OpenAI's Next Advertising Strategy: A Small Investment for a Big Return

```

OpenAI is shifting the focus of ChatGPT’s advertising business from large brands experimenting with the platform to small and medium advertisers who rely more on performance conversion. This adjustment indicates that the company aims to broaden its revenue sources with lower barriers and more measurable ad products, accelerating its catch-up with mature ad platforms like Meta and Google.

According to The Information, OpenAI has informed some advertisers that starting this week, it will allow testing of conversion-oriented advertising formats. Advertisers will only pay when they get actual results, such as completed purchases, bookings, or contact form submissions.

This move is especially critical for investors. OpenAI sees advertising as a key monetization path to activate its 900 million weekly active users, the majority of whom use the free version of ChatGPT. The company has told investors that it expects ad revenue to reach $2.4 billion this year, about four times that amount in 2027, and to rise to $102 billion by 2030, accounting for more than 35% of total revenue.

However, OpenAI’s challenges are equally clear. Meta and Google have long built huge ad businesses by relying on small and medium advertisers, while OpenAI is still catching up with foundational tools, including conversion tracking, merchant data integration, and helping advertisers understand the specific ad context within ChatGPT conversations. Whether the ad business can scale quickly may affect OpenAI’s attractiveness to capital markets ahead of a potential IPO.

From Big Brands to Local Merchants: OpenAI Lowers the Bar for Ads

When OpenAI initially launched ChatGPT advertising, it was mainly targeted at well-known brands with big budgets, such as Adobe, Ford, and Target. Reportedly, OpenAI organized a group of major advertisers through large ad agencies, with a minimum commitment of $200,000 for early experiments.

Now, OpenAI is expanding its target to advertisers with smaller budgets who care more about ROI. A person familiar with discussions with OpenAI executives revealed that OpenAI’s leadership told external ad tech companies that one of the current priorities is attracting small local businesses, such as car washes or dry cleaners.

This strategy shift is accompanied by a lower purchase threshold. It is reported that early this month, OpenAI began rolling out a self-serve ad buying portal in the US, available to both SMEs and major brands, with no minimum spend required. At the same time, several external companies cooperating with ChatGPT advertising have also dropped their minimum spend requirements.

For OpenAI, this means its ad business is shifting from “brand display experiments” to a model closer to mainstream digital ad platforms. For the market, the key question is: can ChatGPT ads convert early click-through rates driven by novelty into sustainable ad budget migration?

Performance Ads Go Live, Closing the Conversion Tracking Gap

This time, OpenAI’s main push is conversion-oriented ads. According to an agency executive, these ads aim to prompt consumers to take specific actions, such as purchasing goods, booking services, or submitting contact information—advertisers only pay when they get real results.

To test these ad campaigns, advertisers must install an OpenAI-provided ad pixel on their websites. This pixel is a piece of website code used to track user behavior after clicking on the ad. While pixels are common in ad tech, they are not fully reliable, as browsers or ad blockers may sometimes block them.

OpenAI also encourages advertisers to connect their internal systems to the recently released application programming interface. This API enables advertisers to send back user behavioral details from their own websites, helping OpenAI verify whether the ad produced real results.

This enhancement is significant. Reportedly, one of the main complaints about OpenAI’s early ads was that marketers lacked basic measurement tools, making it hard to tell whether ChatGPT ads were actually effective. This is especially important for smaller advertisers who typically care more about measurable results than broad brand exposure.

An OpenAI spokesperson stated that over time, the company expects to support more ways to help advertisers optimize for the results they care about most.

Expanded Ad Tech Partnerships: OpenAI Leverages External Strengths

OpenAI is in intensive discussions with external ad tech companies about collaboration. One focus is helping advertisers better understand the context in which ads will appear in chats, thus reducing concerns about new ad formats.

Reportedly, OpenAI ad executives participating in these meetings include Dave Dugan, Benji Shomair, Vijaye Raji, and Asad Awan. Dave Dugan joined OpenAI in late March to lead ad sales; all previously worked at Meta for a considerable time.

OpenAI previously relied primarily on its own sales team to serve early ChatGPT advertisers, but it quickly broadened scope by collaborating with external companies like Criteo and StackAdapt. These companies help their own clients purchase ChatGPT ads and provide capabilities OpenAI still lacks, such as technology to match ads with relevant users.

Some ad buying companies have started purchasing ads through external firms rather than directly from OpenAI, partly because external firms offer additional functions. Deanna Cullen, VP of Media Investment at Wpromote, said that partnership could bring possibilities like deeper data integration, business experience, or richer creative advertising.

However, the partnership model might also affect the final ad budget OpenAI receives. The financial details of OpenAI’s ad partnerships remain unclear, including whether OpenAI pays for distribution or what fees ad buyers must pay intermediaries. Even if OpenAI does not pay partners directly, fees paid to intermediaries by advertisers may ultimately reduce the total budget flowing to OpenAI.

Product Feed Ads May Be Next, but Merchant Data Is Still a Challenge

OpenAI has also hinted to agencies that it may link product feeds to ad campaigns to serve online merchants. An agency executive said OpenAI might reuse past work related to in-chat checkout functionality, now discontinued, to display more relevant ads in ChatGPT conversations using a merchant directory.

The launch timing for this product is still unclear. Implementing product feed ads usually requires standardized data, including price, inventory, and product description, to trigger the most contextually relevant ads in chat. But this is not easy. Reportedly, OpenAI’s early attempts at in-chat shopping progressed slowly, partly because merchant data was messy—this project was halted in March.

For investors, successful product feeds could help OpenAI enter more explicit commercial conversion scenarios. But OpenAI still needs to prove its execution in data quality, systems integration, and ad relevance.

Ambitious Ad Revenue Targets; IPO Narrative Needs Delivering

OpenAI’s ad revenue projections are quite aggressive. The company has told investors it expects ad revenue to reach $2.4 billion this year, about four times that in 2027, and $102 billion by 2030, accounting for more than 35% of total revenue.

Analysts point out that rapid ad revenue growth could enhance OpenAI’s appeal to investors. The company is working with banks to prepare for an IPO as early as this year.

Early data gives OpenAI some momentum. Six weeks after ChatGPT ads launched in early February, the company said its ad business had reached an annualized run rate of $100 million. Recently, OpenAI also introduced pay-per-click ads. Previously, the company only sold ads based on impressions—a model less attractive to many advertisers, as they pay whether or not users interact with the ad.

However, agency executives say clients still primarily see ChatGPT ads as experimental and have yet to shift significant budget away from other established channels. Early click-through rates were strong, but new ad networks often see drops as inventory expands and user novelty fades.

This means the core issue for OpenAI’s ad business isn’t merely attracting trial, but continuously proving its effectiveness. If it can use low barriers to attract SMEs and demonstrate real returns via conversion data, its ad business could approach Meta- and Google-style scale. Conversely, if performance weakens or measurement is insufficient, investors may become more cautious about its long-term ad revenue goals.

Risk Warnings and DisclaimerThe market has risks and investment should be cautious. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial position, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their circumstances. Invest accordingly at your own risk. ```