Quick Look:

  • OpenAI is partnering with LiveRamp as the artificial intelligence startup builds out advertising infrastructure for its flagship product, ChatGPT. The news was announced via a release shared with Marketing Dive.
  • Advertisers running ChatGPT ad campaigns will be able to tap into LiveRamp's Conversions API Hub to address signal loss and improve measurement beyond browser-based tracking. The CAPI hub relies on privacy-safe server-to-server connections as an alternative to traditional web tracking methods like cookies.
  • ChatGPT's ad business entered testing in February and has attracted many brands hoping to reach the popular chatbot's 1 billion users. The business has also drawn criticism over a lack of transparency, a hurdle OpenAI may overcome through partnerships with companies like LiveRamp, which was acquired by Publicis Groupe in May.

Deep Dive:

LiveRamp, a leading data collaboration platform, is among the first third-party ad tech companies to work with OpenAI on ChatGPT advertising. OpenAI's advertising bet has sparked both excitement and skepticism since its debut earlier this year. The startup is working to boost its appeal to brands while preparing for a highly anticipated initial public offering. Advertising could become a key front for OpenAI's revenue growth, and investors will be watching closely given the high costs of AI development. Wednesday's announcement suggests this is just the beginning of the LiveRamp-OpenAI partnership.

"Looking ahead, LiveRamp will continue to work with OpenAI on its advertising journey, and we will look for more ways to bring the power of the leading data collaboration network to ChatGPT and beyond," Travis Clinger, LiveRamp's general manager and chief connectivity and ecosystem officer, wrote in a blog post about the news.

Brands' ability to use LiveRamp's CAPI is expected to address concerns around targeting and measurement for ChatGPT ad campaigns, including a lack of visibility into how these campaigns drive results. ChatGPT aims to bring its ads closer to mature digital channels in measurement and attribution capabilities, strengthening its position in performance marketing.

LiveRamp launched CAPI in response to cookie deprecation and to allow brands to link conversion actions, such as offline purchases, to digital marketing on platforms like Meta, TikTok, and Snapchat. Data matching is achieved through secure server-to-server connections, helping to alleviate potential privacy concerns.

Criteo became OpenAI's first ad tech partner in March. The commerce media-focused company recently lowered minimum spend thresholds significantly and introduced other incentives to attract retailers to invest in ChatGPT ads, per Adweek last week. Leading demand-side platform The Trade Desk has also reportedly been in talks with OpenAI about ad partnerships.

All signs indicate that ChatGPT is experiencing the typical growing pains of an emerging platform. If OpenAI can navigate this skillfully, delivering ads relevant to users' chat context while improving performance, it could become a powerful player in the digital advertising ecosystem—where marketers have long craved more diverse options. The three industry giants, Google, Meta, and Amazon, are also realigning their platforms to better seize the AI opportunity.

OpenAI's latest deal also comes during a transitional period for LiveRamp. LiveRamp was acquired by advertising agency network Publicis Groupe in May for $2.2 billion. Publicis said LiveRamp's interoperability with more than 25,000 publishers and hundreds of data and technology partners will advance its goal of building more sophisticated agentic AI on behalf of its clients.