OpenAI started showing ads in ChatGPT in Europe in late August. Free users and the cheaper Go tier see them, paying subscribers don’t. Earlier this month the company said it is testing a visual format too, which appears while the tool is generating an image for you. Ads passed $1bn in annualised revenue in under 200 days, according to The Next Web, on a product OpenAI says 1.2 billion people use every week.
That was the story. The more useful one arrived this week, when 404 Media ran two campaigns on the platform to see how targeting actually works.
It works the way it works everywhere else. You upload a list.
Custom audiences, new room
An advertiser can give OpenAI a file of email addresses, phone numbers or the advertising identifier on an Android phone. OpenAI checks which of those belong to a ChatGPT account, and the matches become your audience. You need at least 25,000 entries to build one, the company says it deletes the file within 24 hours, and it doesn’t tell you which individuals matched.
If you have ever run a campaign on Meta, that will sound familiar, because it is Custom Audiences with the serial numbers filed off. The targeting machinery is the same one I wrote about when an ad slot delivered spyware, just with a different buyer at the keyboard. The list you built from your CRM, the one you already match against Facebook and Google, now has a third place to go. There is nothing novel in the mechanics and I would be wary of anyone telling you there is.
What is new is where the ad lands. On Meta it arrives in a feed, between a cousin’s holiday and a video of a dog. On ChatGPT it arrives inside a conversation the person believes is private. They have asked a machine for help with a cover letter, a symptom, a break-up, a redundancy consultation. OpenAI says it checks whether a conversation is “emotionally vulnerable” before an ad appears and that ads never influence the answers. I take that at face value. It is still a different room, and most people in it have not noticed the door is open.
The opt-out that doesn’t
Users can switch off personalised ads in their settings. 404 Media read the small print: that setting stops ads being chosen using your past chats and preferences. OpenAI’s own wording is that ads “may still be based on your current chat.” So the thing the person is typing right now remains a targeting signal, opt-out or not, and a list match on their email address sits outside the setting entirely.
I am not writing this to be outraged about it. Every platform has an opt-out that is narrower than the button suggests. I am writing it because somebody at your agency, or at your client, is going to be asked to put budget in, probably this quarter, and the pitch will lead with the 1.2 billion.
The reach is real. So is the fact that most of it is people who have never bought anything from a chatbot and have no idea an ad can find them there by their email address. Early adopters of a new placement usually pay for the learning. Decide whether that is you.
The bit that will matter in January
Here is the part of the European story that the US coverage skipped. In August the European Commission designated ChatGPT a very large online search engine under the Digital Services Act, on 159 million monthly EU users against a threshold of 45 million. From January, that brings a public advertising repository: a year of every ad that ran, with the advertiser, the dates, the targeting parameters and the reach.
Read that again with your customer list in mind. If you upload 40,000 emails to reach lapsed buyers with a win-back offer, the fact that you targeted a matched list, and roughly how many people it reached, becomes a public record anyone can search. Your competitors will search it. So will the journalist writing about which brands advertise next to vulnerable conversations.
That is not an argument against doing it. Plenty of advertisers will be fine with the record and some will be proud of it. It is an argument for deciding in advance what you are happy to have written down, because for the first time the targeting choice will be published alongside the creative.
Most of us have spent 15 years making those choices in a dashboard nobody outside the agency could see. That was never the same as nobody caring.