OpenAI is rapidly expanding its global advertising operations to attract more users to its platform and pursue an ambitious revenue target: generating $100 billion by the end of the decade.
At the Cannes Lions International Festival of Creativity on Monday, OpenAI’s head of advertising, David Dugan, told reporters: “The revenue that we make from the ads offering is going to subsidize and grow access to information.”
Ads rollout and test markets
After years of rejecting advertising, ChatGPT introduced ads in February for users on its free and “go” tiers; these ads appear within queries and conversations. OpenAI says it already has thousands of advertisers across seven test markets: the United States, Canada, the United Kingdom, Australia, New Zealand, Japan and South Korea. The company added that it plans launches in Brazil and Mexico in the coming weeks and eventually intends to expand into India.
User response and performance indicators
Dugan said the new AI-driven ads are targeted based on what, when and how a user is researching. While the company declined to disclose specific ad revenue figures, it reported some early signs that users in test markets were not being alienated by the new ads. According to Dugan, the frequency with which users saw an ad and clicked away was “far lower” than when testing began.
Creative industry implications and the Cannes presentation
AI platforms, including OpenAI, have already unsettled graphic designers, visual artists and other creative professionals involved in content production. At Monday’s briefing, Chad Nelson, OpenAI Creative Specialist, demonstrated tools he built in OpenAI’s Codex for a fictional car brand and showed how they could produce a complete visual campaign for a local car dealership in Seattle.
Nelson said: “Two and a half days for a creative director working by myself, I don’t even know how to code — I can build this and deploy this to my entire organization.” He dismissed concerns that such tools should be seen as a threat to the creatives who founded the Cannes Lions festival, arguing they are simply another tool for producing advertising.
AI’s challenge to the search revenue model
The company’s four-month-old query-based ad business could disrupt the industry the most as AI cannibalizes search. AI has converted searches into AI queries, and OpenAI is now pursuing the traditional search-driven ad revenue model. In the short term, the experience may not look dramatically different for advertisers or users.
Yahoo CEO Jim Lanzone told Semafor in an interview last week that the classic online advertising model is “the best model in the history of the internet, maybe in the history of business,” and that it still works — the primary difference is the user interface, moving from lists of blue links to paragraphs in AI answers.
A company in transition
Monday’s briefing illustrated a technology powerhouse in an awkward transition: potent creative tools and a push into search advertising have put competitors on alert, while the company’s public presentation felt like that of a relatively new firm. The event was modestly staged — tucked behind some bushes and about a 15-minute walk from the main Cannes activity — and even included a lighthearted remark from Nelson about the correct pronunciation of Cannes.
Despite the low-key setting, it seems unlikely OpenAI will remain in the background for long as its advertising business and creative tools increasingly influence the industry.
