A Probably-Too-Soon Analysis of ChatGPT Ads
OpenAI introducing ads into ChatGPT feels inevitable in hindsight, even if it was a controversial decision. A platform with hundreds of millions of users, increasingly replacing traditional search behavior, was always going to attract marketers.
Currently, it’s early. Maybe too early to draw any strong conclusions. That probably feels like a cop-out, but we’re just being real. The results have been mixed, but this new kind of ad is still in its infancy, and there are already enough signals to make the space worth paying attention to. There are certainly opportunities as well as things we’d like to see improve as people making ads.
Why It's Worth Paying Attention to Chat Bots as an Advertising Medium
The biggest reason to be excited is scale. ChatGPT has reportedly crossed 900 million weekly users, giving it a level of reach that starts to resemble the largest consumer internet platforms. And only a tiny percentage of ChatGPT users are actually paying for it, meaning that the vast majority of 900 million users are a potential audience for ads.
That doesn’t make it as popular as the most popular search engines on the planet, with Google having about five billion monthly users, 900 million is still nothing to sneeze at.
For two decades, search engine marketing has been one of the most effective forms of digital advertising because it captures intent at the exact moment users are looking for answers. Chatbots potentially go one step further: instead of showing ten blue links, the interface synthesizes recommendations directly into the conversation.
The Concerns
That said, the current state of chatbot advertising has real problems. The biggest issue is cost. Open AI prices their ads at 60 dollars per thousand impressions—dramatically pricier than platforms like Meta Ads Manager. They also say “We recommend a starting max bid of $3-5 USD per click,” which is obviously a recommendation and not a definitive range, so that leaves a lot to the imagination. Google paid search ads can vary wildly, with a select few keywords being so expensive that headlines tell people not to click the link and instead call a number. However, plenty of them are much cheaper than even that three-dollar figure.
At those prices, advertisers expect either strong conversion rates or premium-quality targeting. Presently, neither appears fully proven. Early click-through rates also seem weaker than traditional search ads.
Again, it’s still early, so maybe this data doesn’t mean a lot, but the overall results are mixed. The top-performing brands have seen click-through rates better than 5%, which is great. That would probably make their prices well worth it. But the site-wide average is 0.68%, well below what you’d expect from the first PPC ad, which is 2.1%.
Early Ad Examples
Okay, enough numbers. Let’s look at the ads themselves and see what we’re working with. Here are a few examples of the types of ads you might see on ChatGPT. These have been very unscientifically gathered by asking it questions until it gave us some examples:
Format Limitations
There really isn’t a lot to work with here. One of the greatest challenges with advertising is dealing with limitations of certain mediums, delivering the most pointed messaging possible when you’re only allowed 60 characters or less. The goal is also to use the most impactful graphic even if there isn’t much real estate for it. Mad Genius prides itself on being able to do that, but they’re really not giving us much here.
OpenAI’s page dedicated to its ad basics doesn’t actually say a hard character limitation but instead says:
- Headline: Aim for 16 characters
- Description: Aim for 32 characters
- Creative (they’re talking about the image): Avoid using logo as primary visual
That’s not a ton to work with. It’s worth noting that despite these character count recommendations, the examples we just showed you tend to exceed those. That ad for Moburst has a description that is two lines long, and you can see it all without clicking a “Read More” button, despite the recommendation only being 32 characters.
There are plenty of other ad formats on Meta and other platforms that also have short character counts, but they also have a lot of variety. Meta has dozens of ad types with varying amounts of copy permitted, and when you’re running a campaign, you’re usually using multiple types.
What Would Make a Good ChatGPT Ad Today?
While difficult, we’re not defeatists, so let’s try to figure out the best way to utilize this new format as it is. Let’s start with the image. Open AI recommends not having a logo as the image. We respectfully disagree. The ads just don’t take up that much real estate, so photography or graphics would not really get the chance to do any kind of storytelling or connect any dots. Including copy in the image is just about out of the question unless you have a six-layered monocle like that gentleman from Toy Story 2.
Of these three examples, the Chime one looks the most professional and connects the dots for the audience the fastest. When you don’t have time or space to do much more than say “This is who we are and this is what we do,” then just say that. The headline says “Simple Online Finance” and even if you don’t click on that particular ad, you might see that logo in a week and think, “Hey that’s the simple online finance thing. Let me find out more.”
Between the headline and the description, at least one should be simple and direct. Priority number one is to tell the audience who you are and what you’re offering, but if you can do that in the headline, then you have two whole lines of text in the description to be memorable. People are using ChatGPT either because they’re trying to get answers or do a task, so give them something that will make them notice you.
For example, we came across one ad for Wired.com with the headline, “No Hallucinations.” Incredible job. No notes. It's a tongue-in-cheek joke about how AI sometimes hallucinates answers, with the implication being that Wired doesn’t. Those two words do a lot of heavy lifting and do it while speaking in a language that the audience on this platform understands. You’ll have to forgive use for not including it here. Our hubris was our downfall, not taking a screenshot on first glance and thinking we could find it again, which actually leads to our next point.
Problems With Targeting
This is just anecdotal evidence, which is known in scientific circles as the weakest form of evidence, but in doing research for this blog, it was difficult at times to actually get ChatGPT to show us ads. In looking for that Wired ad, we asked about the publication itself, and when that didn’t work, we asked more broadly about publications that talk about science and technology, and then when that didn’t work,
It felt like when you were asking specifically for product recommendations, it would rather answer the question than give you any kind of ad, which feels like a missed opportunity.
So, Is This the Next Big Ad Channel?
This blog potentially reads like we think there’s more bad than good when it comes to ChatGPT ads, and honestly, that might be true, but we’re not dismissing them. There is definitely a lot of potential here and they’ll likely work out the kinks as time goes on. Chat bots as an advertising platform are entirely new, so it certainly wasn’t going to be perfect right away.
There are currently reasons to be concerned about cost, the ability to target, and the amount of creative you can put in the ads, but those are all things that could improve. We’d certainly like to see a future where there are different ad formats with varying amounts of copy and image sizes, and that could totally be in the cards. The user base for chat bots just a few years in is just too enticing to ignore. That 900 million monthly user base is only going to rise, and ChatGPT is far from the only chat bot out there. Others could follow this trend.
That doesn’t mean conversational ads will fail. In fact, they may eventually become one of the most important evolutions in digital advertising since paid search itself. It just means we’re still in the phase where everyone is trying to figure out what this medium actually is. And historically, that’s where the most interesting platforms begin.
Want to start experimenting with ChatGPT ads? Or maybe you want to stick to more traditional media. Either way, we’re ready to get the most out of your ad space. Schedule a time to come down to the labs and discuss. We'll have our AI agent set up a time with your AI agent. You're also welcome to use this convenient form.