Who’s betting big on ChatGPT ads? Not Asian brands

Dave Dugan, OpenAI’s vice president of global ad solutions, has a bold message for advertisers in Asia: Advertise directly to the platform’s 1 billion weekly active users.

“We believe this is an entirely new channel for marketers,” he said in September at a virtual press briefing for media in Southeast Asia.

Dugan spent more than 12 years at Meta, helping it sell advertising to some of the world’s largest brands. OpenAI hired him in March to convince marketers to put some of those budgets into ChatGPT.

The company began showing ads in the US in February to free users. Seven months later, ChatGPT ads were launched in more than 60 markets, including India, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.

Dugan said advertisers in the six Southeast Asian markets and Taiwan would get a product that OpenAI had tested and refined, and now ready to deliver results.

But advertisers in Asia don’t share Dugan’s confidence in the product – yet.

“We’re still trying to figure it out,” says an executive from an advertising agency working with OpenAI tells Tech in Asia. “A lot of brands are testing, but they’re still not fully aware of the complete unlock they can get and how it’s going to be part of their strategy.”

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The executive, who asked not to be named, adds that the cost of advertising on ChatGPT remains high and the right price is still being “discovered.”

The speed of OpenAI’s rollout reflects the scale of its revenue ambitions. The company has reportedly told investors that ads could generate US$2.5 billion this year and US$100 billion by 2030, accounting for about 36% of its projected revenue. Meeting that forecast would require the business to grow roughly 40-fold in four years.

Many of OpenAI’s active users reside in Asia and use it without having a subscription.

Conversations with brands, agencies, and analysts across India and Southeast Asia show why advertisers are hesitant to embrace AI ads. They say advertisers cannot yet reliably determine whether ChatGPT ads lead to sales, bring them new customers, or perform better than established alternatives such as Google and Meta.

Too expensive

How does one advertise on ChatGPT? Brands set up ad campaigns through OpenAI’s Ads Manager, supplying the creative materials and the webpage link. OpenAI matches the ads to relevant queries and then displays them below ChatGPT’s answers.

Lack of benchmarks

Testing the waters

Many unknowns

A new breed of advertisers