ChatGPT Ads: How They Work and Should Your Business Be Using Them?
For years, businesses looking to advertise online have largely focused their budgets on two major ecosystems: Google Ads and Meta Ads across Facebook and Instagram.
Now there is another platform worth paying attention to: ChatGPT Ads.
As people increasingly use ChatGPT to research products, compare services, plan purchases and ask for recommendations, OpenAI has introduced advertising directly within ChatGPT. For businesses, this creates an entirely new opportunity to reach potential customers while they are actively researching a problem or making a decision.
But how do ChatGPT Ads actually work? Are they better than Google Ads or Facebook Ads? And are they suitable for small and local businesses, or mainly large brands?
What are ChatGPT Ads?
ChatGPT Ads are sponsored placements that can appear below a ChatGPT response.
They are clearly identified as advertising and remain separate from the answer generated by ChatGPT. Importantly, advertisers cannot pay to influence what ChatGPT says or have their business inserted directly into an organic answer.
A typical ChatGPT ad can include the advertiser’s name and logo, a headline, description, image and link to a landing page.
For example, someone might ask ChatGPT:
“What should I look for when choosing an ergonomic office chair for working from home?”
ChatGPT could answer the question normally, and a relevant sponsored ad for an office furniture retailer could then appear underneath the response.
The advertising opportunity therefore comes from being visible while someone is already researching a relevant topic.
How does ChatGPT advertising work?
One of the biggest differences between ChatGPT Ads and traditional Google Search Ads is how the platform understands advertising intent.
Google Search has traditionally relied heavily on searches and keywords. An advertiser might target phrases such as “office furniture Adelaide”, “commercial office chairs” or “buy standing desk”.
ChatGPT Ads can look at the broader context of a conversation.
Advertisers provide what OpenAI calls context hints. These describe the situations, conversations, needs and topics where a particular product or service could be useful.
These are not exact-match keywords. Instead, they help ChatGPT Ads understand the intent surrounding the advertiser’s offering.
Imagine an accounting software company.
Instead of only targeting a search such as “small business accounting software”, a ChatGPT campaign could potentially be relevant when someone is discussing how to manage invoices, reduce bookkeeping administration, choose software for a new business or compare accounting systems.
That additional context is what makes the advertising model particularly interesting.
How much do ChatGPT Ads cost?
ChatGPT Ads Manager currently supports several campaign models, including campaigns designed around impressions, clicks and conversions.
Advertisers can use CPM campaigns when the objective is visibility and reach, CPC campaigns when the objective is website traffic, and conversion-optimised campaigns where delivery is optimised towards actions such as purchases, enquiries or sign-ups.
For CPC campaigns, OpenAI currently recommends starting with a maximum bid of approximately US$3–$5 per click, although actual costs will depend on competition, relevance and the advertising auction.
Australian advertisers can now access the self-service Ads Manager. The current minimum daily campaign budget for accounts billed in Australian dollars is A$25 per day.
As with any digital advertising platform, however, the important number isn’t simply cost per click. What matters is what those clicks ultimately produce in leads, sales and revenue.
What are the benefits of ChatGPT Ads for businesses?
The most exciting aspect of ChatGPT advertising is intent.
People frequently use ChatGPT because they are trying to solve something. They might be comparing products, researching a purchase, organising a holiday, evaluating software, planning a renovation or looking for a service provider.
That puts advertisers in front of users at a potentially valuable stage of the decision-making process.
Another advantage is context. A Google search might contain five or six words. A ChatGPT conversation can provide considerably more information about what the person is actually trying to achieve.
ChatGPT Ads can use the context and intent of the current conversation when determining which advertisements are relevant. OpenAI also allows advertisers to create multiple context hints and creative variations around different customer needs.
The platform also provides familiar performance metrics including impressions, clicks, click-through rate, spend and conversions, while conversion tracking can be implemented through OpenAI’s pixel or Conversions API.
There is also a potential early-adopter advantage. Google and Meta advertising are extremely mature and highly competitive. ChatGPT advertising is much newer. Businesses prepared to test the platform early may discover opportunities before competition in their category becomes significantly stronger.
ChatGPT Ads vs Google Ads
The obvious question is whether businesses should move advertising budgets away from Google.
For most businesses, we wouldn’t recommend doing that yet.
Google Ads remains exceptionally powerful when somebody knows what they want and is actively searching for it.
Someone searching:
“emergency electrician Adelaide”
or
“office furniture Adelaide”
is showing extremely clear commercial intent.
Google Search campaigns allow advertisers to target searches closely related to their products and services, with keyword matching designed to identify the meaning and intent behind those searches.
ChatGPT becomes particularly interesting slightly earlier in the journey.
Instead of searching for an exact supplier, someone might ask:
“What office furniture do I need for a new office with 20 employees?”
or:
“What type of standing desk is best for an office fitout?”
This is still valuable commercial intent, but it is expressed as a conversation rather than a conventional search.
That makes ChatGPT Ads potentially very useful for research, comparison and consideration, while Google remains extremely strong for direct search demand.
In many cases, the best strategy will therefore be Google Ads + ChatGPT Ads, rather than choosing one or the other.
ChatGPT Ads vs Facebook and Instagram Ads
Meta advertising plays a different role again.
Facebook and Instagram are exceptionally good at generating demand and reaching audiences who may not currently be searching for a business.
A person scrolling through Instagram might not have been thinking about landscaping their backyard, upgrading their furniture or joining a gym. A strong image or video can introduce the idea and create interest.
Meta’s ecosystem also provides extensive placements across Facebook, Instagram, Reels and other environments, with its advertising systems optimising delivery across these placements.
ChatGPT advertising is less about interrupting someone’s feed and more about becoming relevant during an existing conversation.
A simple way to think about the three platforms is:
| Platform | Particularly strong for | Typical customer mindset |
| Google Ads | Capturing existing demand | “I know what I need. Help me find it.” |
| Facebook & Instagram Ads | Awareness, discovery and visual promotion | “I’m browsing. Show me something interesting.” |
| ChatGPT Ads | Research, comparison and decision-making | “I’m trying to work out what I should choose.” |
None of these platforms completely replaces the others.
They can reach the same customer at different stages of their buying journey.
Should local businesses use ChatGPT Ads?
Potentially, yes — but selectively.
ChatGPT Ads aren’t only designed for major national brands. OpenAI’s campaign tools include geographic targeting, although the level of geographic targeting available can vary by location and campaign type.
This means there can be opportunities for local businesses, particularly when customers tend to research before contacting them.
Good potential candidates include:
- professional services, such as accountants, lawyers and financial services
- builders, renovators, landscapers and higher-value trades
- furniture and home improvement businesses
- automotive businesses
- education and training providers
- healthcare and allied-health businesses where advertising policies permit
- tourism and accommodation businesses
- technology and software providers
- eCommerce businesses
- B2B companies where customers normally research several options before making contact.
For a small local business offering an urgent service, however, Google Search may still deserve priority.
If somebody has a blocked drain, broken air conditioner or car that won’t start, they are likely to search directly for a provider nearby. Capturing that immediate search demand through Google may produce a stronger return than trying to reach them earlier through conversational advertising.
For services involving a longer decision process — renovations, education, professional advice, expensive purchases or considered B2B decisions — ChatGPT becomes considerably more interesting.
What about large businesses and national brands?
For larger organisations, ChatGPT Ads offer a significant opportunity.
These businesses typically have larger audiences, more products, stronger conversion tracking and enough advertising budget to test additional platforms without abandoning existing channels.
They can also create campaigns around multiple customer situations rather than a handful of keywords.
A national furniture company, for example, could develop separate campaigns around home offices, commercial fitouts, ergonomic furniture, educational furniture and workspace planning.
An eCommerce retailer could create campaigns around different product categories and the problems those products solve.
And a software company could advertise around dozens of different business problems its platform addresses.
ChatGPT Ads also support custom audiences, allowing advertisers to include or exclude audiences created from their own eligible customer or prospect data.
Is ChatGPT advertising better than Google or Facebook Ads?
Not necessarily.
The better question is:
Where does ChatGPT fit into your existing digital advertising strategy?
Google Ads has decades of search behaviour, mature conversion optimisation and enormous commercial search volume.
Meta has extraordinary reach, sophisticated advertising technology and highly visual formats.
ChatGPT brings something different: conversational intent.
It can potentially reach someone when they are explaining their situation in detail, investigating possible solutions and deciding what to do next.
That is a very valuable marketing moment.
But ChatGPT Ads are also considerably newer. Ads Manager is still described by OpenAI as a beta platform, and its targeting, reporting, optimisation and advertising ecosystem will continue to evolve.
Businesses should therefore treat ChatGPT Ads as an additional advertising channel to test, measure and optimise — not automatically shift their entire advertising budget into it.
Should your business start advertising on ChatGPT?
If your business already has successful Google or Meta campaigns, ChatGPT Ads are certainly worth investigating.
A sensible approach would be to allocate a controlled test budget, create several different advertising messages and context themes, track leads or sales properly and compare the results against your existing channels.
Look beyond clicks.
Measure cost per enquiry, cost per sale, conversion rate, lead quality and ultimately return on ad spend.
For some businesses, Google will continue to dominate.
For others, Meta may remain their best source of new customers.
But some may discover that conversations happening inside ChatGPT reveal a completely new source of high-intent customers.
And as consumer search behaviour continues to evolve, understanding how to advertise inside AI platforms may become an increasingly important part of digital marketing.
The bottom line
ChatGPT Ads shouldn’t currently be viewed as a replacement for Google Ads or Facebook and Instagram advertising.
They represent a new advertising environment.
Google helps businesses appear when people search.
Meta helps businesses create demand while people browse.
ChatGPT creates an opportunity to appear while people research, compare, question and decide.
For businesses with the right product, customer journey and measurement strategy, that makes ChatGPT Ads a channel well worth testing in 2026.