Abstract:
OpenAI has informed some business partners that it will no longer accept advertisements for image and audio generation products in ChatGPT because such products compete with its own functions. This adjustment has not been reported before and has not been reflected in its public advertising policy, catching existing advertisers such as Adobe that sell similar products off guard. If this policy is extended to other competing products, it may compress OpenAI’s potential advertising revenue.
OpenAI has given investors aggressive advertising business growth expectations and regards advertising as an important way to monetize a large number of free user groups.
OpenAI released an updated version of its image generation model - ChatGPT Images 2.5 on Tuesday. The company launched ChatGPT Live in July, a set of speech models that allow users to talk to OpenAI products hands-free.
While the move surprised some advertisers, there is precedent for such decisions in the industry. For example, it is not uncommon for media companies to refuse advertising from competing products: news organizations generally do not publish ads from direct competitors, and video streaming platforms often refuse to place ads from competing products.
Given that more than 1 billion users use ChatGPT at least once a month, OpenAI’s entry into the advertising business has been closely watched by major brands and the digital advertising industry. Most users don't subscribe to paid services, prompting the company to look for other ways to generate revenue from user usage.
In February this year, OpenAI began to display ads in ChatGPT to some US users, and recruited well-known advertising clients such as Ford for the online work. The promotion process encountered some twists and turns: some early advertisers complained that OpenAI lacked relevant technology and could not measure the effectiveness of advertising.
OpenAI has since expanded its advertising business to more than 40 countries and plans to continue to expand coverage while working to streamline some business processes.
Last month the company said its advertising business had annualized revenue of $1 billion, achieving rapid growth in six months. Nonetheless, OpenAI has previously told investors that it hopes to reach $2.4 billion in advertising revenue this year. The company said in August that the advertising business is "a major pillar of OpenAI's diverse business model, alongside personal subscriptions, enterprise services and pay-per-use application programming interfaces (APIs)" through which developers can access OpenAI's artificial intelligence models.
Comments