🔥👇 Check out Nate Elliott's astute analysis of our data on ChatGPT's ads — and then join us at POSSIBLE Miami later this month for a special co-branded happy hour with EMARKETER 🥂
OpenAI isn't simply running an advertising pilot -- they've already gone all-in on their ad business. It's been less than two months since ChatGPT ran its first ads, and the evidence points to a full-on launch rather than the test-and-learn approach OpenAI had announced: 1. They're expanding daily. Sensor Tower data shows that OpenAI has added advertisers every single day for more than six weeks; ChatGPT ran ads from 4x as many advertisers in week 6 as in week 1. OpenAI announced it now has more than 600 advertisers. 2. They're bragging about revenue growth. OpenAI announced they've already reached $100m in annualized revenue. One way they got there: showing ads to 50x more ChatGPT users in week 6 than in week 1. 3. They're only running one ad format. Reports show ChatGPT ads following a strict format and appearing in the same location -- rather than OpenAI testing different formats in different positions to identify which work best for advertisers and users. 4. They're bringing adtech partners online. OpenAI signed a deal with Criteo on March 2 and apparently brought it live just two weeks later. They've also announced a partnership with Smartly and are reportedly talking to The Trade Desk. 5. They're expanding internationally. OpenAI announced they're launching ads in Canada, Australia, and New Zealand in "the coming weeks," with further plans to launch in other markets as well. If OpenAI were trialing ads, their goal would be testing and learning, not non-stop growth. And let's be honest, there's plenty they still need to learn. We're hearing advertiser concerns such as: a. Low clickthrough rates. One client reported seeing just 0.9% CTR on ChatGPT ads vs 6.4% CTR on the same category in Google search; we've heard similar stories elsewhere. b. Inconsistent pacing. OpenAI requires a large minimum spend from advertisers, but one marketer reported that after several weeks in the trial, only 3% of their $250k budget had been spent. c. High prices. Several reports indicate OpenAI is asking for $60 CPMs; we've had advertisers tell us they were quoted even more than that. d. Basic measurement. Sources say OpenAI only provides ad reports weekly via CSV, and that those reports only include rudimentary metrics. OpenAI will fix these problems -- but that requires time and testing. Even ad powerhouses like Google and Meta took years to get their ad formats, pricing, targeting, measurement, and technology right. OpenAI is attempting to figure all of this out at the same time, and in a matter of weeks. As always, OpenAI appears to be sprinting full speed ahead and betting it can figure everything out on the fly. Join EMARKETER and Sensor Tower at our happy hour during POSSIBLE to dig into these trends further. Registration link in the comments. -- Thanks to Ian Simpson and the Sensor Tower team for providing the chart data, and to Henry Powderly for pulling it into a chart.