ChatGPT Ads are Here and They Killed the Search Ad

OpenAI just declared war on Google Ads... and this might be the advertising format we’ve all been waiting for.

At the time I’m writing this, OpenAI recently published an article called:

“Our approach to advertising and expanding access to ChatGPT”

With it, they announced they’ll soon start testing ads inside ChatGPT.

For me, someone who’s been working with ads for years, this sounded super exciting at first. But I was also skeptical.

Is this going to be just another ad platform draining our budgets while spawning a new wave of gurus claiming they’ve found the holy grail of advertising?

After a closer look though, I think this might actually be the ad format we’ve been waiting for.

Let me explain.

How do ChatGPT ads work?

In their article, OpenAI wrote:

To start, we plan to test ads at the bottom of answers in ChatGPT when there’s a relevant sponsored product or service based on your current conversation. Ads will be clearly labeled and separated from the organic answer.

Looking at their example, here’s what happens: You’re chatting with ChatGPT and when a product or brand gets mentioned in your conversation, a relevant ad appears in a frame below the message.

Click on it and you get directed to where you can buy it (I assume).

Source: OpenAI Ads

(The frames remind me of TikTok shopping. But I'll take it.)

Sidenote: What would be interesting is if these ads did not even need explicit product mentions and could pop up based purely on the topic you’re discussing… but that’s something we will see as soon as it is rolled out.

But here’s where it gets really interesting.

OpenAI also wrote about a second ad form:

The best ads are useful, entertaining, and help people discover new products and services. Given what AI can do, we're excited to develop new experiences over time that people find more helpful and relevant than any other ads. Conversational interfaces create possibilities for people to go beyond static messages and links. For example, soon you might see an ad and be able to directly ask the questions you need to make a purchase decision.

Source: OpenAI Ads

This is the part I love.

First, they actually get it. Ads need to be useful and entertaining nowadays.

Second, and this is huge, you can ask questions directly in the conversation to get everything you need to make a purchase decision. ChatGPT does the heavy lifting for you.

Then all that’s left is to buy.

Why this will be a game changer

Let’s look at the numbers.

ChatGPT has around 858 million users pumping out over 2.5 billion prompts per day (Explodingtopics)

For comparison, Google handles about 16.4 billion searches daily (Demandsage).

So yeah, there’s massive ad potential here. Even if it’s just rolled out on the free and lowest ChatGPT tiers for now.

But the real game changer: AI ads break the rules

Back in my early marketing days, I stumbled across those terrible terms “push” and “pull” marketing.

The basic idea:

Push means pushing the product to customers through distribution channels.

Pull means creating demand so customers pull the product from the market.

Here’s how it maps to current ad channels:

Google & search ads (Pull) → You search, product appears, demand is created, you pull it from the market.

Social Media Ads (Push) → You scroll through your feed, ads get pushed into your face, if it’s interesting you buy.

Now here comes this new kid on the block.

AI ads don’t fit neatly into either category. They do both.

You ask ChatGPT about a product or brand, ads appear (pull).

You casually chat with ChatGPT about random topics, it somehow ends up recommending products in the conversation, ads appear (push). And this is more contextual. While in social media ads often disturb the flow on your feed here in ChatGPT they are naturally embedded.

Either way, someone is ready to buy or way closer to making that decision.

They either asked for specific products, meaning they already want to buy (this is how Google ads work best). Or they’re at a point where ChatGPT just moved them significantly closer to the buying decision by creating enough demand while answering all their questions - questions they’d normally have to hunt down on your website - and then routes them straight to the checkout.

That being said, AI ads could be the most efficient ad format we’ve ever seen.

Last Words

Of course, it all depends on how it’s balanced, what it costs, whether it’s an auction model like Google, and how oversaturated it becomes.

And it also will be interesting what the targeting criteria are and how ChatGPT gathers these information and provides them.

But like with every platform - early adopters win. So as soon as you get the chance, test it. I’m pretty sure it’ll be worth it.

Nevertheless.. I have mixed feelings about this whole thing. My marketer heart screams “hell yeah!” while my nerd heart screams “please, not this.”

When it comes to AI, my vision has always been having a J.A.R.V.I.S.-like assistant. You know, like Ironman. 😂

But okay, it’s a long way to get there… And apparently we’re starting with ads.

I guess that’s how it goes.

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