ChatGPT Ads: What Google & Meta Advertisers Need to Know

 By: Jyll Saskin Gales, Google Ads Coach

It seems like everyone is clamouring to be an expert on ChatGPT Ads, but nobody is an expert yet. Not even OpenAI!

I’ve been approached multiple times in the last 24 hours to share my perspective on the newly announced ChatGPT Ads, so I wanted to step back to analyze what we actually know versus the hype, and form a perspective before sharing it. I expect to update this article many, many times in the coming months and years, but here's what I have for you now:

The "Trust Me, Bro" Model of Advertising

The few details we have about ChatGPT Ads suggest they aren’t built for you. Sorry not sorry! Here is what the launch looks like:

• Impression-based: You pay a fixed cost for views, not clicks.

• High Minimums: These will be expensive placements with high CPMs - more expensive than any inventory you would buy on Google, Meta, etc.

• No Self-Serve: You can't just log in and start a campaign. You have to work with an OpenAI representative, likely by invitation only and/or via a large agency.

• Zero Reporting: There is no conversion tracking. There isn't even click data! It's essentially give us your money, and "trust me bro."

What this tells me is that ChatGPT Ads is not a performance marketing product - it's a brand awareness play. It’s for the Nikes and Toyotas and L'Oreals and Coca Colas of the world who have the budget and desire to buy general attention.

What a miss, right? The biggest strength of LLMs like ChatGPT is their ability to provide highly personalized, contextualized answers. But by making the ad product a high-cost, manual buy, OpenAI is making the product available only to advertisers who don't need that level of personalization.

The Predictable Pivot to ChatGPT Ads

It's almost funny to watch. Silicon Valley tech founders always start by saying ads are bad, and their product is superior because it doesn't have ads. Google’s founders famously hated ads in the beginning, and now ads bring in over $100 billion a year to keep the company running.

Sam Altman said just two years ago that he didn't want ads in ChatGPT. But with reports that OpenAI could face financial ruin within a few years, they need to make money immediately. The "ads are evil" phase is officially over, as investors are no longer content to fund user growth without corresponding revenue growth.

The Affiliate Fee: A Better Path than Ads??

While everyone is focused on the expensive ChatGPT Ads announcement, OpenAI also announced a 4% affiliate fee for product recommendations. Sam Altman actually did say a while back that he favoured the affiliate model vs the ads model, and I can see why.

An affiliate fee means OpenAI only makes money if the user actually buys something. This is much closer to the performance advertising we know and love on Google, Meta, etc.. It’s trackable and personalized. If ChatGPT can lead the right user to the right product at the right time, they will make a lot of money through these fees. This feels like a smarter (albeit smaller?) move than impression-based insertion orders.

How to Understand ChatGPT Ads for Yourself

When I look at a new feature announcement in Google Ads, I always look at it through three lenses. Let's apply those lenses to the ChatGPT Ads announcement:

1. How it benefits OpenAI

It’s the fastest way to get cash. However, they don't have the tech or sales infrastructure to run a real ad platform yet. That’s why the launch feels half-baked.

2. How it benefits Advertisers

Right now, it’s just hype. It’s the "sexiest" placement in marketing, which will drive some initial interest. But as a Google Ads coach, when my clients ask if they should try it, my answer will simple: Are you already using broad match, smart bidding, and PMax? Those Google features use AI, but still give you full reporting and transparency. Would you continue to advertise if all you could mesaure was cost and impressions? If you thought Performance Max was a black box when it launched in 2022, it's like a crystal clear vase compared to what ChatGPT is offering right now. I'm not saying it'll stay that way forever, but at least for now - no, I don't think you should run ChatGPT Ads. And frankly, I don't even think ChatGPT would talk to you without 7-8 figures in upfront investment.

3. How it benefits Users

These ads will only appear for users on the free or low-cost tiers (for now). We don't yet know if this will hurt user trust. If the answers feel like paid shills, people might leave for the plethora of LLM alternatives out there. I expect OpenAI will be very conservative with how often these ads appear to avoid a user revolt. Or maybe they won't; Silicon Valley may be a bastion of conservative politics, but definitely not conservative business practices.

Looking Ahead: Where Ads Are Going

Advertising isn't evil - it’s how the internet stays open. (Well, it's arguable how open the internet is these days, but that's a converation for an other day!) It was never a matter of if ChatGPT would have ads, but when. And that time is 2026.

For now, don't feel like you're falling behind because you aren't running ChatGPT Ads. And as a paid ads practitioners, please try to stay grounded in reality rather than falling for the hype. Unless you have a massive brand budget and don't care about tracking your return on investment, you aren't missing anything yet.