OpenAI presents ChatGPT advertisements at Cannes amid a drop in CPM.

      TL;DR: OpenAI made its debut at Cannes Lions, promoting ChatGPT as a major advertising platform, but its initial $60 CPM has dropped to $25 in just ten weeks. The company foresees $100 billion in ad revenue by 2030 while competitors like Anthropic and Google maintain ad-free chatbots. OpenAI's presentation was at a secluded villa rather than a beach club, highlighting its different approach to advertising compared to industry giants. David Dugan, a former Meta exec turned VP of advertising at OpenAI, stated they’ve attracted “thousands of advertisers,” with key sectors being travel, retail, health, beauty, and finance.

      OpenAI started testing sponsored links in ChatGPT responses for free-tier and Go-plan users in the US on February 10, expanding to seven additional countries, including the UK and Canada, and plans to include Brazil and Mexico soon. The company aims to hit $2.5 billion in ad revenue by 2026, growing to $11 billion by 2027 and $100 billion by 2030. However, to achieve this, OpenAI would need to capture about 10% of the global digital advertising market, currently dominated by Google, Meta, and Amazon. The company's value proposition is that chatbot users express their needs directly, potentially making ChatGPT the most intent-driven ad platform online.

      Preliminary data reveals challenges; OpenAI launched its ad pilot at a $60 CPM, which quickly fell to around $25, leading to a switch to cost-per-click bidding at $3 to $5. The pilot achieved over $100 million in annualized revenue with under 600 advertisers. OpenAI introduced a self-serve ads manager in May without a minimum spend requirement, indicating initial premium pricing could not be sustained. At Cannes, agency representatives were cautious, with Horizon Media’s Michael Cohen stating they are focused on learning as OpenAI's platform evolves rather than maximizing immediate performance.

      OpenAI's VP of monetization, Benji Shomair, noted they are exploring ad formats beyond sponsored links, but did not specify. He suggested that a user seeking advice on fixing a squeaky door could benefit from a video ad for a hinge lubricant. However, the gap between this vision and current offerings is large; Omnicom's CTO, Paolo Yuvienco, remarked that although OpenAI's ad initiative is "relatively successful," it remains "immature," given the lag in AI response times compared to agency needs.

      OpenAI's entry into advertising is notable as it challenges the prevailing view among AI firms that chatbot ads are premature. Anthropic has promoted its Claude chatbot as remaining ad-free to maintain user trust, while Google has stated it has no immediate plans for ads in its Gemini chatbot but has not ruled them out for the future.

      The advertising angle is crucial for OpenAI's anticipated IPO. The company incurred $34 billion in expenses in 2025 with only $13 billion in revenue, not expecting to become profitable until 2030. Having filed confidentially with the SEC on June 8, it aims for an autumn debut at a valuation exceeding $1 trillion. Revenue from advertising is essential for OpenAI to demonstrate it has diverse revenue avenues beyond subscriptions and API access, supported by a user base that surpassed one billion weekly users in May 2026. However, it still needs to prove that its ad model delivers results that justify ambitious revenue forecasts.

      The underlying concern is whether introducing ads in a conversational AI will undermine its quality. OpenAI asserts that it will not allow financial interests to affect ChatGPT's responses and will keep interactions confidential from advertisers, with ad-free experiences for Pro, Business, Enterprise, and Education subscribers. Yet, the recent drop in CPM suggests the market is still determining the true value of ChatGPT ads, indicating that the product is still in search of its market fit. This search continues from a secluded villa at a major industry event.