omnicom, Publicis and WPP.
- The Ads Manager will also be available to several ad tech companies, such as Adobe, Criteo, Kargo, Pacvue and StackAdapt.
- With the new platform, OpenAI also announced new measurement tools to make it easier for advertisers to analyze and optimize their campaigns.
Between the lines: OpenAI has been piloting the new Ads Manager product for months, but is now expanding it after improving its capacities.
- During the pilot phase, advertisers could only buy ads on a cost-per-impression basis.
- Now, they can buy ads on a cost-per-click basis, allowing them to align their investments with a more direct performance indicator.
- Advertisers previously were required to spend at least $50,000 to test campaigns in the platform. Now that threshold is being removed, per Awan.
Zoom out: AI companies are leaning into advertising as rising infrastructure costs demand more revenue diversification.
- Firms like OpenAI will rely on ads to keep their consumer products affordable and widely accessible.
Yes, but: AI search advertising is still relatively nascent, and it isn't expected to overcome traditional search advertising anytime soon.
- U.S. AI search ad spend is expected to grow from 0.7% of all search ad revenue to 13.6% in 2029, per eMarketer.
Reality check: A lot of that growth is expected to come from OpenAI, as well as traditional search companies like Microsoft and Google, which are investing in AI-powered search experiences.
- A Reuters report in March suggested OpenAI banked over $100 million in revenue for its U.S. ad pilot after just six weeks.
The big picture: In order for the ad marketplace to grow meaningfully in the agentic era, AI platforms need to convince advertisers and users that their ad marketplaces will remain unbiased.
- Awan told reporters that ads "do not influence the core organic model" of ChatGPT and that the company holds a high bar on user privacy.
