The news: Amazon is letting select US advertisers buy ads on ChatGPT using the retailer’s first-party data, per Adweek.

• A current pilot with OpenAI allows advertisers to extend their Amazon campaigns to ChatGPT through the retailer’s demand-side platform (DSP), using Amazon’s first-party data to target users of the AI platform.
• The feature will initially be available as a managed service. Amazon Ads reps will help advertisers build and manage their campaigns, as well as offer “context hints” to match ads with the correct topics, conversations, and keywords.
• Amazon will be responsible for setting up and managing campaigns, while OpenAI’s ad platform will determine when and where ads show up.

Why it matters: The partnership offers significant benefits to both companies.

Partnering with Amazon gives OpenAI access to a much larger group of advertisers who could move the company closer to its ambitious $2.5 billion ad revenue goal after recently crossing the $1 billion mark.

For Amazon, the deal brings the opportunity to increase visibility in AI search results without having to commit to a commerce partnership with OpenAI, something the retailer has steadfastly avoided as it seeks to maintain control of shopper data and the customer experience. The decision to help power ChatGPT advertising enables Amazon to maintain its position as the place where consumers go to complete their purchase. That, in turn, could help protect its ecommerce and retail media dominance.

Implications for marketers: The move suggests that AI assistants may increasingly act as new gateways to product discovery. That raises the stakes for marketers to account for AI environments in retail media and commerce strategies, particularly as consumers turn to AI to discover, research, and evaluate products before deciding to purchase.

Additionally, partnering with OpenAI on advertising will give Amazon deeper insight into how users respond to conversational ads, enabling it to both refine its targeting on third-party platforms like ChatGPT and improve its own AI advertising capabilities. That could unlock yet more growth for Amazon’s ad business, which we expect to more than double from 2024 through 2028.

Implications for retail: Amazon’s ChatGPT advertising partnership allows it to benefit from the platform’s growing importance in guiding product discovery and purchases, while simultaneously taking advantage of the fact that most shoppers (for now) prefer to transact on a retailer’s site. Just 1 in 10 AI-assisted digital shoppers choose to purchase on a native AI interface, compared with 69% for retailers’ apps or websites and 14% in physical stores, per a Publicis and EMARKETER survey.

The deal therefore exposes Amazon to ChatGPT’s role higher in the purchase cycle without requiring it to lose control of checkout.