This year, OpenAI and Anthropic have been continuously launching new models and tools to compete for the developer community. During this process, their advertising business seemed to be more of a side venture. However, the situation has now changed.
In the past few months, the company has intensively launched a number of new products and tools to attract advertisers, while also reducing advertising prices. The latest data shows that this strategy has helped it attract a large number of new advertising clients. OpenAI is also recruiting on a large scale. Data from the employee profile tracking platform Crustdata indicates that among the approximately 140 employees in the advertising department at OpenAI, nearly half joined between July and September; Dave Duggan, who is in charge of the advertising business, previously worked at Meta for 12 years, and Meta remains the largest source of talent for the department.
Large-scale recruitment, coupled with the departure of some senior executives, has triggered many changes within the company. Two people familiar with the situation revealed that since the launch of its advertising business in February this year, the OpenAI advertising team has undergone 7 reorganizations.
Compared to the company's other businesses, the advertising business is still relatively small in scale, but OpenAI is attempting to turn it into an important growth engine. Since the launch of its advertising service in February, the annual revenue from advertising reached $1 billion by the end of August. In contrast, by the end of September, OpenAI's overall annual business revenue was close to $50 billion, mainly relying on products such as ChatGPT subscriptions, Codex smart devices, and direct model sales.
Despite the growth in advertising revenue, it is highly unlikely that OpenAI will be able to achieve the ambitious targets it outlined to investors earlier this year. At that time, the company predicted that its total annual advertising revenue for 2026 would reach $2.4 billion.
Attracting more advertisers will help drive further business growth. Dan Salmon, a partner at Wall Street research firm New Street Research, stated that at the beginning of October, there were approximately 60,000 advertisers on the OpenAI platform, which is significantly higher than the 20,000 at the end of August.
According to estimates by application and advertising monitoring agency Sensor Tower, ad spending in the US market ChatGPT is expected to increase by 40% in October compared to September. OpenAI's advertising business has now expanded to over 60 countries.
The rapid growth of the business has also piqued the curiosity of advertisers and senior executives from agencies about this sector. Last Thursday, a special event co-hosted with Home Depot during New York Ad Week was fully booked. After the event, dozens of people lined up, hoping to have a brief conversation with Dave Duggan, Vice President of Global Advertising Solutions at OpenAI.
Duggan then stated, "We are building the fastest-growing advertising business in the world, attracting talents from a wide range of companies within the industry, not just focusing on a single enterprise. Our diverse talent pool allows us to iterate quickly and transform advertisers' feedback into higher-quality products."
The digital advertising market is dominated by Google, Meta, and Amazon. For OpenAI to try to get a share of this market, it is destined to be a tough battle. Several people who work directly with advertisers said that most advertisers are still only allocating a test budget—usually 1% to 5% of their annual advertising expenditure—to ChatGPT; only a few customers have significantly increased their investment.
Kate Scott-Dawkins, head of global research at GroupM, the media investment group under WPP, stated: "It takes time to sign contracts, acquire new advertisers, and capture market share." She believes that in the coming period, Google will still be the main player in the fields of AI chatbots and AI search advertising. However, she also mentioned that she has never seen any advertising channel grow at such a rapid pace as OpenAI.
Recruit talents from Google, Meta
Fiji Simo has over a decade of work experience at Facebook. She joined OpenAI in 2025 and ceased to hold a full-time position at the beginning of July this year. Following that, Duggan reorganized the advertising team into vertical business units, each responsible for different industries such as retail, tourism, and finance, and established separate teams to collaborate with advertising agencies. Sources familiar with the matter say that this structure is similar to the organizational methods of mature advertising sales teams like Meta and Google. A spokesperson for Meta declined to comment on this.
There are many sales professionals from Meta and its competitors in the senior management of the advertising business. For example, Vijay Raj, after working at Meta for 10 years, took on the role of Chief Technology Officer for OpenAI applications a year ago; Mitch Pilar, with 12 years of experience at Google, and Andy Sinn, who has worked at Meta for about ten years, joined in July to be responsible for advertising sales to brands and agencies in the Australia and New Zealand region; at the end of September, Mark Bamberley, who has over a decade of experience on platform X, was appointed as the head of advertising business for Europe, Middle East, and Africa at OpenAI.
Testing budget allocation phase
When OpenAI launched its advertising pilot in February, it primarily targeted large brands and agencies that purchase advertisements for these brands, including Yikehang, Target, Ford, as well as advertising groups such as Omnicom Group, WPP, and Dentsu. Recently, OpenAI has begun to more actively pursue small and medium-sized enterprises (SMEs) – it is precisely these clients who have helped build Meta's advertising empire.
To attract small and medium-sized advertisers, OpenAI relies on outsourcing companies to assist with ad sales and helps advertisers set up promotional activities. The partners include TP (formerly Teleperformance), Canda Newthink, as well as the consulting giant Accenture.
Nine agencies and technology companies that place ads on ChatGPT stated that as advertisers gradually become familiar with using the platform, they are slowly increasing their advertising budgets on ChatGPT.
One major attraction is that: ChatGPT advertising prices have decreased since its launch. In the early stages of the project, the platform charged a premium to some major clients. Cole Fur, the founder of the marketing agency InterTeam Marketing, stated that for similar commercial software clients, the cost per ad click on ChatGPT is about $5, while Google's click fees range from $30 to $50.
Philip Nakov, the person in charge of agency Nakora, specializes in selling cybersecurity services and legal technology tools to customers. He stated that the advertising results far exceeded expectations: for every $1,000 invested, clients can acquire approximately 10 new customers on ChatGPT; on Meta, the yield is 5 customers, while with Google it's only 1 customer. Some clients have a daily advertising budget ranging from $1,000 to $30,000, and up to 40% of this budget is allocated to ChatGPT.
Co-founder of Graphite Agency, Marcos Charorochi, said: "Once the ChatGPT advertisement is successfully launched, the investment scale can increase to hundreds of thousands of dollars or even more."
At the same time, OpenAI is also expanding on the forms of advertising it presents to users.
The first batch of advertisements launched in February will be marked as sponsored ads and will appear below the answer sections. They are similar in format to Google search ads and are designed for users who already have an intention to purchase. Last week, Dugen mentioned that approximately 20% of the current ChatGPT users' questions indicate an interest in purchasing products or services.
Recently, the advertising team of ChatGPT has focused on reaching potential users who have not yet searched for purchasing information within the robot. Two people familiar with the matter revealed that OpenAI launched image ads last week, using images to show how products and services can be integrated into daily life, and they have already informed agents about plans to test more image and video ad materials.
OpenAI is still launching the effect tracking tools that advertisers need. Last week, it announced a partnership with several third-party monitoring agencies to track users' subsequent behavior after clicking on ads. However, advertisers have more demands, such as needing tools to compare the effectiveness of ChatGPT with Google Ad campaigns, said two individuals in charge of coordinating with OpenAI.
Advertisers also complain that they are unable to see exactly which conversations trigger the ads. Fahad Divcha, CEO of marketing company Accuracast, stated: "This is like a black box; there is absolutely no visibility at all. As a result, advertisers can only rely on guesswork when setting instructions and specifying the scenarios in which ChatGPT ads should be displayed."
Search data related to the advertising monitoring agencies AI and Adthena indicates that some ad placements do not match. The agency analyzed approximately 187,000 ad placement records and found that about one-ninth of the ads were unrelated to user inquiries. A few ads also appeared inappropriately near sensitive topics: an ad for a supportive bra appeared next to searches related to breast cancer, and ads for short-term loans appeared below discussions about debt relief.
OpenAI A spokesperson stated that the company is carefully listening to the feedback from advertisers and agencies, continuously optimizing the product, and launching new features based on that feedback.
