OpenAI is already making money from advertising, and a lot of it

 The business news story continuing to dominate the landscape is the one announced yesterday by OpenAI: ChatGPT Ads reached an annualized revenue run rate of $1 billion less than 200 days after launch.





ChatGPT is no longer just a subscription-based model; it is now initiating a battle against Google by expanding its commercial context.


Purchase intent is shifting from the search results page to the point of conversion.


Recently, users in more countries have begun seeing ads in the free version of ChatGPT as well as the "Go" plan. Undoubtedly, the system will continue to be refined to generate greater benefits for the company.


How does it work?

OpenAI states that to select an ad, it considers signals such as the context and intent of the current conversation, as well as the ad itself, its landing page, and the advertiser's contextual cues.

When personalization is enabled, the system can also utilize specific signals from your broader experience with ChatGPT.


There is another detail: the words provided by the advertiser do not function as exact-match keywords. Instead, they serve as clues regarding which chats might be relevant for their product or service.


OpenAI states that if multiple advertisers are eligible, it uses a combination of relevance and bidding to decide which ad to display first. In other words, bidding does play a role, but it is not the sole deciding factor.

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