As OpenAI's ChatGPT ad delivery improves, the doubts it created aren't so easily fixed

Advertisers approached OpenAI’s ad pilot as a long-term bet, but early results were difficult. Since the pilot began in February, campaigns reportedly delivered far fewer impressions than targeted, leaving budgets unspent and performance hard to justify. One agency spent $2,500 of a $250,000 commitment over four weeks and reached about 200 clients. Others reported that ads produced almost no activity for nearly a month because available inventory was extremely limited. At a programmatic summit, attendees said OpenAI could only deliver around $100 per client per week until inventory expanded around mid-April. Some criticized the pilot’s structure, noting that fewer than 10% of eligible inventory participated and that minimum spend commitments set unrealistic expectations. Supply is starting to improve.

"Since the pilot launched in February, advertisers have reported chronic underdelivery - campaigns falling well short of their targeted impressions, leaving budgets unspent and results hard to justify, according to several ad execs, who all asked to remain anonymous due to the sensitivities around the test."

"One of them spent just $2,500 of a $250,000 commitment over four weeks, receiving 200 clients in the process. The others described similar experiences, with another agency exec saying that when their first ads went live in February, almost nothing happened for close to a month. The inventory was, to put it plainly, barely there."

"A senior exec from a major agency told Digiday that OpenAI could only push through roughly $100 per client per week until supply began opening up around mid-April. In a town hall session, attendees were more blunt. "I think they got revenue blind and did a lot of things before they were ready," said one. Another put the problem in structural terms "Less than 10% of the eligible base was part of the pilot. We just had massive scale issues in general.""

"The $250,000 minimum commitment didn't help. For all that OpenAI's ad reps were clear that the money should come from innovation budgets - funds set aside for tests that don't need to deliver an immediate return - the number itself set expectations that the inventory was never going to meet. One agency in the pilot from the start called those minimum spend commitments "smoke and mirrors in hindsight. There was never enough inventory at launch to absorb that level of spend.""

Read at Digiday