Most advertisers still haven’t run a single ChatGPT Ads campaign.
We’ve been running campaigns since the platform opened up, and we believe that most businesses should start a test this quarter.
Here’s the main headline as to why.
In one B2B lead gen account we manage, ChatGPT Ads clicks cost $0.76 on average over a 30-day period. Google Search clicks for the same business, selling the same service, over the same 30 days cost $10.46.
The ChatGPT traffic had a much lower conversion rate at 0.8% versus 6.64% on Google. However, the clicks were so cheap that cost per lead came in at $92.21 on ChatGPT and $157.57 on Google. (The full numbers are in our ChatGPT Ads case study.)
So if your business is already running paid ads, this is a no-brainer why costs are low.
But that’s not the only reason why.
Here are five more reasons why ChatGPT Ads should be part of your marketing mix right now (number 3 is one to pay close attention to).
1. Your customers are already asking ChatGPT
OpenAI says ChatGPT now reaches 1.2 billion people each week.
Source: OpenAI.com/index/new-chatgpt-ads-format-and-measurement/
Many of those conversations are about buying something.
A chat about renovating a house quickly evolves into getting quotes from local construction companies or pricing different types of materials.
One limit to know up front: ads only show to users on the Free and Go plans whom OpenAI believes are 18 or older. Plus, Pro, and business-tier users don’t see ads. If your buyers mostly pay for higher tiers, your reach will be smaller.
That said, the number of households paying for AI subscriptions is in the low single digits.
Source: x.com/a16z/status/2105726958021885977
2. It’s cheap to test, and that won’t last
During OpenAI’s pilot, advertisers needed minimum commitments of $200,000. Now you can launch a campaign with just a $25 daily budget.
Clicks are still reasonable in most of the accounts we run. Across our clients, the median numbers so far are a $2.12 average CPC, a 1.39% CTR, and a $29.61 average CPM.
OpenAI says ChatGPT Ads reached a $1 billion annualized revenue run rate in less than 200 days and is now used by tens of thousands of advertisers. More advertisers bidding on the same conversations will push CPCs up. The cheapest time to learn a platform is before your competitors show up.
Source: OpenAI.com/index/expanding-access-to-ai-with-chatgpt-ads/
3. The intent looks more like search than social
A ChatGPT ad shows up inside a conversation and is matched to what the person is asking about. According to OpenAI, its ads system uses the context of the current conversation to pick a relevant ad, plus the user’s broader ChatGPT activity where that setting is turned on.
That’s why we benchmark ChatGPT Ads against Google Search campaigns instead of Meta.
The user has already told the platform what they need before your ad appears.
You won’t find keywords, though. You steer targeting with “context hints,” a free-text box at the ad group level, along with the AI interpreting context from your ads and landing pages. That takes some adjusting if you’ve spent years building keyword lists.
However the upside is huge.
You’re reaching people based on what they’re actively asking about.
That has the same game-changing potential that Google Ads did when they launched.
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See if you're ready for ChatGPT Ads.
4. It adds to Google instead of replacing it
Google-commissioned Ipsos research found that 99% of people who go to ChatGPT to look into products or services also consult Google Search to help with purchase decisions.
Source: business.google.com/ca-en/think/consumer-insights/ai-holiday-shopping-shifts/
Google has an obvious interest in publishing that number. Still, the takeaway for advertisers holds up: ChatGPT Ads gets you into the research earlier, and Google Search still catches buyers during the customer journey.
It can also reach people your search campaigns miss. In one GA4 comparison we ran of about 1,500 users who reached the same website from Google Ads and ChatGPT Ads, Google traffic converted at 3.71% and ChatGPT traffic at 0.21%. But ChatGPT Ads reached people who weren’t necessarily searching for a solution on Google.
OpenAI’s measurement partners report something similar. Triple Whale found 93% of Portland Leather’s visitors from ChatGPT Ads were new, according to OpenAI.
Source: OpenAI.com/index/new-chatgpt-ads-format-and-measurement/
So don’t pull the budget from Google Search to fund this.
Run ChatGPT Ads as a separate, incremental test.
5. Early advertisers learn first
Nobody has a ChatGPT Ads playbook yet. The advertisers testing now will have one before everyone else.
A few things we’ve learned so far:
- Headlines with direct language often get higher CTRs and more impressions.
- A photo of a real, recognizable expert as the ad image has performed well
- In a context hints test with the same ad in two ad groups, the group with a plain keyword list served far more often than the group with full conversational questions. It also had a slightly higher CTR and lower CPC.
- We’re seeing a high percentage of view-through orders rather than click-through orders for some ecommerce advertisers.
OpenAI is shipping fast, too. In a related ChatGPT Ads article we published, we wrote about how since August it has added a Maximize results bid strategy, platform targeting, view-through conversion reporting, and integrations with Shopify and HubSpot. On Oct. 5 it announced a new visual ad format that will start testing in the U.S. later this month with an initial group of advertisers.
Who should wait
ChatGPT Ads isn’t a fit for every business yet.
Check your category first. OpenAI limits or bans ads in categories like financial services and gambling, and some of its policy pages contradict each other. We tried ChatGPT Ads for a bankruptcy firm, and the account was disapproved for a “disallowed industry.”
Lead quality is still an open question. We’re generally seeing lower conversion rates from ChatGPT ads as compared to Google ads, but less expensive cost per clicks can offset that.
You also get less data than you’re used to. You can’t see the conversations or themes that triggered your ad. Targeting a custom audience requires at least 25,000 matched users, which rules out a lot of small businesses.
To fully analyze whether the platform is right for your business right now, we highly recommend you use our FREE ChatGPT Ads Readiness Scorecard tool.
In less than 5 minutes, you’ll know exactly if ChatGPT Ads are right for your business right now, and any gaps you’ll want to address before you invest a dollar in advertising.
It’s the ideal first step.
If you want expert help, our ChatGPTs Ads team is here to assist you as well with a live FREE Audit Consultation Call.
And if you’ve already completed the Readiness Scorecard, bring that to the meeting so we can assess your gaps (if any) and the best strategy right now for your business with ChatGPT Ads.
That call is 100% FREE, and it can be booked using the form below.
