Well, this is something.
According to reports, OpenAI will notify advertisers interested in posting their promotions in ChatGPT comments they must spend at least $200,000 in expenses upfront to even qualify for the first live launch.
That is ambitious, to say the least.
OpenAI has announced an upcoming beta trial of ads in ChatGPT comments last monthwhile it also published examples of the types of promotions it plans to include in ChatGPT responses initially.
As you can see in these examples, for a question about Mexican recipes, ChatGPT can include a promoted message at the bottom of the answer highlighting possible guidance you may want to consider from a brand partner. For a travel inquiry, ChatGPT may include a promotion for accommodation options in the region you are viewing.
Will those promotions be effective?
Well, having your brand name present in ChatGPT responses can be valuable, while there is certainly interest in ChatGPT ads given the increasing number of searches being entered into the app.
There are also indications that point to this Referral traffic from ChatGPT converts fasterso it can be valuable to ensure your brand is at least present in related searches.
But there are a lot of ifs, and not a lot of definitive answers about how exactly AI referrals are converted at this stage.
For example, Rand Fishkin, co-founder of SparkToro, recently published the results of his own tests which underlined the inconsistency of AI responses to the same or similar questions. That would mean that the presence of AI, a data point that several SEO/AI visibility apps now offer, might not be the best indicator of relevant mentions, as the variance between answers could mean that even if you are mentioned in many searches, there could be many more that aren’t.
There is also a question about the value of these types of additional mentions, rather than your brand being mentioned in the AI response itself.
Will people click on these paid ads, or are they more likely to simply ask ChatGPT for more information about accommodation options and the best priced deals for them?
I think the comparison here would be Google Ads, and whether people are more likely to tap on the first promoted results, or scroll to the ranked SERP, which may be more indicative of what you want, based on Google’s display methodology. And that really depends on the question. If you’re looking for a particular brand or company but can’t remember the name, those Google ads are undoubtedly a winner, but if you want the best results, many people will probably just ignore the sponsored results.
Is that also how it works in ChatGPT?
If the ChatGPT response mentions your brand in the response, that is certainly more valuable than an additional mention. But then again, presence and exposure are also valuable, and perhaps it can be helpful if your brand lingers on related questions.
But I bet ChatGPT ads will reduce the conversion rate of ChatGPT referrals.
ChatGPT referrals, as noted, currently have high conversion rates, which search experts attribute to these chats, leading to more specific results, which in turn means more qualified, targeted website visitors.
Google has noted the same, explaining that:
“With AI Overviews, people search more and ask new questions that are often longer and more complex.”
That then leads to people clicking through to pages where they are more likely to convert, but if people tap paid promotions instead, that accuracy decreases.
Is that better for ChatGPT as a product?
Maybe not, but OpenAI needs to make money too, because billions have already been outlined trillions in the spending it needs to maximize its AI ambitions.
To repay that kind of expense and become a profitable company, it needs a lot of products and a lot of customers. OpenAI forecast revenue earnings of $20 billion by 2025, which is nowhere near what it will need to maintain a viable business.
Can OpenAI make enough money from its offering to support the necessary expenses?
I don’t know, but as AI enthusiasm begins to plateau, these are the questions that will be asked of all AI projects, and of them all, OpenAI has the fewest resources to lean on to strengthen its operations.
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