OpenAI Targets Small Businesses With Latest Ad Updates

OpenAI targets small businesses with ad features

OpenAI is turning to small businesses to achieve its advertising goals, according to a report by The Information. Executives told outside ad tech firms that OpenAI is looking to court small and local companies such as dry cleaners and car washes. An agency executive also claimed that OpenAI is introducing features this week that are better suited for small businesses, including ads designed to prompt specific actions such as booking an appointment.

Conversion focused tools and integration

OpenAI is coaxing small businesses with performance-dependent payment, but is asking that they integrate with its ad tech stack. Conversion-oriented ads will only require payment if the ads lead to results, per an agency executive cited by The Information. Testing these campaigns requires marketers to install OpenAI's ad pixel to track actions after initial ad clicks. OpenAI is also pushing marketers to link their internal systems to its newly launched API, enabling them to report on-site actions and strengthen OpenAI's claims that its ads deliver measurable results.

From high minimums to self service

The move is a notable departure from the company's initial ads launch that required minimum upfront costs of $200,000. OpenAI previously reduced minimum upfront commitments to $50,000, and its current announcement allows some ad buyers to spend only if ads lead to concrete results. The company began rolling out a self-service ad buying portal for US businesses earlier this month that can be used regardless of company size and requires no minimum spending commitment. That builds on an April ads manager launch that brought tools similar to Google Ads to OpenAI. OpenAI has struck partnerships with ad tech companies including Criteo and StackAdapt to legitimize its ad capabilities and bring familiar workflows to a nascent format. The company has a goal of generating $2.5 billion in ad revenues this year and over $100 billion by 2030.

What it means for marketers

Targeting small businesses, combined with consistent efforts to prove its ad offerings, could help OpenAI curb current concerns about the potential of AI chatbot ads. Small businesses are typically more performance-focused, more willing to test lower-cost channels, and less constrained by brand-safety concerns that weigh on larger advertisers. OpenAI still needs to show that ChatGPT can drive measurable local actions beyond clicks if it wants to compete with platforms with established small business bases such as Meta and Google. The move brings OpenAI's ad strategy closer to Meta's focus on small business clients, which Axios estimates at 250,000 Meta advertisers globally.

Sources: eMarketer · The Information · Techmeme