OpenAI is expanding its ChatGPT advertising platform to small businesses like car washes and dry cleaners, putting it in direct competition with Google and Meta in local markets, according to The Information.
OpenAI displays ads in clearly labeled tinted boxes that appear below or alongside the chatbot's organic answer, never woven into the response itself. So if a user asks ChatGPT to recommend an emergency AC repair company, the chatbot gives its organic answer in the main chat feed, while a sponsored listing from a local HVAC business appears adjacent to it. OpenAI says ads run on separate systems from the chat model and can't influence, rank, or alter ChatGPT's actual responses, a principle it calls “answer independence,” nor do ads appear near sensitive topics like health and politics. Though I imagine the “health” stance will change in the future, as that's a valuable advertising sector.
Since launching ChatGPT ads in February with big brands and a $200,000 minimum commitment, OpenAI has dropped its upfront spending requirements and rolled out a self-service ad-buying portal in the U.S. for businesses of any size. It is also introducing conversion-oriented ads, which advertisers pay for only when they get results, as well as an ad pixel and API so advertisers can track what users do after clicking, which hasn't been possible in early ChatGPT ad offerings. Advertisers who configure either the OpenAI Pixel or Conversions API by June 1 will get early access starting June 5, and conversion tracking is already live inside Ads Manager.
OpenAI has previously told investors that it expects around $2.4B in ad revenue this year, with plans to hit $102B, more than 35% of its overall projected revenue, by 2030. Of course, all that depends on whether 900M people continue to use the chatbot by then. (OpenAI projects 2.75B users by 2030, which makes their projections even more far-fetched.)
ChatGPT still leads the AI chatbot pack at 56.72% market share, but that's down from 77.43% a year ago, according to The Decoder, while Google, on the other hand, jumped from 6% to 25.46% and Claude grew to 6.02% traffic share during the same period.
