What to know about new ChatGPT ads

The quick answer

Deciding whether to use high-priced ChatGPT ads requires a clear process. Here is a simple framework to follow:

1. Acknowledge the High Cost: Recognize that ChatGPT ads are a premium investment and confirm you have a dedicated budget for experimental marketing channels.
2. Evaluate Premium Visibility: Determine if having your brand appear directly in AI conversations aligns with your marketing goals, particularly for brand awareness.
3. Assess Your Risk Tolerance: Understand that these ads come with limited performance data. You must be comfortable investing without clear ROI metrics at first.
4. Define a Small Test: If you proceed, start with a small, highly-defined test campaign to gather your own data and limit financial exposure.

Should you invest in ChatGPT ads?

OpenAI is now offering ads within ChatGPT, creating a new and untested channel for digital marketers. This new format promises premium visibility by placing your brand directly into AI-driven conversations.

However, this opportunity comes with significant trade-offs. The original article from searchengine land reports these ads have high prices and provide limited performance data in return. This guide will help you decide if this new channel is right for your business.

Factor 1: The high price of entry

The first consideration for any business looking at ChatGPT ads is the cost. A "high-priced" ad placement means it will likely consume a significant portion of your marketing budget, especially compared to more established platforms.

Before allocating funds, you must treat this as an experimental spend. Do not pull budget from campaigns that are already delivering predictable results. Instead, use funds specifically set aside for testing new channels and strategies.

Consider the opportunity cost. Every dollar spent on an unproven channel is a dollar not spent on a proven one. Investing in channels with trackable ROI, like building out a strong foundation of SEO content, often provides more reliable and compounding value for your business.

Calculating your experimental budget

To decide if you can afford to test OpenAI advertising, answer these questions:

• What is the maximum amount of money you can afford to invest without needing a direct, measurable return in the short term?
• How does this cost compare to the Customer Acquisition Cost (CAC) on your most effective current channels?
• If the campaign generates zero direct leads, can the business still consider the spend a worthwhile learning experience?

Answering these questions honestly will tell you if your budget and business model are ready for this kind of high-risk, high-potential investment.

Factor 2: The value of premium visibility

The main promise of ChatGPT ads is "premium visibility inside AI conversations." This is a new type of advertising placement that differs from traditional search or social ads.

Instead of appearing next to search results, your brand could be featured as a direct part of the AI's answer. This placement has the potential to build significant trust and authority, as it appears to be a recommendation from the AI itself.

Is this visibility right for your goals?

This type of ad is likely most effective for top-of-funnel brand awareness goals. If your primary objective is to get your brand name in front of a new, engaged audience, the novelty of an AI endorsement could be powerful.

However, if your goal is immediate lead generation or sales, the path to conversion is less clear. Users in a conversational AI environment may be in a research phase, not a buying phase. The visibility is premium, but its ability to drive direct action is still unproven.

Your brand must be prepared to capture any interest generated. Traffic from these ads needs to land on a page that continues the conversation and guides the user. A well-designed website built to convert is essential to avoid wasting the attention you’ve paid for.

Factor 3: The risk of limited performance data

The most significant challenge for marketers is the lack of performance data. Established platforms like Google Ads and Meta Ads provide granular detail on impressions, clicks, conversions, and cost per acquisition. This data allows you to measure ROI and optimize campaigns effectively.

With ChatGPT ads, this feedback loop is currently missing or limited. You may get top-level impression data, but connecting an ad view to a final sale will be difficult. This makes it almost impossible to calculate ROI in the traditional sense.

How to operate without complete data

If you choose to advertise on ChatGPT, you must accept this ambiguity. Your focus should shift from direct attribution to measuring correlations. For example, you can look for:

• Increases in branded search: Did more people search for your company name after the campaign started?
• Spikes in direct traffic: Did you see a lift in users typing your website URL directly into their browser?
• Mentions on social media: Did users start talking about seeing your brand on ChatGPT?

These are imperfect metrics, but they can provide directional evidence of a campaign's impact on brand awareness. You must be comfortable with this level of uncertainty.

Your 4 step plan for testing ChatGPT ads

If you have the budget and your goals align with brand awareness, you can run a structured test. Follow these steps to minimize risk and maximize learning from your investment in AI conversation ads.

Step 1: Define one clear campaign goal

Do not try to achieve everything at once. Pick one specific, top-of-funnel goal for your test campaign. Your goal should be simple, such as "Introduce our new software to tech professionals." Avoid goals tied to direct sales or lead numbers, as they will be difficult to track.

Step 2: Isolate your test variable

Promote a single product, service, or offer. Using a unique landing page for this campaign is critical. This allows you to attribute any increase in page traffic directly to your ad efforts, even without official click data from the platform.

Step 3: Set a strict budget and timeframe

Commit to a fixed budget and a specific duration, such as one month. Once the test period is over, stop the campaign and analyze the results. Do not let an experimental campaign run indefinitely without clear performance indicators.

Step 4: Analyze directional metrics

At the end of your test, gather all available data. Look at the metrics from the ad platform itself, but focus more on the correlated metrics you decided on earlier. Analyze Google Analytics for changes in branded search, direct traffic, and traffic to your unique landing page. Present these findings as a learning report, not an ROI calculation.

Based on this analysis, you can make an informed decision about whether to continue, pause, or stop your investment in ChatGPT ads. For most businesses, the smart move is to observe, learn from the early adopters, and focus on proven digital marketing strategies until more data becomes available.