"OpenAI is set to wade into the advertising business this year, but its move to finally monetize ChatGPT with ad dollars may have come a touch too late. ChatGPT's 2022 launch inaugurated the current generative era and made the app a touchstone for the entire sector. But OpenAI's head start has since been eroded by rivals, the greatest of which has both momentum and experience building ad businesses."
"In case you missed it, OpenAI declared its intention to display ads against the free and budget tiers of ChatGPT in a blog post published Friday (Jan. 16), with tests beginning "in the coming weeks." Though the move was expected, it's a milestone - according to Isabel Perry, global evp of strategy at Dept., nothing less than "the start of the fourth wave of digital advertising," the first three being search, social and retail media."
OpenAI plans to display ads in ChatGPT's free and budget tiers, with tests beginning in the coming weeks and sponsored listings appearing at the bottom of responses. ChatGPT's 2022 launch initiated the generative era but competitors with established ad expertise have reduced OpenAI's early lead. Advertisers are attracted by large, engaged user bases and increasing commerce use within the app, though questions remain about pricing, measurement and ad load. Concerns include building an ads business publicly, disrupting a user experience accustomed to ad-free interactions, the chat interface's lack of repeatable inventory, and limited brand control and contextual targeting.
Read at Digiday
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