ChatGPT, developed by OpenAI, became the world’s fastest-growing consumer application in history as it reached a hundred million users within just two months of release. Still, the platform maintains a solid user base with around 600 million monthly active users.
Despite having such a huge user base, OpenAI has experienced serious financial hurdles. In 2022, the company registered losses of $540 million due to significant operational expenses. That made OpenAI seek further ways of monetizing even after launching a premium version.
Now, some internal OpenAI documents suggest that they are planning to introduce ads to monetize the massive user base of the platform. Let’s see what this means and how it affects marketers.
How Will Ads Work on ChatGPT?
Whereas OpenAI has not spilt all the beans, we can put together some pieces. As opposed to conventional search engines with banner or pop-up ads, ChatGPT’s adverts are bound to be contextual and interactive.
Consider this scenario. You ask a question to Chat GPT about travelling, and it recommends a hotel or airline offer specific to your question. Such adverts may manifest as “sponsored responses”within the dialogue, integrated in a way that does not feel inorganic or intrusive.
Companies may also be able to run promos inside custom GPTs to hit precisely the kinds of micro-target audiences brands usually just fantasize about. For instance, a wellness brand could take out an ad within a home exercise custom GPT.
What’s in It for Marketers?
Have a look at some reasons why the introduction of ads on ChatGPT is good news for an ads specialist:
- Reach a wide audience base of 600 million users.
- The best part is that most GPT users are often in a problem-solving mindset. They are further along in the buying funnel and perhaps even more receptive to targeted advertising.
- ChatGPT’s AI can scan for user queries to deliver more targeted ads. Better targeting means more conversions.
- Expect more interactive ads that are way better than conventional static ads.
- ChatGPT ads are currently in the infant stage, which means early movers get an edge before the platform becomes saturated.
What About Users?
Now, let’s spit out a hard truth. Nobody likes ads. So, how will ChatGPT’s 600 million users react?
Well, positively speaking, ads could keep the platform free forever. That’s a win for those who don’t want to shell out for a subscription. Yet, on the other hand, the free users may worry about the biased responses.
After all, the current move is a dilution of the founder, Sam Altman’s, view of a ‘user-focused experience’. So, OpenAI’s challenge is to strike a balance, delivering ads that add value (like exclusive deals or relevant recommendations) without compromising trust.
The Bigger Picture: OpenAI VS Google
ChatGPT’s plan to introduce ads is not considered as a move to remain financially stable. Many experts see it as an aggressive play to challenge Google.
ChatGPT, with its conversational search features, is positioning itself as a replacement for the standard search engine. Google’s ad-based model has been attacked as favoring sponsored content over consumer demand, and ChatGPT may be able to leverage that discontent.
If OpenAI plays its cards correctly, it could erode Google’s market share, particularly among younger users who are hungry for a cleaner and less stale search experience.
Conclusion
As far as marketers are concerned, this competition is a blessing in disguise. It opens up more opportunities. You’re no longer locked into Google Ads or Meta’s properties. ChatGPT’s ad system might provide competitive rates and creative formats. Above all, it could even offer a more interactive way to increase conversions.
And as AI-based platforms like Search GPT (OpenAI’s search answer engine) take hold, the boundaries between search, chat, and shopping will dissolve, presenting even more opportunities.
So, in a nutshell, you’re living in the best era for marketers. Everything you need is at your fingertips—success now depends on how smartly you use the choices in front of you.
