ChatGPT Ads hit $1 billion run rate, but half of brands lose money

More than 100,000 advertisers have tested ChatGPT Ads, and the platform already runs at a $1 billion annualized revenue rate. Now OpenAI has to prove the channel deserves a permanent line in media plans — and the early numbers are mixed.

The platform launched roughly nine months ago. It scaled fast, adding new formats, partnerships and tools at a rapid clip. But scale is not the same as performance, and CMOs are still waiting for evidence on hard business metrics.

Twilio CMO Chris Koehler said: "We've dabbled in it." Intuit CMO Thomas Ranse described the company as "experimenting." Neither sounds like a committed budget line yet.

What does the performance data actually show?

A working paper by e-commerce researchers Maximilian Kaiser and Christian Schulze, still under review, measured 102 advertiser sites. ChatGPT Ads generated $0.89 in revenue per US session. Google search ads generated $2.45 on the same basis — nearly three times as much.

The researchers aren't convinced patience will fix it. "What makes us cautious about 'it will come with time' is the size of the gap," Kaiser and Schulze said.

Search intelligence firm Adthena reviewed results from 30 enterprise brands covering July through September. The breakdown:

• 52% struggled to recoup their ChatGPT ad spend
• 26% matched or beat Google ads
• The remainder reported mixed results

There is a counterpoint. OpenAI published a case study in October from note-taking app Evernote. It found ChatGPT Ads delivered a trial-to-paid conversion rate 10% to 20% above the company's historical average across paid-acquisition channels earlier that year.

Why can't brands reach their audience?

Growth is limited by three constraints: the size of ChatGPT's free user base, the scarcity of ad-relevant conversations, and the ceiling on how many ads users will tolerate before they leave.

OpenAI's head of global ad solutions, Dave Dugan, told CMO Insider in June that ad delivery and volume had improved as the company's confidence in the user experience grew.

Brands still struggle to show up at scale. "It's really hard for these LLMs to find audience," Qualcomm CMO Don McGuire said. "Unless it's super, super broad, targeting is not really happening right now, so that really begs the ROI question."

One fix, suggested by Kaiser and Schulze, would move ads from cards alongside conversations into the answers themselves. That seems unlikely. OpenAI's ad principles state that ads won't influence ChatGPT's answers, and the company says it prioritizes user experience over revenue.

Is measurement getting better?

Adthena CMO Ashley Fletcher calls measurement a "sore point" for marketers on the platform. OpenAI has introduced a new measurement pixel and conversion bidding, letting advertisers set target costs per acquisition or per click. That removes some guesswork.

But Fletcher worries what cleaner numbers will reveal. They may show that ChatGPT ads mostly "nudge people" at the consideration stage — a long way from the quick conversions advertisers expect from other platforms. He flags Black Friday as the moment to watch.

Where are the early wins?

Natural Intelligence, which runs comparison sites including Top10.com and BestMoney.com plus a performance marketing business, has moved ChatGPT Ads from its test budget to its "growth budget" — a more repeatable category that scales as performance rises.

Jonathan Vardi, head of strategy, said his team lists the pain points each product solves and turns them into specific ads, so they surface when users ask tricky questions. Reporting conversion data back to the platform has been crucial.

"If you don't tell ChatGPT what users are doing on your site after they click your ad, you're not allowing the ads algorithm to learn which users actually engage and become paying customers," Vardi said. "Stopping at views or clicks really constrains your ROI now that there's more competition on the channel."

Hans Fischmann, VP of product at AdRoll, takes a full-funnel view. His company tags every ChatGPT ad it runs and feeds that data into the broader media buy. "Someone asks ChatGPT about a hotel on Tuesday, and sees that brand on their TV Thursday," Fischmann said. "That's the full-funnel play, and it's what earns ChatGPT a permanent spot on the plan."

For now, the experimental bucket is where most budgets sit. The numbers will decide when that changes.