Amazon Ads announced a partnership with OpenAI that allows selected U.S. advertisers to test ChatGPT Ads through Amazon DSP. The pilot offers advertisers another avenue to purchase advertising inventory within the experience of ChatGPT.
That’s an interesting development to watch as it brings together two areas of digital advertising – Amazon’s advertising and audience capabilities and the conversational environment of ChatGPT. The new partnership could offer new opportunities for U.S. agencies that manage paid media campaigns and open up a new channel to consider in future advertising strategies.
What Is the Amazon DSP and ChatGPT Ads Partnership?
Amazon DSP is Amazon's demand-side platform for programmatic advertising. The U.S. advertisers selected for the new pilot will be able to use Amazon DSP to reach ad inventory inside of ChatGPT. Today, it’s a managed service, so Amazon’s team helps advertisers set up and improve their campaigns. The pilot is only available to a select group of U.S. advertisers right now.
The partnership is also part of Amazon's wider expansion in digital advertising. According to Digiday, Amazon has been expanding its advertising reach across platforms and media such as Netflix, Roku, Spotify, Disney, Hulu and ESPN. Adding ChatGPT gives Amazon another digital environment where advertisers can reach audiences.
For digital marketing agencies, this shows that Amazon DSP is moving beyond traditional ecommerce advertising and becoming a broader omnichannel media-buying platform.
One of the advertisers included in the initial pilot is Delta Vacations. This also shows that the opportunity is not only limited to ecommerce brands selling products on Amazon only. Travel businesses, for example, can benefit from reaching people while they are researching destinations, comparing options and planning trips through ChatGPT.
How Ads Will Appear in ChatGPT
The ad experience isn’t the same as a traditional Google Search ad or a social media ad. ChatGPT Ads can appear as text or image advertising units beneath ChatGPT responses, with a sponsored label separating them from the organic AI-generated response.
Amazon DSP offers the buying and campaign management route. The advertising system from OpenAI's determines how and where the ads show up within a ChatGPT. This makes the integration different from simply adding another website to a conventional display campaign.
Amazon's Data Meets Conversational Context
This partnership combines Amazon’s advertising system with ChatGPT’s conversational environment. Amazon already uses shopping, browsing and streaming data to help advertisers reach audiences, while ChatGPT gives people a way to search, research and compare things through conversations. This combination gives advertisers a new way to reach people while they are exploring their needs.
The companies have not shared all the details about how ads will be targeted in ChatGPT. So, marketers should not assume that Amazon's usual targeting methods will work in the same way here. The pilot will help show how audience data and the context of a conversation can work together for advertising.
Amazon is also testing product-feed advertising in the pilot. This can use information from a product catalogue to create advertising content, which may save time for ecommerce marketers managing many products. More details about how products will be matched with conversations and how often these ads will appear have not yet been shared.
CPC and CPM Buying Are Available
The pilot supports two familiar advertising models: CPC (Cost Per Click) and CPM (Cost Per Thousand Impressions). Amazon's team helps selected advertisers set up and optimize their campaigns, while participating advertisers can receive aggregated metrics such as impressions, clicks, cost per result, CPM and CPC.
For digital marketing agencies, these metrics provide a starting point for evaluating campaign performance. But CPC and CPM alone do not tell the whole business story of a campaign. Other metrics that the agencies should pay attention to include leads, sales, conversions and overall advertising ROI.
How ChatGPT Advertising Differs from Traditional Search Ads
Typical search advertising typically begins with a particular search query that includes “Best vacation destinations in Florida.”
With ChatGPT, a user may provide more detailed information about their needs, such as planning a family trip to Florida, looking for a beach destination and staying within a certain budget.
The conversational approach gives more context surrounding the user's situation, purpose, and point in the decision-making process. Therefore, marketers might have to think outside the box when it comes to keywords and instead focus on the intent or purpose of their users' search.
This provides a new advertising landscape and may open up new doors for digital marketing firms to get to their audience throughout the research.
Key Considerations for U.S. Marketers
Currently the program is a small U.S. pilot, meaning that not every advertiser has access to ChatGPT ads via Amazon DSP. Currently, digital marketing agencies can stay up to date with Amazon Ads updates and wait for availability changes.
Existing agencies running campaigns with Amazon DSP may also want to think of how conversational ads might fit into their future media strategies. Marketers have to go beyond keywords, and they have to grasp the questions, problems and decisions that underlie a user's search if they are a user of ChatGPT since they tend to describe their needs at length.
The creative and measurement method may also need to be adapted. Ads shown with AI-generated responses have a different setting from traditional search or social media ads. It is important that the agencies understand the ad message content will fit this environment and that they establish clear KPIs (Key Performance Indicator) like impressions, clicks, leads, sales, and conversions.
It's also important to track the mentions of Organic AI and the This can help to give a better insight into campaign performance.
What Comes Next for ChatGPT Advertising
While the U.S. pilot is ongoing, ChatGPT could prove to be a new tool that digital marketing agencies can add to their media mix.
Traditional search ads reach people through search queries, social media ads appear while people browse social content, and retail media reaches users while they shop or research products.
Conversational ads provide a new space for users to ask questions, explore topics and research options, and sponsored ads appear in conjunction with the relevant AI answers. Agencies will need to understand the role each platform will play in the customer journey and campaign strategy, as they are all different.
With AI further revolutionizing digital advertising, there are new opportunities and updates on the horizon for marketers and agencies. Keep an eye out for the next fascinating digital marketing news.