ChatGPT ads to go performance-based

ChatGPT parent OpenAI is expanding its advertising initiatives to performance marketing, as part of a broader effort to court more local businesses. 

What’s happening: While OpenAI launched ChatGPT advertising to U.S. businesses of all sizes in early May, with campaigns that can be run on a cost-per-click (CPC) basis, the company last week told select advertisers it’ll begin offering “conversion-optimized” campaigns on June 5, according to news reports. 

Why it matters: Advertisers would reportedly pay only when certain actions are taken, including appointment bookings. 

• “The move positions OpenAI more directly against Google and Meta by targeting the massive market of small and mid-sized businesses focused on leads, bookings and sales — not just impressions,” news site Search Engine Land wrote. 

The nitty gritty: “To test the campaigns, advertisers will need to install OpenAI’s ad pixel on their websites to track user activity after ad interactions,” Search Engine Land added. “That creates a more familiar ad-tech setup resembling the measurement ecosystems long used by Google, Meta and other performance advertising platforms.”

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The big picture: While Google remains the dominant lead-gen platform, consumers’ AI search usage is growing at a rapid clip, with platforms like Angi and Thumbtack recently launching integrations with AI tools, including ChatGPT, to route AI-driven searches to contractors.