Amazon Ads brings advertisers to ChatGPT, extending its supply-chasing streak

“Conversational ads represent the fastest growing engagement opportunity for brands to reach new and existing audiences,” said Chris Conetta, director of omnichannel supply at Amazon DSP. “The AI-driven ad experience is not just a vision of what’s to come, but an opportunity for advertisers to meet relevant users where they spend time today. With access to ChatGPT Ads, advertisers can now extend their campaigns further into where their customers are actively spending time in conversational chat platforms.”

The subtext, at least from where Amazon’s sitting, is this deal reinforces a pitch that’s been working for over a year now. Amazon Ads already undercuts rivals on fees, with its DSP often landing near zero on programmatic guaranteed deals against The Trade Desk’s historical 15 to 20% or Google’s similar cut. Pair that with first-party shopping and browsing data no other ad platform can match, and it reinforces something Amazon’s vp of ads Kelly MacLean argued earlier this year: it’s ultimately arguing that buying the best inventory its platform costs less and targets better than buying it anywhere else. 

So far, that claim has held up. Each new supply deal seems to have added weight to it, with Amazon ad spending growing — mostly on the back of more more money flowing into digital advertising broadly, though some of that growth has come at The Trade Desk’s expense. Travel advertisers, considering how people use the app for high-intent, full-funnel conversations, could be among the first to test whether that pattern holds here too. 

“Travel planning is becoming increasingly personalized, and travelers expect experiences that feel relevant,” says Katrin Koenig, president of Delta Vacations. “Through our collaboration with Amazon Ads and ChatGPT Ads, we can leverage deep consumer insights to inform how and when Delta Vacations appear within ChatGPT Ads experiences to create new opportunities for travelers to engage and discover vacation possibilities. We’re proud to be among the first brands testing this new approach and helping define what the future of AI-powered marketing can look like.”

The timing makes the deal’s real subtext sharper than it would otherwise land. Amazon Ads is expanding into ChatGT at the exact moment scrutiny over how fairly its ads business handles advertiser’s money comes into focus. The Federal Trade Commission’s lawsuit alleging Amazon duped advertisers into overpaying for inventory has produced little visible pushback from buyers. Not that it should be a surprise. After all, advertisers have shown again and again that a platform offering performance inventory can get away with a great deal.

Another month, another deal

OpenAI has made no secret of building an ads business on the back of partnerships like this. It’s already plugged in Criteo, and StackAdapt as well as cut deals with the major agency holdcos. Amazon would arguably be the biggest name yet if the pilot turns into something more permanent. Should that happen, it would push OpenAI closer to some genuinely aggressive targets. The company is reportedly aiming for $100 billion in ad revenue by 2030, a target that requires sustaining a compound growth rate above 200% a year, every year from here. 

It won’t, however, be a panacea for the trials of building an ads business under this much pressure. Impressive as OpenAI’s progress has been since it started testing ads in February, the business still has glaring issues. Measurement, clunky tech and limited ad formats sit near the top of that list. The coming could be one of the first real stress tests of how much those issues matter, but not everyone reads it that way. 

“It’d be overly generous to call Q4 a stress test for OpenAI’s ad business,” said Nate Elliott

principal analyst of AI at eMarketer. “They’re still trying to build out even many of the basics of a functional ad sales operation, including their team, technology, vendor partnerships, ad formats, and pricing. The fact that it’s Q4 might turn out to be the least influential part of how their ad business develops between now and the end of the year.”

—Tim Peterson contributed to the reporting of this article.