ChatGPT's Advertising Opportunity

When people hear about ChatGPT’s potential as an advertising platform, many jump to the conclusion that it could rival Google and disrupt its search advertising model. However, ChatGPT isn’t necessarily a replacement for search engines but rather a complementary venue with unique opportunities for advertisers. Its potential lies not in replicating Google’s model but in creating an entirely new advertising paradigm that combines the best aspects of search and social media.

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Search Engines vs. Chatbots: Different Goals, Different Models

A search engine like Google is an intermediary—it’s designed to guide users from a query to a destination, like a website or online store, as quickly and efficiently as possible. Advertising in this context focuses on high-intent keywords. For example, a query like “best hotels in New York” would prompt ads for accommodations, as the intent to book is clear.

Chatbots like ChatGPT operate differently. They’re engagement tools, designed to keep users within the platform, helping them explore ideas, solve problems, or make decisions. Eric Seufert calls this an “engagement sink,” where users seek comprehensive insights rather than just links. This shift in purpose opens up new advertising opportunities. Instead of targeting only the specific content of a user’s query, ads can be dynamically served based on broader behavioral and contextual signals.

For example, imagine a user planning a vacation through ChatGPT. Even if the chatbot conversation is focused on planning activities in Paris, it might make sense to display an ad for a credit card with travel rewards. Unlike Google Search, where the ad must align tightly with the query, ChatGPT could introduce ads that fit the broader intent of the user’s journey, such as travel planning or financial preparation. This flexibility mimics the dynamic targeting seen in social media advertising.

A Hybrid Model: The Best of Search and Social

In an article titled “OpenAI’s Advertising Opportunity,” Eric Seufert argues that the most effective advertising model for ChatGPT could combine elements of search advertising with the dynamic, behavior-based targeting used by social media platforms. ChatGPT’s format, which already handles multimedia inputs and outputs, isn’t limited to text-based ads. Ads could take the form of images, videos, or even interactive content, depending on the user’s engagement.

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Therefore, ChatGPT's hybrid advertising approach could include:

• Search-Style Promoted Links: For high-intent queries where users are seeking recommendations or specific actions (e.g., “Hotels in New York”), ChatGPT could present sponsored options within its answers, akin to Google’s search ads.
• Behavioral Ads: For broader, less commercial queries, ads could be served based on user behavior and context. For instance, someone frequently asking travel-related questions might see ads for luggage, travel insurance, or credit cards, even if the immediate query isn’t directly related.

This flexibility makes ChatGPT’s ad potential distinct and incremental, rather than competitive with existing platforms. Instead of cannibalizing Google or Meta, ChatGPT could offer new opportunities to reach users at different points in their journey, particularly during the Messy Middle, where consumers explore, evaluate, and narrow down choices before making a decision.

The Infrastructure Challenge

While the potential is enormous, building such an ecosystem is no small feat. Platforms like Meta and Google have spent decades developing the infrastructure necessary to collect, process, and utilize vast amounts of data for ad targeting. They benefit from massive user bases—Meta has three billion daily active users, Google two billion—and deep integration with advertisers’ data systems.

OpenAI, by contrast, is starting from a much smaller base. ChatGPT has 250 million weekly active users, a fraction of its competitors’ audiences. While this is a significant number, it’s still far from the scale needed to rival the entrenched advertising ecosystems of Meta or Google. Seufert notes that building the necessary infrastructure—Conversion APIs, data clean rooms, and real-time behavioral targeting systems—requires substantial investment and time. OpenAI has the resources and user growth to make this possible, but it won’t happen overnight.

A New Opportunity, Not a Zero-Sum Game

Despite these challenges, Seufert’s perspective offers an optimistic vision for advertisers. ChatGPT’s model doesn’t have to replace existing platforms to create value. Instead, it could add a new layer to the advertising landscape, helping brands engage users in novel ways. For advertisers navigating the Messy Middle, ChatGPT could become an essential tool for guiding consumers through complex decision-making processes.

Consider a user researching car purchases. While Google might serve ads for specific dealerships or models based on high-intent searches, ChatGPT could provide broader guidance—helping the user compare hybrid and electric vehicles, calculate long-term costs, or decide on financing options. Ads for auto loans or extended warranties could naturally fit into this conversational flow, complementing the user’s journey rather than interrupting it.

As Seufert writes, “Chatbots can marry the best aspects of social media display and link-based search advertising models to create advertising opportunities with each query.” This hybrid approach would allow advertisers to meet users where they are, offering relevant solutions that align with their needs and behaviors.

Looking Ahead

ChatGPT’s potential as an advertising platform isn’t about replacing Google or Meta—it’s about creating a complementary ecosystem that leverages its unique strengths. By combining search-like intent targeting with social media-style behavioral ads, it offers a new way to engage users, especially during the exploratory phases of their decision-making journey. While the infrastructure challenges are significant, OpenAI’s rapid growth and innovative approach suggest that this vision isn’t far-fetched.

For advertisers, this means looking beyond zero-sum thinking. It’s not about Google or ChatGPT, it’s about how both of these platforms are useful throughout a buyer’s journey. The rise of generative AI in advertising is less about competing for existing dollars and more about expanding the pie, creating new opportunities to connect with audiences in meaningful, context-driven ways. In a world where consumer journeys are increasingly nonlinear and complex, platforms like ChatGPT could play a pivotal role in helping brands guide users through the Messy Middle and toward confident decisions.

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As a final thought: Eric Seufert is one the brightest minds in the digital advertising space, but few PPC advertisers I know follow his work. I recommend giving him a follow. He spent much of his career running acquisition and monetization for mobile app companies, including Rovio, the Angry Birds parent company. He now runs a blog called Mobile Dev Memo and is a frequent guest on Ben Thompson's Stratechery podcast. Both of these sources are premium outlets that provide much deeper analysis and insight than you'll find elsewhere in the PPC space.