ChatGPT's first "advertising sponsor": The process "not very AI", not give any data

OpenAI's ChatGPT advertising pilot is encountering a awkward start - the first batch of advertisers say that the technical content of the placement process is low, and they haven't received much data to prove the effectiveness of the ads. According to The Information, executives from two agencies representing early ChatGPT advertisers have said that they cannot prove that the ads have brought any measurable business results to clients. With OpenAI planning to open more advertising sales next month, this early feedback adds uncertainty to its advertising business prospects. For OpenAI and its investors, the advertising business is crucial. As of the end of February this year, ChatGPT had about 920 million weekly active users, but as of July last year, only about 5% were paying users. OpenAI predicted consumer revenue (including advertising and subscriptions) would reach $17 billion in January this year. Monetizing from a large group of free users, advertising is a key factor. "Phone + Spreadsheet + Email": A non-AI advertising transaction The ChatGPT advertising pilot was launched in early February this year, targeting free and lowest paid version users in the United States, with only a small number of advertisers included. The pricing is $60 CPM, equivalent to top-tier ad placements like NFL live broadcasts; advertisers are required to commit to a minimum advertising budget of at least $200,000. However, the purchasing process has surprised the industry. One advertising executive revealed that OpenAI has not provided any automated advertising buying tools so far, and buyers can only rely on phone calls, emails, Excel spreadsheets to communicate with OpenAI representatives - a sharp contrast to its identity as an AI company. What's even more challenging is the severe lack of ad impressions, with budget spent far below expectations. One agency executive said that despite being more than halfway through the pilot period, clients have only spent 15% to 20% of the promised budget. Data Black Box: Only Clicks, No Conversions The core problem of difficult to verify ad effectiveness lies in the lack of data. OpenAI currently only provides basic metrics such as impressions and clicks to advertisers, while mature platforms like Meta, Google can provide much richer effectiveness data like audience profiles, conversion tracking. To compensate for this shortcoming, OpenAI recently partnered with ad tech company Criteo, which focuses on retail advertising and can provide advertising buying interfaces and some targeting technology. According to sources, Criteo is promoting cooperation with advertisers with a minimum commitment of $50,000 to $100,000. However, the actual value of this partnership is doubtful. One agency executive said that OpenAI will only share limited ad targeting data with Criteo; another person who has contacted OpenAI said that the information shared by OpenAI with ad tech companies is limited to very basic data. A spokesperson for OpenAI said that currently they provide aggregate data including clicks, impressions, and spending to advertisers and partners, and anticipate gradual evolution as ad scale increases. While ad tech companies can also help through programmatic ad bidding (allowing advertisers to compete in real time to show ads to users), this does not seem very likely at the moment. The spokesperson for OpenAI stated that the company has not had any discussions with external companies about its programmatic ad bidding managed service. Expansion is imminent, but small and medium-sized brands are still being "discouraged" OpenAI is accelerating its push. According to sources, OpenAI has recently informed agencies that it will expand its advertising reach to users, planning to show ads to all U.S. users using the free and low-cost versions of ChatGPT in the coming weeks - a significant expansion compared to the trial phase. On the technical side, OpenAI plans to launch its own ad management software (Ad Manager) and is currently testing self-service tools with some partners, but has not announced a widespread rollout schedule. The company is also in talks with external ad tech companies, including The Trade Desk, to access a wider range of advertiser resources. However, one agency executive admitted that based on current experience, they would not recommend ChatGPT ads to small and medium-sized clients who cannot afford experimental budgets. Marketing personnel currently only allocate a small portion of the budget from the "unproven ad" special budget, and do not divert funds from mature channels like Meta, Google. An OpenAI spokesperson said: "ChatGPT is a trusted personalized environment for many, so we are intentionally moving slowly - starting with limited advertisers and formats, iterating as we learn." This article is reprinted from "Wall Street Seen", written by Gao ZhiMou; Translated by GMTEight - Edited by Feng Qiuyi.