Podcast Summary: The Digiday Podcast

Episode: ChatGPT enters the ad game. Now what?
Date: February 17, 2026
Host(s): Kameka McCoy (Senior Marketing Reporter, Digiday), Tim Peterson (Executive Editor, Video and Audio Digital Media, Digiday)
Guest: Krystal Scanlon (Senior Platforms Reporter, Digiday)

Overview

This episode unpacks ChatGPT’s foray into advertising with the launch of its first ad product—a notable shift marking AI platforms’ entry into the paid ad space. The discussion explores the ad product’s mechanics, pricing, strategy, market positioning, advertiser response, and the broader implications for digital advertising, search budgets, and the competitive landscape.

Key Discussion Points & Insights

1. The Rollout of ChatGPT’s Ad Product

• What was launched:
  ChatGPT has introduced sponsored ads that appear at the very bottom of chatbot responses, clearly labeled and separated from organic answers.
  • Krystal: “They literally just sponsored ads or sponsored services...appear at the very bottom of the answers...very clearly labeled and separate from the organic answer.” (02:04)
• Purpose:
  The design ensures neutrality, so ads do not influence ChatGPT’s organic responses.

2. Pricing and Go-to-Market Strategy

• Pricing Model:
  The ad product uses a CPM (cost per thousand impressions) model, with an initial CPM of $60—comparable to early Netflix ad launches.
  • Krystal: “The starting CPMs...for this model, it’s $60. That’s putting it in the same sort of region as premium TV.” (03:05)
  • Tim contextualizes: “Hulu at that time was like a 20, $25 CPM...Netflix has since come down. Generally, the premium streaming services are like in the $30 CPM range.” (04:16)
• Minimum Spend:
  Advertisers are reportedly required to commit at least $200,000 to participate.
• Target Advertisers:
  The focus has been on “the biggest of the big clients”—major brands and agency holding companies (Omnicom, WPP, Dentsu).

3. Direct-to-Advertiser Approach

• Initially, OpenAI targeted brands directly rather than going through agencies, a selective approach echoing their intent to be distinctive versus other platforms.

4. Comparisons with Perplexity and Other Platforms

• Perplexity’s Struggles:
  Perplexity tried a similarly premium, non-CPC (cost per click) model and faced advertiser pushback for high pricing and lack of familiar search metrics.
  • Krystal: “With perplexity...it didn’t follow this proper search CPC model. And then that along with the high pricing just really put them off...” (09:29)
• Ad Platform Development:
  Perspective that while historically self-serve platforms took years to develop, OpenAI may leverage its tech capabilities to shorten that timeline.
  • Tim (lightly joking): “I wonder if at this point they could just throw Codex 5.3 at it and say, build me an ad platform, go get a coffee, come back and bam.” (16:13)
• Team Structure:
  OpenAI’s monetization team is led by product engineers, not traditional ad salespeople. Asad Awan (ex-Facebook) is leading ads and monetization, focusing on “inventing something new aligned with our ads principles around privacy, trust and user control.” (LinkedIn quote; 17:22)

5. Capabilities and Reporting

• Advertiser Experience:
  Currently, advertisers only receive basic aggregated metrics (views, clicks), lacking context such as user demographics or conversational context.
  • Krystal: “These are kind of like the basics...it’s just so unclear right now as to what ChatGPT or OpenAI...are actually going to give in terms of information.” (20:56)
• Potential Trade-offs:
  More data to advertisers risks user privacy and trust; less data could keep performance and ROI expectations vague.

6. Competition and Search Ad Budgets

• Chasing Search Budgets:
  OpenAI explicitly asked for clients’ total search spend—aiming to divert share from Google and Bing.
  • Tim: “OpenAI was going after share of search spend.” (27:22)
• Google and Bing:
  OpenAI likely faces an uphill battle against Google but may more easily siphon spend away from Bing.
• Broader Ad Ecosystem Shift:
  Potential for ChatGPT to slowly build share by winning over budgets from Bing, TikTok, Amazon, and eventually challenge the “final boss” (Google/Meta).

7. Advertiser Appetite and Competitive Dynamics

• Buyers Want Competition:
  Advertisers welcome additional viable platforms to counterbalance Google, Meta, and Amazon—a growing “triopoly.”
  • Tim: “The competition from Meta against Google was welcomed by ad buyers because it put pressure on Google...If OpenAI comes into it…can create even further competition.” (34:43)

8. User Reaction, Trust, and Platform Integrity

• Community Pushback:
  Some ChatGPT users threaten to switch to competitors if ads become intrusive—OpenAI is keenly aware and controls the narrative around the ad pilot.
• Privacy Principles:
  OpenAI leadership (notably Fiji Simo) stresses no user data is shared with advertisers and that ChatGPT remains neutral regarding ads.
  • Krystal: “Fiji’s definitely come out saying...they are not selling anyone’s data to advertisers.” (22:16)

Notable Quotes & Memorable Moments

• On Product Launch:
  “They literally just sponsored ads or sponsored services that are going to appear at the very bottom of the answers of ChatGPT...very clearly labeled and separate from the organic answer.”
  – Krystal, 02:04

• On Pricing and Positioning:
  “The starting CPMs...it’s $60. And literally anyone I’ve spoken to, I mean, that’s putting it in the same sort of region as premium TV.”
  – Krystal, 03:05

• On Advertiser Status:
  “It's almost as much about that as about like actual ad performance for an advertiser at this point.”
  – Tim, 05:07

• On the Ad Model’s Novelty:
  “This isn't about retrofitting old ad tech models. It's about inventing something new aligned with our ads principles around privacy, trust and user control.”
  – Quoted from Vijay Raji (OpenAI CTO), cited by Tim, 17:22

• On User Trust and Neutrality:
  “When it comes to these ads, ChatGPT remains neutral...ChatGPT isn’t going to have a clue because it’s not actually looking at the ads.”
  – Krystal, 22:16

• On Advertiser Data Requests:
  “Advertisers are always going to say, we need more data. And the platforms...are always going to withhold the data because they understand that's their leverage.”
  – Tim, 23:54

• On the Need for Ads:
  “Over and over again with every single platform, the ad model is...the one model that has allowed every single platform to have consistent revenue so that they can focus on other things.”
  – Krystal, 30:30

• On Search Market Competition:
  “Google is Thanos...maybe you can, you know, collect the Infinity Stones amongst Bing and TikTok and Amazon. Right? And once you've kind of proven the case for the dollar shifting there, then you move on.”
  – Kameka, 34:07

Timestamps for Important Segments

• 02:04 – Krystal explains the initial format and neutrality of ChatGPT ads
• 03:05 – 04:16 – Deep dive into pricing, comparisons to Netflix/Hulu, and CPM rationale
• 05:34 – Discussion of initial advertisers and focus on larger brands
• 09:29 – Analysis and lessons from Perplexity’s failed ad approach
• 13:26 – Circular deals, potential for ad/enterprise bundling at OpenAI
• 16:13 – Could OpenAI rapidly build a self-serve ad platform?
• 17:22 – Leadership structure and philosophy around ad tech at OpenAI
• 20:56 – Limits of current reporting/measurement for advertisers
• 22:16 – Fiji Simo’s statements on privacy and ChatGPT’s ad neutrality
• 27:22 – OpenAI’s pursuit of share from existing search ad budgets
• 29:13 – Google’s public position on ads in Gemini/AI, market impact
• 34:07 – The “Infinity Stones” metaphor for building competitive share
• 34:43 – The importance of a fourth player in digital advertising for buyers

Conclusion

ChatGPT’s ad product is at its earliest—and riskiest—stage. OpenAI is betting on high-profile brand partners, premium pricing, and a strong privacy/neutrality stance. The approach signals ambition to disrupt digital advertising’s status quo but raises critical questions about performance, measurement, user trust, and future competition with Google, Bing, and others. All eyes (including Digiday’s) are on whether OpenAI can deliver real value to advertisers without compromising the user experience that catapulted ChatGPT into mainstream use.