OpenAI launched an ads manager last week — the latest move in its fast expanding advertising business, Digiday has learned.
The tool — described by those with access as serviceable and broadly similar in layout to Google Ads — is a test within a test accessible to only a handful of advertisers. But it represents a meaningful step in OpenAI’s fast-expanding advertising business: for the first time, advertisers can monitor performance in real-time and optimize against impressions and clicks directly, without going back to OpenAI or an agency intermediary.
That self-serve capability matters because it’s load-bearing infrastructure for OpenAI’s broader ambitions. The company has projected that advertising could be worth $102 billion by 2030, per The Information — a target that’s impossible to hit without an ads manager. If it successfully scales beyond the test, it would represent a notable shift: self-serve is how Google, Meta and Amazon each went from controlled experiment to dominant ad platform.
“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,” said Debra Aho Williamson, founder and chief analyst at Sonata Insights. “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.”
Access to the pilot is shifting too.
“They’ve [OpenAI] also just recently lowered the minimum threshold [to participate in the pilot] to $50,000,” said one exec who has clients already in the pilot and confirmed this happened toward the end of last week.
It’s a significant drop from the $200,000 to $250,000 minimum spending thresholds that defined entry into the pilot just weeks ago. And it’s just one of a number of signals, from the arrival of David Dugan, their news ads boss to working with ad tech partners like Criteo and Smartly, that OpenAI is moving fast to establish a foothold in the ad market ahead of a planned IPO later this year.
What that means for a testing phase originally planned to run until the end of March, but already extended through the end of April, remains to be seen. Some agency buyers whose clients are already in the pilot believe it may be extended further still.
Either way, the chances are that more advertisers will likely want to test ads out on ChatGPT now that it’s cheaper to do so. When the pilot launched in January, the $250,000 minimum was a sticking point for advertisers asked to commit serious money to a platform they had limited data on. At $50,000, that barrier looks considerably more surmountable, especially since they’re only charged for what inventory actually gets bought. Which may be just as well: “performance volume is still limited,” according to the exec.
For a nascent ad platform still finding its feet, the implicit offer is hard to refuse: come in cheaper, pay for what you get.
“Charging for what you use is fair, and I think that’s a strong precedent,” they said. “They’re going to price it in a way that’s on par with the market.”
As it stands, the CPM still sits at $60, which to some, might seem a little high considering the lower $50,000 entry. The logic, though, is that ChatGPT users are in an active decision-making mindset when they see an ad — closer to high-intent search than passive social browsing — and OpenAI is trying to price it accordingly.
“I think they need to hold $60 CPM through the test so they can do calibration,” said the exec. “If they change the CPM partway through the test, it would mess up how they’re looking at it.”
The urgency to build out an ad business this quickly is already reflected in how OpenAI is thinking about the longer-term opportunity. Six weeks into the test and it already recorded a $100 million annualized revenue, per Reuters.
Explaining why OpenAI is moving so quickly, Karsten Weide, principal and chief analyst at W Media Research said OpenAI is “desperate for money.”
“They [OpenAI] are expected to lose $14 billion this year alone, so anything that can support the top line, they will pursue,” he said, referencing OpenAI’s own projections.
The quiet arrival of the ads manager is the clearest indication yet that OpenAI is building the ad tech stack it’s currently borrowing. Partnering with ad tech platforms like Criteo enables OpenAI to access a swath of advertisers quickly, and potentially to introduce different ad formats down the line while they’re building out the foundation themselves from the ground up.
OpenAI did not respond to Digiday’s request for comment.