• by Laurie Sullivan , Yesterday

Analysts and advertising experts are making predictions on where OpenAI will take ChatGPT ads next, and the performance brands can expect to gain, as OpenAI’s ChatGPT Sponsored ad placements begin expanding this week across 31 European markets.

Germany, France, Spain, Italy, Sweden, Norway, Denmark, the Netherlands, and Austria are included in those markets.

“This expansion gives marketers across Europe a new way to reach people while they are actively exploring, comparing, and making decisions,” an OpenAI blog post detailed the rollout.

Tens of thousands of marketers have now advertised on ChatGPT, and OpenAI continues to improve the platform based on what it has learned from technology, people and businesses. The company is giving a $500 ad credit on when advertisers spend $500.

The addition of 31 European markets marks its largest expansion to date. In February, OpenAI began testing ads in ChatGPT with a pilot in the United States. Over the past six months, the company has expanded to eight additional markets.

ChatGPT’s advertising platform has been built based on AI from the ground up -- expanding beyond CPM and CPC bidding to support conversion optimization, helping advertisers optimize toward their business goals.

The company introduced geotargeting and custom audiences to help advertisers reach more relevant customers, expanded measurement beyond clicks through the OpenAI Pixel, Conversions API, and third-party measurement integrations, giving advertisers a more complete view of how ChatGPT Ads contribute to business outcomes.

“The next step will be to launch OpenAI Ads Manager to local advertisers in these markets,” wrote analysts at New Street Research. “Based on recent cadence, we expect that milestone will come in the next 2-4 months.”

New Street Research called the launch of OpenAI’s platform in the EU “a major milestone” because of it “positions OpenAI Ads to accelerate localized versions of Ads Manager,” and “it marks a major privacy achievement (supported by OAI’s data residency work) as the EU has the most stringent privacy regime.”

The original markets -- including the U.S., Canada, Australia and New Zealand, followed by the U.K. this summer -- were predominantly English- speaking.

Expansion into Mexico and Brazil brought the platform into major Spanish- and Portuguese-speaking markets, respectively, while Japan and South Korea introduced those countries’ native languages.

The U.K. is likely to be the most operationally difficult because GDPR and other legislation raises the bar for consent, personalization and conversion matching, according to New Street Research’s note.

OpenAI updated its European privacy terms earlier this summer and continues to emphasize answer independence, user controls and keeping conversations private from advertisers.

“It also details a ‘Generic Ads’ version that uses only basic account information for EU users who do not consent to broader private data collection,” New Street Research explains.

“We thought the EU launch might take a little longer into the year, and that the company might look to major emerging markets like India and Indonesia next,” New Street Research wrote. “No change to our view that those two major markets (with 1.5B and 400M in population, respectively) are likely for the next pilot launches, and we’re impressed that OpenAI got the hard work done in Europe first.”

No additional insights were provided on Indonesia, but Singapore could be next after Mumbai.

OpenAI is hiring a Regional Client Partner in Mumbai, who will be responsible for “driving new and expanded advertising revenue in India and ensuring successful business results for advertisers.”

There was little information from OpenAI on performance of the ads, but Adthena, an AI-driven search intelligence platform, that has tracked performance from the start of ChatGPT Ads reported in a blog post a few trends advertisers should look for.

In the U.S., retail & fashion made up one quarter of all searches, but ended in nearly 40% of the ads shown.

Early on, ChatGPT only showed an ad on fewer than 5% of U.S. searches, and never more than one at a time. Brands that show up now are competing against far fewer advertisers than they will in a few months.

The U.K. is a preview of what Europe should expect. Launched in June with the same gated access, ads only on free users, the data will become a benchmark for how these new markets will unfold.

Adthena expects low ad frequency early on -- less than 5% -- with a handful of categories gaining outsized visibility, and lighter competition before more advertisers join the pilot.