This Omni Talk Retail Fast Five segment explores OpenAI officially launching its ChatGPT Ads Manager and what it could mean for the future of digital advertising.

Chris Walton and Kathryn Mazza discuss why AI-powered search advertising may become a major threat to traditional search engines, how retailers should approach testing the platform, and why brands can’t afford to ignore ChatGPT’s growing influence on consumer behavior.

They also debate whether advertisers could eventually pay to influence AI-generated answers and what that might mean for trust in AI search.

⏩ Tune in for the full episode here: https://youtu.be/W5Ei9Mjru4c

#OpenAI #ChatGPT #AIAdvertising #RetailMedia #DigitalAdvertising #RetailTechnology

We begin today with what could be a seismic shift in how retailers advertise.

OpenAI has officially launched its ChatGPT ads manager.

OpenAI has essentially launched a beta self serve ChatGPT ads manager, expanded its ad pilot to five new countries and introduced cost per click bidding and new measurement tools signaling its full throated ambition.

Nice use of the word full throated there.

Whoever put my notes together.

Full throated.

Full throated ambition to become a major advertising platform that directly competes with Google and Meta.

And OpenAI expects to generate two and a half billion dollars in ad revenue in just this year alone.

Two and a half billion dollars?

Catherine, that's insane.

And OpenAI is also introducing cost per click bidding, joining existing CPM based buying so brands can align their spend more directly with the consumer actions that follow an ad impression.

Catherine, I can think of no better person to start off today's show with, especially around this headline because as a former chief marketing officer and, and a veritable retail media guru, I have to ask you what advice you have for retail executives attempting to navigate through the news of ChatGPT going full on into advertising.

Yeah, well, I mean Chris, who did not see this coming, I'm surprised it took this long.

Right?

Are you?

Yeah.

Platform wanting to now get in the business of being a publisher of ads in reaping that high margin revenue that.

Right.

It's, it's a no brainer.

You know what's interesting is I was actually on Chat GPT the other day looking up some things around process and Six Sigma and I got fed a couple of these new ads.

And I will say that, you know, they're in pilot mode right now, so the inventory is limited, but it was not particularly intrusive to me.

It's contextual based so it was something that was related to what I was looking up.

So it seems like they, they have an engine working at least appropriately from my point of view if, if I'm Google, I'm definitely watching this, you know, closely and thinking about what our defense is.

And I have no doubt that Google is, and they, you know, they have, they have their plans in place but a lot of people are spending time on these platforms Right.

I have a 13 and a 15 year old.

They don't even use the term googling.

Right.

It's just all chat GPT for them.

My advice for executives is this.

You know, I don't think there's any doubt, there's no doubt about it.

People are spending time on this platform and it is an opportunity.

That being said, it is in pilot mode.

I have heard that CPMs are a bit inflated compared to Google and Meta.

Now I think that will normalize once inventory raises on the platform and it starts to get its algorithm going and comes down to market rates.

But it is pricey at the moment.

My thought is, you know, as a chief marketing officer, I always had, you know, a test and learn budget, a kitty of money for exactly this type of thing.

I would certainly dip my toe in the water and start getting used to the platform and seeing what the results are.

So Kevin, let me ask you, do you think this is, do you think this is like that revolutionary or is it just more like an evolution of, of search?

Because for, for me, like the way, the way I my thoughts on this and this is why I led with you with this headline for you particularly because you're the expert far more than I am on this.

It seems like we as retailers have been down this road before in terms of like understanding, like search engine optimization and paid search via Google.

And so but now it's just like a slight pivot towards doing it or understanding how to do it in chat GPT.

The way I'd equate it to it is like, you know, I might know how to dribble with my right hand, but I may not know how to go left.

And so I could be a better basketball player by learning how to go left.

And I think the same thing goes here, but it just seems like something that is close to what we know how to do, at least right now in this first wave.

And so to your point, it's about jumping in, getting experience with it and understanding where it's going to go in terms of, you know, how a retail executive on average should think about it.

Do you agree with that?

I, I would agree.

Like Chris, when I think about search, I think about two different buckets of search.

I think about Google SEM sear search, high intent.

You're searching something, you get a result.

If you're on a brand's website, you know, and you search something, there's the banner ads that come up that should be relevant.

I think that is comparable to this.

And then there's the Search as far as sponsored product ads when you're in the grid and brands paying to come up closer to the grid.

So my, I think my, I won't call it a concern.

I'm just trying to understand, I understand the banner ads portion of this right now.

But could advertisers come in, bid and actually force their way into the answer that ChatGPT delivers to the consumer?

And could it actually hurt the integrity of the results that are being served?

And could there be some bias that comes into it?

That that would be my concern.

Right.

And that's, and that's the hunch that Anthropic and Claude are playing.

Right.

They're thinking that that actually might happen and are trying to market themselves in that way.

So let me ask you this then before we move on.

Would this, if.

So you said you, you said you'd like have a reserve budget to do this type of experimentation on the consumer facing side of AI, is this where you would be devoting the bulk of that budget or would you be thinking that there's some other realm that you'd also be exploring or would this be where you're going first and foremost?

I think this is where I would be going.

Yeah.

Yeah, I think so too.

It's searched that somebody's going in, they're searching something with the highest intent.

So it's a performance digital tactic, right?

Yeah.

So, and by that, like when I think about the things I could be investing in technologically, like, you know, like agentic checkout as an example, I'd be looking at this and understanding this fully.

And you agree it sounds like.

Yeah, cause I think, I think it's ready, I think it's ready for you to start testing and start using it.

You know, the agentic checkout.

I think yes, you should be looking into that, but I just don't think it's there for like the immediate need.

I think it's surely coming, but this is where I would start for sure.

Yeah, 100%.