OpenAI's ChatGPT advertising pilot in Australia, which started April 17, is operating on a sliding CPM scale of $US20 to $US60, according to industry sources.
Andrew Macdonald, head of digital media at dentsu, explained the platform should currently be treated as premium pilot inventory rather than mature performance media.
"The current model points to dynamic CPM pricing in the $US15 to $US60 range, averaging around $US40 to $US45 depending on competition for inventory,” said Macdonald.
“The platform is currently light on reporting across impressions, clicks and spend, and there is a minimum Australia test threshold. Ads launched on April 17 and data is limited, but we are initially seeing costs aligned with those expectations.”
Laura Prieto, senior digital director at UM Australia, believes the pricing model was creating hesitation among some advertisers.
"ChatGPT's pricing model for the initial pilot is creating some hesitation amongst advertisers as a CPM model puts them in direct comparison with a broad range of established channels," said Prieto.
"At the bottom end of their CPM range, ChatGPT is priced higher than walled gardens and would have to prove its upper funnel efficient reach and mid-funnel effectiveness.
"At the top end of the CPM range, the pricing is comparable with premium inventory in the BVOD space which raises questions around the role ChatGPT should play in the consumer decision journey," said Prieto.
For smaller advertisers, the barrier to entry is already falling.
Elise Hedley-Dale, founder and media director at Media Words, noted the shift since the US launch.
"The pilot launched in the US in February at a $200,000 spend minimum, and OpenAI has already dropped that floor to $50,000 and opened a self-serve manager," said Hedley-Dale.
Macdonald forecast the pricing model would likely continue to evolve as the pilot matured.
"OpenAI has highlighted that its platform and models will evolve quickly through better measurement, pacing and more flexible buying options such as cost per click as the platform matures," said Macdonald.
"Pricing will evolve with continued platform upgrades and advertiser supply and demand dynamics.”
Despite the current ROI measurement limitations, Prieto believed the pilot was still worth entering.
"Once OpenAI evolves into a CPC model and outcome-based optimisations, advertisers will get a better sense of how to measure efficiency at each stage of the funnel," said Prieto.
"It's still worth testing in the pilot phase on a CPM model as it unlocks valuable insights to establish best practice and how a brand can remain competitive as the roll out evolves.”
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