OpenAI Accelerates Ad Sprint With Meta Hires, Slashed Prices

As OpenAI has jockeyed with Anthropic to win over developers with new models and tools this year, its advertising business at times has seemed like an afterthought. Not anymore.

Over the last few months, the company has unleashed a flurry of new products and tools to court advertisers, even as it has cut ad rates. That’s helped lure a lot more advertisers, new data show. The company has also gone on a hiring spree. Nearly half of the roughly 140 OpenAI employees working on ads joined between July and September, according to Crustdata, which tracks employees’ public profiles. Meta Platforms, where ad chief Dave Dugan spent 12 years, is the biggest source of talent.

The hiring spree and some senior-level departures have contributed to a lot of internal change. OpenAI’s ad team has reorganized seven times since it launched in February, according to two people familiar with the matter.

OpenAI is trying to make advertising, which is still small relative to the rest of its business, a significant driver. Since OpenAI started showing ads in February, annualized revenue from ads reached $1 billion in late August. In comparison, OpenAI neared a $50 billion annualized revenue pace for its overall business at the end of September, largely thanks to subscriptions to ChatGPT and related products, such as its Codex agent, as well as direct sales of its models.

And despite growth in its ad revenue, OpenAI is likely to fall short of the lofty goals it outlined to investors early this year. The company then projected it would hit $2.4 billion in total 2026 ad revenue.

Success recruiting more advertisers should boosting that growth. OpenAI had about 60,000 advertisers on its platform in early October, up from 20,000 in late August, according to Dan Salmon, partner at New Street Research, a Wall Street research firm.

U.S. ad spending on ChatGPT is projected to increase 40% in October from September, estimates Sensor Tower, which tracks app and advertising activity and extrapolates using samples. OpenAI’s advertising has expanded to more than 60 countries.

That growth has sparked a lot of curiosity among advertisers and agency executives about the business. Last Thursday dozens of people lined up to get a few words with Dave Dugan, OpenAI’s vice president of global ad solutions, after a packed session with customer Home Depot during New York’s Advertising Week.

“We’re building the fastest-growing ads business in the world, and we’re hiring from a diverse range of companies across the industry, with no single company focus,” said Dugan later in a statement to The Information. “That breadth of talent keeps us shipping at pace and [turning] advertiser feedback into better products.”

OpenAI is fighting an uphill battle to take a slice of a digital advertising market dominated by Google, Meta and Amazon. Most advertisers are still spending test budgets—typically 1% to 5% of annual ad spending—on ChatGPT, though a few have expanded far beyond that, according to people who work directly with advertisers.

“It takes a while to write contracts, acquire new advertisers and gain market share,” said Kate Scott‑Dawkins, who runs the global research practice of GroupM, the media investment group of ad giant WPP. She expects Google will be the majority player in advertising inside AI chatbots and search for some time. But she said she hadn’t seen any ad channel grow as fast as OpenAI.

Google, Meta Hires

Fidji Simo, a Facebook veteran of more than a decade who joined in 2025, stepped back from her full-time role in early July. Since then, Dugan has restructured the team into vertical groups, each dedicated to an industry such as retail, travel or finance, and created a separate team that handles ad agencies. That setup resembles how more established ad sellers like Meta and Google organize their sales teams, said the people. A Meta spokesperson declined to comment.

The senior ranks are sprinkled with former salespeople from Meta and its competitors, such as Vijaye Raji, who spent 10 years at Meta before becoming chief technology officer of OpenAI applications a year ago. Mitch Pilar, a 12-year Google veteran, and Andy Sinn, who spent about a decade at Meta, joined in July to sell ads to brands and agencies in Australia and New Zealand. And in late September, Mark Bambury, who spent a dozen years at Roblox and X, became OpenAI’s head of ads for Europe, the Middle East and Africa.

Test Budgets

When OpenAI launched its advertising pilot in February, it started by courting big brands and the agencies that buy ads for them, including Expedia, Target and Ford, along with ad agencies Omnicom, WPP and Dentsu. More recently, OpenAI has more aggressively been chasing small and midsize businesses—the type of customers that made Meta an advertising juggernaut.

To entice those smaller advertisers, OpenAI is leaning on outsourcing firms to sell ads and help advertisers set up their campaigns. These include TP (formerly known as Teleperformance), Concentrix and consulting giant Accenture.

Advertisers are slowly increasing their ChatGPT budgets as they learn how to use the platform, according to nine agencies and tech firms that run campaigns on ChatGPT.

One big incentive: Ad prices on ChatGPT have fallen since the launch, when it charged some large buyers premium prices. A click on a ChatGPT ad costs about $5, versus $30 to $50 on Google for the same business software clients, said Cole Furrh, founder of InterTeam Marketing, an agency that works with advertisers.

Filip Nakov, whose agency, Nakora, works with clients selling cybersecurity, AI and legal tech tools, said the ads were working surprisingly well: For $1,000 in spending, his clients get about 10 customers from ChatGPT, versus five from Meta and one from Google. Some of his clients have put up to 40% of their ad budgets, which range from $1,000 to $30,000 a day, into ChatGPT, he said.

“When ChatGPT works, spend climbs to hundreds of thousands or more,” said Marcos Ciarrocchi, co-founder of the Graphite agency.

Meanwhile, OpenAI has also expanded the type of ads shown to users.

Its first ads, launched in February, appear as labeled sponsored ads below answers to queries, similar to Google search ads. These, known as last-click ads, target users who already intended to buy something. Currently about 20% of queries on ChatGPT signal a desire to purchase a product or a service, Dugan said last week.

More recently, ChatGPT ad staff have focused on reaching people before they’ve started to query the chatbot about a purchase. Last week OpenAI announced a visual ad format that uses images to show how products and services could fit into people’s lives, and it has told agencies it wants to test a greater number of images and video, according to two people with knowledge of the matter.

It’s also introducing more of the tools advertisers say they need to track the effectiveness of ads. Last week, it announced a string of partnerships with outside measurement firms that track what customers did after clicking an ad. But advertisers want more, such as tools that let advertisers compare a ChatGPT ad buy with a Google buy, said two people who work with OpenAI.

Advertisers also complain they can’t see which conversations trigger their ads. “It’s a black box with no visibility whatsoever,” said Farhad Divecha, CEO of marketing agency Accuracast. That leaves advertisers guessing when they write the instructions that tell ChatGPT where to show their ads, he said.

Some ads also land in the wrong place, according to Adthena, a company that tracks search and AI ads. In an analysis of about 187,000 ad placements, Adthena found that about one in nine ads was unrelated to the user’s question. A small number of these ads appeared inappropriately next to sensitive questions: An ad for push-up bras appeared next to a query about breast cancer, and an ad from a short-term lender showed up next to a query about debt relief.

An OpenAI spokesperson said it was listening closely to feedback from advertisers and agencies and adapting its products, launching new features in response.

Alix Coutures is a reporter covering digital advertising focused on OpenAI, Google and AI startups, based in New York City. She can be reached at [email protected] or on Signal at Alix_coutures.49