OpenAI is racing to scale its ad business as it suffers heavy financial losses.
OpenAI has launched an ads manager to scale its advertising business.
The tool, which is reported to have a broadly similar layout to Google Ads, is in a testing phase, and is currently only accessible to a “handful of advertisers,” Digiday reported.
This development comes as a step forward in OpenAI’s race to integrate advertising into ChatGPT as it expands its capabilities. The tool will allow advertisers to monitor performance in real-time, optimising for clicks and impressions directly, without needing OpenAI or an intermediary agency.
Despite chief executive Sam Altman once describing ads as a “last resort” as a business model, this update will likely serve as critical infrastructure as OpenAI scales its advertising plans.
OpenAI recently projected it could secure $100bn in ad revenue by 2030, expecting to generate $2.5bn by the end of 2026..
These projections and developments suggest OpenAI sees advertising as the most viable path to profitability. It wants to leverage the active and engaged ChatGPT users, who are asking directly for suggestions, thus creating opportunities for advertisers to target audiences incredibly effectively.
OpenAI has previously been criticised for not offering measurement capabilities for ChatGPT ads, so this latest tool will serve as a test for selected advertisers – although the current version only supports impression-based ads.
The threshold to participating in the pilot has recently been lowered to $50,000 (down from $200,000), the Digi Day report claims – which signals that OpenAI is moving quickly to develop its ad ecosystem.
“OpenAI needs to move quickly to establish itself as a legitimate player in the ads business, so launching an ad manager early is an important step,” Debra Aho Williamson, founder and chief analyst at Sonata Insights, told Digiday.
“For example, Facebook began allowing advertisers to buy ads via a self-serve ad platform in 2007, and that wasn’t long after it started selling ads.”
With the testing phase extended and the high-intent nature of the customer base, OpenAI is signalling it will quickly develop its ad capabilities to mitigate operating losses.
