ChatGPT’s advertising business has reached a $1 billion annualised revenue run rate in less than 200 days, marking a significant milestone for OpenAI’s rapidly expanding advertising operation.
The company is now expanding self-service advertising access to businesses across India, Europe, the Middle East and North Africa, allowing more advertisers to launch campaigns without going through a managed-sales team or agency.
Ads inside the conversation
OpenAI’s advertising strategy is built around the idea that users often arrive at ChatGPT already considering a decision.
Someone might be comparing products, planning a renovation, researching a career change or evaluating different options before making a purchase. Rather than sending those users to a traditional search-results page, ChatGPT Ads are designed to appear within that conversational decision-making process.
The advertising platform initially operated through managed sales, agencies and technology partners. It has since expanded to more than 40 countries, supported by an ecosystem of more than 50 technology and measurement partners.
Opening advertising to smaller businesses
OpenAI introduced Ads Manager to allow small and medium-sized businesses to advertise without requiring a managed contract.
The self-service model is now expanding into India, Europe, the Middle East and North Africa. Businesses in those regions can create an Ads Manager account and launch campaigns without first going through an OpenAI sales team or agency partner.
OpenAI says businesses outside the US are becoming an increasingly important source of advertising revenue, with many large customers running campaigns across multiple markets.
Advertising and European regulation
The expansion of ChatGPT advertising into Europe comes alongside increased regulatory scrutiny.
The European Commission has designated ChatGPT as a Very Large Online Search Engine (VLOSE) under the Digital Services Act. The designation applies to services that meet the relevant user threshold and subjects them to additional obligations concerning systemic risks and platform accountability.
OpenAI has four months from notification to meet the additional requirements associated with the designation. These obligations include assessing and mitigating risks related to areas such as illegal content, minors, individual rights, public security and electoral processes.
The European Commission’s classification also reflects ChatGPT’s ability to search the web in response to user prompts, which contributed to its treatment as a search engine under the DSA.
Ads can use conversational context
One of the most significant aspects of ChatGPT Ads is how the system determines which advertisements are relevant.
The advertising system can examine the conversation taking place between the user and ChatGPT and use that context to select relevant advertising. Depending on the user’s country and settings, it can also use information from their broader use of ChatGPT where the user has agreed to share that information for personalisation.
This creates a fundamentally different advertising environment from traditional search.
Instead of simply targeting someone based on a search query such as “best laptops,” an advertising system operating within a conversation could potentially understand the broader context behind the user’s request and identify what they are actually trying to accomplish.
OpenAI says ads remain separate from answers
OpenAI says advertisements are clearly labelled and kept separate from ChatGPT’s responses.
The company also states that advertising does not influence what ChatGPT tells users and that advertisers do not receive access to users’ private conversations. Users can also control how their advertising experience is personalised.
These safeguards are particularly important as advertising becomes integrated into an AI assistant that users may rely on for recommendations and decision-making.
More sophisticated advertising tools
The advertising platform is also expanding beyond basic ad placement.
Cost-per-click and outcome-optimised bidding now account for the majority of campaigns, while Pixel and Conversions API integrations allow advertisers to send conversion information back to the platform for measurement and optimisation.
OpenAI has also introduced product feeds, allowing advertisers to synchronise catalogue information with campaigns. Advertisers can use geographic and platform targeting to narrow their campaigns, while custom audience tools allow businesses to target existing customer lists.
Early advertiser results
OpenAI has highlighted several examples of advertiser performance.
One ecommerce advertiser reportedly achieved a 3x return on ad spend across campaigns over a 28-day period. Separately, a technology partner claimed that more than 80% of ad-driven ChatGPT traffic came from new customers. These figures were provided by the companies involved rather than independently verified in the source.
What’s next for ChatGPT Ads
OpenAI plans to continue expanding ChatGPT Ads into additional markets while introducing new advertising formats and campaign objectives.
The company also intends to explore more native ways for businesses to interact with consumers within ChatGPT, although it has not yet provided detailed information about what those experiences will look like or when they will launch.
For now, the most immediate expansion is the availability of self-service advertising in India, Europe, the Middle East and North Africa. Businesses in those markets can use Ads Manager to launch campaigns with CPC or outcome-optimised bidding without requiring a managed-sales relationship.
The rapid growth of ChatGPT Ads suggests that conversational AI could become a major new channel for digital advertising, particularly as users increasingly turn to AI assistants not just to find information, but to research products, compare options and make decisions.
Source: https://www.artificialintelligence-news.com/news/chatgpt-ads-passes-1b-run-rate-in-200-days/
