For years, digital advertising has largely revolved around one basic idea: identify what someone might be interested in and place an advertisement in front of them.
Google uses search queries. Social platforms use interests, behaviour and demographic signals. Retail advertising uses browsing and purchasing activity.
ChatGPT introduces something different.
People often come to ChatGPT while they are actively trying to solve a problem, compare alternatives, research a purchase or decide what to do next. That creates an advertising opportunity based not simply on a keyword or an audience profile, but on the context of a conversation.
OpenAI has now started making advertising in ChatGPT available to businesses through ChatGPT Ads.
For advertisers, this potentially creates an entirely new stage in the customer journey.
But that does not automatically mean every company should start spending money there.
Understanding how ChatGPT advertising works—and where it fits into a wider marketing strategy—is essential.
What are ads in ChatGPT?
ChatGPT Ads are sponsored placements that can appear below a ChatGPT response.
Importantly, the advertisement is separate from the answer generated by ChatGPT. OpenAI states that advertisers cannot influence, modify or pay to be included within ChatGPT’s actual answers.
Ads are clearly identified as sponsored placements.
A ChatGPT advertisement can contain:
- the advertiser’s name
- company favicon or logo
- a headline
- descriptive copy
- a destination or landing page
- an image or creative asset
This distinction matters.
Buying a ChatGPT ad does not mean paying ChatGPT to recommend your company.
Instead, an advertisement can be displayed alongside a conversation where OpenAI’s advertising system determines that the advertiser may be relevant to what the user is trying to accomplish.
Why is advertising inside ChatGPT interesting?
The most important difference between ChatGPT Ads and many traditional forms of digital advertising is context.
Consider somebody searching Google for:
“garden furniture”
We know what they searched for, but very little about why.
Now consider somebody talking to ChatGPT:
“I have a small south-facing terrace in Madrid that gets extremely hot in summer. I need a table and four chairs that can stay outside permanently, but I don’t want plastic. What material would you recommend?”
That conversation contains substantially more context.
There is a location.
There is a product category.
There are environmental requirements.
There is a material preference.
There is potentially strong purchasing intent.
This richer context is one of the reasons conversational advertising could become particularly valuable to advertisers.
OpenAI describes ChatGPT Ads as a way to reach people while they are exploring options, comparing alternatives and making decisions.
That is considerably closer to the decision-making process than many traditional awareness ads.
How does ChatGPT decide which advertisement to show?
This is where advertisers need to forget some of what they have learned from traditional search advertising.
ChatGPT Ads are not simply another version of Google Ads keyword targeting.
OpenAI says its advertising system can consider signals including:
- the context and intent of the current conversation
- the advertiser’s landing page
- the advertising headline and copy
- contextual information supplied by the advertiser
- additional permitted signals when ad personalisation is enabled
Advertisers can provide context hints at ad-group level.
These can describe conversations, topics or keywords where the advertiser believes its product or service could be useful.
However, OpenAI explicitly warns that these are not exact-match keywords and do not guarantee that an advertisement will appear for a particular conversation.
That is an important change in mindset.
Instead of thinking:
“Which keywords should we bid on?”
advertisers increasingly need to think:
“During which customer problems, questions and decisions would our company genuinely be useful?”
That is a much more interesting marketing question.
What information do advertisers receive about ChatGPT users?
The idea that advertisers can somehow read people’s ChatGPT conversations is incorrect.
According to OpenAI, advertisers do not receive a user’s conversations, chat history, memories, name, email address, precise location, IP address or sensitive personal information.
Advertisers receive aggregated advertising performance information such as impressions and clicks.
OpenAI also states that advertising systems and ChatGPT’s response-generating system remain separate.
This is particularly important because consumer trust will be one of the biggest factors determining whether advertising inside AI assistants succeeds.
Who actually sees ChatGPT ads?
Not every ChatGPT user receives advertising.
OpenAI currently states that ads may be shown to users on the Free and Go plans.
Users of Plus, Pro, Business, Enterprise and Edu plans do not receive ads, and advertisements are not shown to accounts identified as belonging to people under 18.
This creates one limitation advertisers need to understand immediately:
ChatGPT’s total user base is not the same thing as ChatGPT’s advertising audience.
A business should therefore not evaluate ChatGPT Ads purely on headline statistics about ChatGPT usage.
How much does advertising in ChatGPT cost?
ChatGPT Ads currently supports two principal buying models.
CPM – paying for reach
Advertisers using the Reach objective pay based on one thousand advertising impressions.
This may be appropriate for campaigns focused primarily on awareness and visibility.
CPC – paying for clicks
Advertisers using the Clicks objective pay for valid clicks.
OpenAI currently recommends that CPC advertisers consider starting with a maximum bid of approximately $3–$5 per click, although actual competitiveness and costs will naturally depend on the auction and campaign.
Advertisers set maximum bids at ad-group level.
OpenAI uses what it describes as a relevance-weighted second-price auction, meaning winning an advertising opportunity depends on more than simply offering the highest bid. Relevance also matters.
That makes good positioning, landing pages and contextual relevance particularly important.
Can ChatGPT advertising be measured?
Yes.
The current ChatGPT Ads Manager reporting includes metrics such as:
- impressions
- clicks
- advertising spend
- click-through rate
- average CPC
- average CPM
- conversions
Advertisers can also add standard tracking parameters such as UTM parameters to destination URLs and analyse the resulting traffic through their existing analytics systems.
That means ChatGPT Ads should not be treated as an experimental black box.
Campaigns should still be measured against business outcomes.
A click is not a strategy.
A conversion, qualified enquiry, booking, subscription or sale is far more interesting.
The advantages of advertising in ChatGPT
1. You can reach customers during active decision-making
This is probably the biggest opportunity.
People frequently use ChatGPT to research questions such as:
- Which product should I buy?
- What software would solve this problem?
- Which destination would suit my requirements?
- What should I consider before choosing an insurance policy?
- What equipment do I need?
- Which solution is suitable for my business?
These are valuable moments because the user is already thinking about a problem that potentially requires a commercial solution.
2. Context may be richer than a search keyword
Traditional search advertising can be extremely powerful, but a search query is frequently short.
A ChatGPT conversation can reveal the actual situation behind the query.
That could allow relevant advertisers to appear in contexts that would have been difficult to identify through keywords alone.
3. Competition may currently be lower than on mature advertising platforms
Google Ads and Meta Ads have had decades to become extremely competitive.
ChatGPT advertising is much younger.
That creates an opportunity for companies willing to experiment early, understand the platform and learn what works before their competitors do.
However, “new” should never be confused with “automatically cheap.”
4. ChatGPT can introduce brands during the research phase
Not every advertisement needs to capture somebody immediately before they buy.
Being discovered while somebody is still evaluating their options can be extremely valuable.
ChatGPT Ads could therefore become particularly useful for products or services where customers conduct significant research before making a decision.
5. The advertising environment is intentionally separated from answers
From a brand perspective, clear separation between organic ChatGPT answers and paid placements is healthy.
Advertisers are purchasing advertising space, not purchasing ChatGPT’s opinion.
That distinction helps preserve the credibility of both the platform and legitimate advertisers.
The disadvantages and limitations of ChatGPT advertising
ChatGPT Ads are interesting.
They are not magic.
1. The advertising audience is smaller than ChatGPT’s total audience
Paid subscribers on Plus, Pro, Business, Enterprise and Edu do not see advertisements.
Depending on your target market, this could remove a meaningful portion of particularly active or professional ChatGPT users from your available advertising audience.
2. Advertisers have less deterministic control than with traditional keywords
Context hints are not keywords in the traditional PPC sense.
Advertisers cannot simply specify a phrase and assume their advertisement will appear whenever somebody mentions it.
The system evaluates relevance.
For marketers accustomed to controlling large keyword structures manually, this requires a different approach.
3. It is still a relatively young advertising platform
Google Ads has an enormous ecosystem of optimisation strategies, historical benchmarks, specialist software and years of accumulated campaign knowledge.
ChatGPT Ads does not yet have the same history.
Benchmarks will continue to develop.
Formats may evolve.
Targeting capabilities may change.
Measurement will become more sophisticated.
Early advertisers therefore need to accept a greater degree of experimentation.
4. A ChatGPT click may behave differently from a search click
Someone clicking an advertisement after a detailed AI conversation may have very different expectations from someone clicking a conventional display advertisement.
Landing pages therefore need to continue the conversation effectively.
Sending everybody to a generic homepage could waste one of ChatGPT advertising’s greatest advantages: context.
5. Advertising will not compensate for a weak offer
No advertising platform can permanently fix:
- an unclear product
- poor pricing
- an untrustworthy website
- slow pages
- weak conversion funnels
- confusing messaging
- poor customer service
ChatGPT Ads can generate attention.
Your business still has to convert it.
When should businesses consider ChatGPT Ads?
ChatGPT advertising is particularly interesting when customers normally research before purchasing.
That could include areas such as:
- technology
- software and SaaS
- consumer electronics
- travel
- financial services
- home improvement
- education
- professional services
- B2B products
- automotive
- complex consumer products
It may also work well when customers frequently ask questions before choosing a product.
For example, a company selling specialist outdoor equipment might want to appear when people are discussing which equipment is appropriate for a particular activity.
A software company may want visibility when businesses are comparing ways to automate a workflow.
A travel company may find opportunities while people are planning destinations and comparing accommodation or activities.
The common factor is decision context.
When should you NOT use ChatGPT Ads?
Businesses should resist the temptation to advertise somewhere simply because it is new.
ChatGPT Ads may not be your first priority when:
You have not yet mastered existing high-intent channels
If your company has clear demand on Google but your Google Ads campaigns are poorly structured, moving budget into another platform may simply create another poorly managed campaign.
Fix the fundamentals first.
You cannot measure conversions
Launching ChatGPT Ads without meaningful analytics makes it extremely difficult to determine whether the platform generates business.
Configure conversion tracking before scaling spend.
Your landing pages are poor
ChatGPT may bring a highly relevant visitor to your website.
If that person reaches a slow, confusing or outdated landing page, the opportunity is wasted.
Your advertising budget is extremely limited
When every euro needs to generate predictable short-term returns, an established channel with proven historical performance may deserve priority over a newer platform.
Testing ChatGPT Ads makes more sense when there is enough budget to actually learn something from the test.
You only want to advertise because “AI is popular”
This is one of the worst reasons to use any advertising channel.
A campaign still needs a target audience, business objective, relevant proposition and measurable outcome.
How should advertisers approach their first ChatGPT campaign?
The wrong approach would be to copy an existing Google Ads campaign and assume the same strategy applies.
Instead, begin with customer situations.
Identify the conversations that occur before someone needs your product.
Ask questions such as:
What problem is the customer trying to solve?
What alternatives are they comparing?
What concerns might prevent them from buying?
What questions do customers normally ask before contacting us?
At which point in that conversation does our product genuinely become useful?
Those questions can help shape advertising context, creative messaging and landing pages.
Then start relatively small.
Measure what happens.
Analyse which traffic converts.
Improve the campaign.
Scale only when the numbers justify it.
ChatGPT Ads vs Google Ads: should advertisers choose one?
Probably not.
For most businesses, this should not initially be an either/or decision.
Google Search captures explicit search demand extremely well.
Meta can generate discovery and demand through audience-based advertising.
LinkedIn can reach specific professional audiences.
ChatGPT introduces another potentially valuable environment: conversational intent.
The strongest marketing strategies will probably use these channels for different stages of the customer journey rather than expecting one platform to replace all the others.
A new advertising skill: understanding conversations
There is also a broader lesson here.
For years, online advertisers became experts in keywords, audiences, interests and demographic segments.
AI-driven advertising may require marketers to become experts in something slightly different:
understanding the situations customers find themselves in.
That is potentially a significant change.
Instead of asking only:
“What does our customer search for?”
businesses may increasingly need to ask:
“What is our customer trying to accomplish when they need us?”
That is a much deeper question.
And arguably a better foundation for marketing anyway.
Should your business advertise in ChatGPT?
ChatGPT Ads deserve attention.
They combine something advertisers have wanted for decades: the possibility of reaching people while they are actively discussing a problem, evaluating solutions and making a decision.
But businesses should approach the platform with the same discipline they would apply elsewhere.
Do not advertise simply because ChatGPT is popular.
Do not assume conversational targeting guarantees relevance.
Do not move large budgets away from profitable channels merely to chase the newest platform.
Instead, identify genuine customer decision moments, create highly relevant advertising around those situations, measure the results and compare them with your other acquisition channels.
ChatGPT advertising is still young.
That creates uncertainty.
It also creates opportunity.
For businesses whose customers use AI to research, compare and decide, testing that opportunity now may provide useful insights long before conversational advertising becomes just another standard part of the digital marketing mix.
