ChatGPT Ads & How To Consider Using Chat UI Ads
Ads are coming to a chat interface near you!
Recently OpenAI CFO Sarah Friar commented:
“Our current business is experiencing rapid growth and we see significant opportunities within our existing business model.
While we’re open to exploring other revenue streams in the future, we have no active plans to pursue advertising.”
~150m+ Free Users…
ChatGPT has suggested they have north of 300 million (WAUs) weekly active users as of this month (and with 7.7 million users paying for ChatGPT Plus worldwide*) they know their user base has to be monetized quickly and it is clear subscriptions aren’t enough to sustain the investment needed to keep ChatGPT running and being the market leader chasing AGI.
How To Shape Your Thinking About Chat AI Ads
Ads were always an option and consumers have been engineered to accept them in free and low-cost products (ask Netflix and Disney+ of their ads tiers successes and how so many tolerate ads on YouTube), however, the challenge for Marketing & Growth leaders is to answer the following questions and to be strategic with how they tackle advertising and chat interfaces:
Answer Hallucinations: Q: How many brands will want to be connected to hallucinations?
Coaching Moment: For Brand leaders, you will need to get under the bonnet of these ads and be hugely wary of the content your brand will be displayed next to.Brand Protection: Q: Will OpenAI guarantee that scraped or collected data will not be surfaced in brand-based searches?
Coaching Moment: Be mindful that in the current market, brand searches depending on the prompt (search for those not 100% familiar with the terminology) may cause issues or highlight issues reported by third parties or aggregated data from its huge sources of information.Performance!: Q. How will brands balance the zero to low click data? How will OpenAI and the chat interface balance the right CTA for the brand within their chat UI? These are all incredibly important questions. Perplexity ad options are leveraging brand queries, so how will this essential piece of real estate be controlled and engineered to make it feel a natural experience for both user and brand?
Paying for answers or proposed solutions (downloads, view how-to guides etc) seems painful and hard to land well to a CFO who will be looking at traditional “success measures” like CAC, LTV, payback period, etc.
Coaching Moment: Remember as department leader your job is performance and impact, if you struggle with influence and sway internally this might be an expensive test that doesn’t have huge benefits for your company.Comparison: Q. How will you compare ChatGPT ads against? What will be the benchmark, how personalised will the ad opportunities be? Will it be comparable to Google? Will you look at it as the middle of the funnel and want to collect more user data to be able to target more effectively?
Coaching Moment: With spending and the majority of money from Marketing budgets being pushed into Advertising (dummies reminder/guide: Marketing is the overarching department, marketing leans more towards organic activities whereas advertising is all paid activity), be careful of how ROAS and ROI come into play and how you paint the picture in comparison to other tools.Stickiness: Q. ChatGPT and competitors are looking to become as sticky as Google search is and while improving the UI to ensure they can offer more stickiness, more stickiness leads to more usage and more value the more they will use, recommend and share their findings (imagine finding an answer to something or a complicate solution created with a prompt, it will likely lead to sharing across social media and dark chat platforms like iMessage, WhatsApp and Telegram). Chat and answer engines should mean they are product-led businesses, and growth should be driven by answers and their value add to your day. Brands will always want to tap into this and pay a premium for this.
ChatGPT had a record month in October with the smartphone apps and many are pushing towards desktop apps to move away a tab in a browser. These subtle shifts will help place and target ads in a more effectively.
Coaching Moment: As a brand leader, you should be wary of the risks and benefits of stickiness and the insights you can extract from the platform and connect with your current users and potential new customers. The chat interface and lack of direct out-clicks will re-program users over time to not click on ads and likely see ads but not action. Be mindful of the trap of diving into a new platform without understanding the new usage patterns being created or re-created.
Be Prepared To Test
To my coaching clients, I recommend being prepared, informed by your team and deeply understanding the platform before you dive in with a large chunk of your budget. AI ads will seem a no-brainer to you and members of your team but there will be many important C-Suite colleagues who will want to understand the comparables and the impact before you “risk” your budget.
The smart Marketing leaders will be leaning towards understanding how these ad options stack up and develop smart ways of testing against a performing platform, in the B2B space it might be LinkedIn, in the B2C/DTC it might be Google or longer-term ads across Meta platforms.
Chat (whether that’s Claude, ChatGPT, Google’s Gemini (or WhatsApp…) will be the interface so many brands have to go into to understand if they can gain some cut-through while targeting innovators and early adopters, first mover advantage often helps, however, the bravest sharpest brands actually wait, understand the platform, understand the job of that platform for its users and how users want to engage with ads (it took Reddit a long time to get their ads engine working well) and create the right business case and ads to stand out.
*data released in December 2024
