Dive Brief:
- Target will be among the first advertisers to pilot contextual ads in OpenAI’s popular ChatGPT program starting this month, according to a company blog post.
- The retailer will run ads promoting both its own business and those of brand partners on its Roundel retail media network. Ads will be tailored to specific keywords in ChatGPT prompts in a bid to ensure relevance and improve personalization.
- Target said that all of its ChatGPT ads will be clearly labeled, appear separately and distinctly and not influence answers shared by the program. OpenAI bringing ads to ChatGPT will be a larger test of consumer appetites for such experiences.
Dive Insight:
OpenAI’s decision to bring ads to ChatGPT has sowed consternation among some users and served as marketing fodder for rivals with a stance against the monetization tactic. Target emphasized in the blog post that its advertising won’t influence the chatbot’s responses in any way, a sticking point for skeptics, and that ads from its brand and Roundel partners will be transparently labeled.
“We believe ads play an important role in continuing to support broad access to AI,” said Asad Awan, ads and monetization lead at OpenAI, in a statement included in the Target blog post. “By working closely with partners like Target in this pilot, we’re able to thoughtfully test new ad experiences and learn together to ensure ads are separate and clearly distinct, relevant, and useful while maintaining the trust people place in ChatGPT.”
Target integrating Roundel into ChatGPT underscores how retail media networks could be a bridge to larger AI advertising adoption. Retail media networks can work with hundreds or thousands of brands and, in the case of big-box stores, a wide variety of product categories. Roundel has over 2,000 vendors and generates about $2 billion in value annually, per figures previously shared by Target.
In a theoretical use case described by the retailer, a ChatGPT user asking the program for recommendations for countertop cooking appliances focused on convenience may be served an ad for an air fryer brand that advertises through Roundel.
Target said that online traffic driven to its site by ChatGPT is already growing 40% monthly on average, making advertising through the service a natural next step. Separately, it launched a dedicated Target app experience in ChatGPT last November as part of its bigger bets on AI and agentic commerce. Target in January also partnered with Google’s Gemini AI on similar shopping capabilities.
OpenAI’s advertising pilot, which was announced last month, will serve ads to logged-in users of the chatbot’s free tier and on ChatGPT Go, an $8-per-month offering that is currently rolling out in the U.S. Users of ChatGPT Plus, Pro, Business and Enterprise will not see ads, and OpenAI has pledged to only share aggregated data with advertisers around campaign performance.
The controversial decision to bring ads to ChatGPT was the subject of a Super Bowl ad from OpenAI rival Anthropic on Sunday night. In the spot, which was one of the best-received of the game, a man asking his trainer for advice on how to quickly get six-pack abs is greeted with a stilted, AI-sounding response that is capped off by a jarring plug for sneaker insoles.
Several other brands and agencies have jumped at the opportunity to advertise in ChatGPT as its base surpasses 800 million weekly active users. WPP Media earlier this week said clients including Adobe, Audible, Ford and Mazda would participate in the ads pilot.
