Today we cover advertisers reporting prices dropping for ads on ChatGPT, Google holding discussions with the Pentagon for a Gemini deal, as well as the BBC and Bauer Media planning massive workforce cuts. 

Price drops for ChatGPT ads 

OpenAI is lowering the price of ads on ChatGPT as it pushes forward with its advertising pilot. At the time of the pilot launch over two months ago, the price sat at a cost-per-mille (CPM) of USD$60 (£44.35). Now, advertisers are reporting much lower rates. 

According to Digiday, ad agency Jellyfish’s chief of media activation says that he is now seeing averages closer to $45 (£33.27), although the original base rate still holds. Elsewhere, an anonymous ad exec who said they were buying ads through Criteo, reported seeing rates range between $35 (£25.87) and $25 (£18.48) in recent days. Ad Age has even reported prices as low as $15 (£11.09). Although price changes like these can often be attributed to auction dynamics, OpenAI still hasn’t implemented a live auction. 

This comes shortly after OpenAI recently lowered the spend threshold for advertisers to take part in the pilot. Advertisers now only have to commit $50,000 (£11,085), a significant drop from the $250,000 (£18,474) required at the pilot’s launch in mid-February. 

Google in talks with the Pentagon 

While OpenAI attempts to widen its pool of advertisers, Google is becoming entangled with the Pentagon. Several publishers report that the tech titan is negotiating an agreement which will see the US defence department use its Gemini AI models in classified settings. 

The discussions follow recent widespread scrutiny of Open AI for its deal with the defence department, which saw reportedly millions of users delete the app. However, Google has proposed language with the aim of preventing the Pentagon from using its models for domestic mass surveillance or autonomous weapons without appropriate human control. The proposed deal would allow the Pentagon’s use of the models for all lawful purposes. 

Publishing giants plan cuts 

Looking at the publishing industry, we’re seeing major cuts. The BBC revealed it will be cutting up to 2,000 jobs, equal to almost one in 10 members of its workforce. The move is aimed at making £500m in savings over the next two years.

Rhodri Talfan Davies, the broadcaster’s interim director general, said that more details would be announced later this year about how its services would be affected. He did not rule out axing entire channels or services. In an email to staff, Taflan Davies outlined that the gap between the broadcaster’s costs and income is growing. “This is being driven by a number of factors,” he wrote, “production inflation remains very high; our licence fee and commercial income is under pressure; and the global economy remains turbulent.” 

Meanwhile, publishing giant Bauer Media Group has also announced plans to drastically reduce its headcount in a company-wide restructuring. According to certain sources, the cuts could affect up to 30% of its publishing staff, mainly those in the UK and Germany. The reason for the restructure was chalked up to changing consumer behaviour, with audiences increasingly turning to AI Overviews instead of visiting sites owned by publishers.