Jasmine Allen.
Reports out of the US suggest ChatGPT ads are commanding a hefty premium, despite a lack of backend features. Still, depending on your business and the category it operates in, it could be worth investing. Jasmine Allen explains.
Following six weeks of testing in the US, OpenAI has announced the rollout of ChatGPT ads in Australia, New Zealand and Canada. With usage of the platform more than doubling in the past 12 months, there’s certainly an audience there, but how much are you willing to pay to reach them?
Reports from America suggest CPMs are sitting around the $60 USD mark, and early beta advertisers are being asked to invest a minimum commitment of $200,000 USD to participate.
While ChatGPT is yet to reveal the price to advertise in the Australian market, it’s likely to be somewhat less expensive, given this is a different environment. CPMs on Meta, for example, are generally 40-50 per cent higher in the US than in Australia.
That said, I’d still expect ChatGPT CPMs to be quite high. But depending on the category you operate in, that could be justified. That’s because ChatGPT is a high-intent, high-consideration environment with early independent studies suggesting ChatGPT traffic converts approximately 31 per cent higher than organic traffic.
More and more people are turning to Large Language Models (LLMs) such as ChatGPT for information, clarity and comparative understanding of services and products. It’s being used to plan weddings, home renovations or holidays. Which makes these audiences high-value targets for brands.
The other factor to consider is the current state of the economy. Consumers are experiencing increased pressure around the cost of living, and, as such, purchase and consideration cycles are becoming longer.
When you pair the CPM conversation with an understanding of what's happening from a consumer point of view, it makes sense to look at investing in ChatGPT ads as part of your strategy.
If your brand is in a vertical where there's high price competition or where the purchase and consideration cycle is longer, showing up in your target audience’s ChatGPT chats is going to have an impact.
Brands that have multiple wholesalers or retailers and a need to justify themselves with authority are likely to be the first movers. There's a strong use case for businesses with a lot of competition or businesses that stock goods that aren't exclusive to them.
But what about attribution?
If you’re following the rollout of ChatGPT ads, you would have seen news regarding a lack of clear attribution to conversions. There's likely a bit of work required to get the platform to where it needs to be in terms of back-end reporting and ad-building functionality. But that wouldn’t make me rule it out entirely.
Whether you or a partner agency is running your ads, you need to ensure you have the capability to understand impact across channels. If you're overly reliant on platform-based metrics, you’re likely to run into challenges. Whether it’s Google, Meta or ChatGPT, depending on the platforms for a source of truth and attribution won’t give you the full picture.
Even if you’re not planning to invest in ChatGPT ads, it pays to invest in third-party attribution tools to validate the success of platforms in your marketing mix. These tools can also help you to digest and understand the influence of multiple channels, whether that be through multi-touch attribution, incrementality testing or potentially media mix modelling to hypothesise and validate their impact.
It’s also worth noting that channels operating in the consideration phase can materially influence purchase decisions without driving a direct click. Reddit and Pinterest are strong examples where exposure and engagement shape intent upstream, despite limited last-click attribution.
What should you do now?
The first step is to start by assessing the opportunity for your business. Whether ChatGPT ads are applicable to your space or business will depend on how it is set up and your propensity to invest.
It’s worth ensuring your business is set up for organic visibility within LLM-driven environments before investing in paid placements. While still evolving, this starts with the fundamentals – ensuring your site is accessible, well-structured, and credible enough to be retrieved, referenced and surfaced in AI-generated responses
You’re also going to hear the term “feed architecture” a lot.
Feeds have long powered visibility in Google Shopping and marketplaces, and that same structured data is becoming increasingly important in LLM-driven discovery.
While not mandatory, clean, well-structured product data makes it significantly easier for models to retrieve and recommend your products. Without it, your brand becomes far less visible in environments like ChatGPT.
This is just the beginning
Feed optimisation and ChatGPT ads are just the surface.
The bigger shift is towards AI-led decisioning, where discovery, comparison and recommendation are collapsed into a single interaction.
Most are still treating this as a media channel. It’s not. It’s an interface shift.
Brands like Sephora, Gap and Pottery Barn are already testing. The real advantage isn’t just being present; it’s learning before the model matures.
Jasmine Allen is the Head of Digital at integrated marketing agency Impressive.