Marketers join OpenAI’s ad pilot, nudged by FOMO

A spokesperson for The Knot declined to share specifics regarding its pilot and early results. DSW said it was too early to provide findings.

Early learnings: Fundamentals are crucial

Seemingly, marketers are placing their bets anyway as more people research and shop for products on LLMs. At least 55% of shoppers say they turned to AI for shopping inspiration and ideas, per Adobe’s recent AI traffic report. There’s also the promise of ChatGPT ads: target billions of users during high-intent research moments, where they’re more likely to make a purchase. The AI platform recently reported more than 900 million weekly active users, and more than 50 million consumer subscribers.

“We want to be able to build some of those capabilities now so that when it is here, we’re ready to be proactive, we’re on the offense of it and we’re not trying to catch up,” said Andy Lopez, head of marketing at BEHR.

While brands scramble to get in on early AI search, agency experts say establishing a GEO (generative engine optimization) may be more beneficial than buying ChatGPT inventory.

“Running ads — which is at the moment, is essentially display ads, or some type of ads alongside the answers — I don’t think is an absolute must or anything which brands need to overpay for,” said Joseph Levi, CEO at Noise Media Group.

The test-and-learn is worth it as the search landscape continues to shift, marketers say. It’s less a matter of how good OpenAI’s ad product is and more a matter that it exists, putting marketers who participate at the forefront of the new AI search frontier. 

For example, DSW wanted to pilot OpenAI’s ad offering as a potential new customer acquisition channel, said Kelly Ballou, vp of brand and creative for North American retail at Designer Brands Inc (DBI). DBI is DSW’s parent company.

“Maybe it won’t work for us, and maybe it won’t be right, but I bet we’ll learn something that we can apply somewhere,” she said. 

OpenAI ramps up advertising

Marketers are struggling with the anxiety of exclusion and OpenAI has the numbers to prove it. 

Within six weeks of launch, OpenAI’s ChatGPT ads pilot in the U.S. crossed the $100 million annualized revenue mark, according to Reuters. 

The tech behemoth has spent the time since its launch rolling out updates faster than marketers can keep up with. First, it launched an ads manager to a subset of advertisers, allowing them to monitor performance in real time, optimize against impressions and clicks directly all without doubling back to OpenAI or an agency middleman. Then, the AI company started working on a conversion tracking pixel — the ad measurement infrastructure it needs to compete for performance budgets. OpenAI also turned on cost-per-click ads inside ChatGPT.

Ad prices too have come down from $60 at launch nine weeks ago to as low as $25 now.

Will ChatGPT’s ads business be successful?

Rather than selling impressions, Mike Feldman, svp of commerce at Flywheel, said marketers may be more inclined to buy ChatGPT’s data as a service solution. 

“I want to optimize my GEO (generative engine optimization) and things like that, but I think that’s a game you win through organic, not paid,” he added.

GEO is where Georgia-Pacific is instead putting its efforts, according to Laura Knebusch, senior vp of marketing and customer experience at Georgia-Pacific consumer products. “Before we even try and put [ads], advertise in these spaces, let’s make sure we have a consistent understanding of how do our brands show up today across the different LLMs,” she said.