The Ad Break Comes To AI

ChatGPT is entering the ad market joining the likes of Google and Meta. Will OpenAI’s pitch sway Indian brands?

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If you asked ChatGPT for a new phone, a family car or the best way to plan a holiday, you were probably looking for an answer, not an ad. That’s changing fast.

Last week, OpenAI launched ChatGPT Ads in India, bringing sponsored messages into conversations on the AI chatbot for the first time in one of its largest markets. It’s the latest to introduce ads into its AI tools after Gemini and Meta, signalling a shift in digital advertising and marketing. 

Ads will roll out to those using Free and Go tiers, while those on Plus, Pro, Business, Enterprise and Education plans will get an ad-free experience.

The AI giant claims more than 50 brands are expected to go live during the initial rollout, with WPP and Omnicom as OpenAI’s first agency partners in India. Businesses will be able to access ChatGPT’s self-serve Ads Manager, with daily budgets starting at ₹725.

OpenAI’s pitch to advertisers is fairly straightforward if you believe that the world is moving on beyond search engines. The company says ChatGPT is increasingly becoming a place where people don’t just look for information, but think through what they want to buy.

In India, the company claims more than 100 Mn weekly active users, though how many of these are on the free and Go tiers is unclear. ChatGPT Ads arrive at an interesting moment for the advertising industry. Google and Meta have already begun putting ads into their AI-powered experiences, while other AI companies are still figuring out whether advertising can coexist with the trust users place in conversational assistants.

OpenAI now has to answer a harder question: will advertisers actually move money to a chatbot simply because it knows what consumers are thinking about?

OpenAI’s initial advertising model is deliberately closer to search advertising than traditional display advertising. But it also says that  unlike a conventional search query, a conversation can reveal the user’s budget, preferences, concerns and trade-offs. 

“People do not simply enter a few keywords into ChatGPT. They express their goals, constraints, preferences and trade-offs. That produces a much richer expression of intent than a search for ‘best family car,” said Preetham Venkky, chief digital officer, Omnicom Advertising India. 

Under the hood, OpenAI’s ads system uses conversation context to show an ad relevant to what the user is exploring. It considers multiple signals, including the context and intent of users’ current conversation, the ad’s landing page, title, copy, advertiser-provided context hints and targeting selections. 

In this case, ads will appear at the end of a response by ChatGPT. Ads are labelled as sponsored messages and visually separated from ChatGPT’s response. For its rollout in India, ChatGPT is going for direct relationships with select brands and agencies to begin with. 

Globally, studies show that ads on AI platforms align with the topic of the query and score high on relevance metrics. A study by SE Rankings showed that only 14% of the times the ads seemed........

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