ChatGPT Ads Hit $1 Billion but Half of Advertisers Lose Money

ChatGPT Ads generated $0.89 in revenue per US session across 102 advertiser sites — barely a third of the $2.45 that Google search ads produced on the same sites, according to a working paper by e-commerce researchers Maximilian Kaiser and Christian Schulze. That gap is the central problem for OpenAI, which has pulled more than 100,000 advertisers into testing its ad platform but now has to move the channel out of the "experimental" bucket and into permanent media plans.

The platform launched roughly nine months ago and has already scaled to a $1 billion annualized revenue run rate as of this summer, adding new formats, partnerships and tools at a fast clip. The performance verdict so far, based on conversations with CMOs and data analysts, is mixed.

"We've dabbled in it," Twilio CMO Chris Koehler said. Intuit CMO Thomas Ranse described his company as "experimenting." Neither sounds like a committed buyer yet.

How bad is the performance gap?

The Adthena search intelligence platform shared ChatGPT ad results from 30 enterprise brands covering July through September. The numbers break down like this:

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

The researchers push back on the argument that weak numbers are just growing pains. "What makes us cautious about 'it will come with time' is the size of the gap," Kaiser and Schulze said by email.

There's one notable counterpoint. OpenAI published an October case study from the note-taking app Evernote showing ChatGPT Ads delivered a trial-to-paid conversion rate 10% to 20% above the company's historical average across paid-acquisition channels earlier in the year. In short: some advertisers win, but the median experience still trails Google.

Why can't brands reach their audience?

Growth is capped by three structural limits: the size of ChatGPT's free user base, the scarcity of ad-relevant conversations, and how many ads users will tolerate before walking away.

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 ChatGPT Ads 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 the researchers propose — moving ads from side cards into the answers themselves — seems unlikely. OpenAI's ad principles state that ads won't influence ChatGPT's answers and that it prioritizes user experience over revenue.

What's changing in measurement?

Adthena CMO Ashley Fletcher calls measurement a "sore point" for marketers on ChatGPT. OpenAI has responded with a new measurement pixel and conversion bidding, letting advertisers set a target cost per acquisition or cost per click. Fletcher said that removes some guesswork, but he worries cleaner data will reveal that ChatGPT ads mostly "nudge people" at the first stage of brand consideration — far from the quick conversions advertisers expect elsewhere. He flagged Black Friday as the moment to watch.

Who's actually making it work?

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 repeatable category that scales as performance rises. Jonathan Vardi, its head of strategy, said building a list of pain points each product solves, then turning those into specific ads, exploits the channel's uniqueness.

He stressed that feeding conversion data back to the platform is 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 with what you have to offer 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, said his company tags every ChatGPT ad it runs and folds that signal 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."

With measurement tools now in place and conversion bidding live, the next quarter — Black Friday included — will show whether the $1 billion run rate can sustain itself on proven returns rather than curiosity budgets.