Credit: OpenAI
OpenAI's decision to start advertising on ChatGPT in the U.S. is a necessary expansion to revenue models but the local market must remain cautious, industry experts told AdNews.
Shahram Ghaffurian, CEO at Magic said he is not surprised by the move and that diversifying revenue streams was needed to stay ahead of the increased investment.
"At some point OpenAI's slated enormous infrastructure investment of $US1.4 trillion needs to be paid for, and subscriptions alone were never going to get them there," Ghaffurian told AdNews.
"Even with reported 2025 revenues around the $US20 billion mark, that barely registers against the scale of ongoing compute and model costs, let alone future expansion,” he said.
He said that the platform will still struggle to compete with companies like Google, which still continues to dominate the click market, and calls the solution "more a strategic necessity than a silver bullet for profitability."
"Advertising will help diversify revenue, but it is unlikely to be material in the near term," he said.
"Google generates roughly $US265 billion a year from ads across its entire network, and OpenAI's share of search clicks is still only around 1 percent. In that context, ads in ChatGPT are more a strategic necessity than a silver bullet for profitability."
Alfie Lagos, director at Lexlab, said he sees an inevitable trend of publishers monetising their platforms to offset free subscriptions.
Roughly 95% of ChatGPT's global, 800 million weekly users remain on the free tier, according to internal OpenAI financial documents analysed by technology and business publisher, The Information.
While he said advertising was a matter of when, it will take time to build momentum and success in the market, comparing it to Netflix's ad launch across its Netflix Basic tier, back in 2022.
"The Netflix comparison is apt: remember the $90 CPMs and missed delivery guarantees in 2022?” he said.
“It took three years for that ad tier to reach 40% of subscribers ChatGPT could follow a similar arc of initial excitement, advertiser frustration, and eventual maturation."
"From an advertiser perspective, the dynamic will look familiar. Early adopters who can move quickly and tolerate ambiguity are likely to see outsized ROI, at least initially," said Ghaffurian.
"Where this really gets interesting is category fit. ChatGPT is predominantly used for information gathering, problem solving and consideration-stage research, so higher involvement purchases and more complex categories should benefit most," he said.
He said the brands that benefit most will be in the finance, technology, education, automotive or B2B services categories, rather than impulse-driven fast-moving consumer goods (FMCG).
“I expect a flood of advertisers to jump in quickly, driven by the AI buzz and the desire to be first,” said Alberto Sanchez, head of media at Orange Line.
“The first budgets to shift will likely come from programmatic, because the contextual environment ChatGPT offers is enormous and more relevant than many current placements. This could be the beginning of a major market shift in performance marketing.”
Dylan Sargant, associate media director at Yango, said the Australian market will benefit from seeing how advertising on the platform will perform in the U.S. market.
"Despite the wait, we are in some ways better off than our counterparts overseas," he said.
"With the US becoming a testing ground, we can monitor the market to see how it performs, utilising learnings on what does and doesn’t work to be ready for when it does launch. This could prove to be incredibly valuable given how much is still unknown.
"The answers to these questions will likely be the driving force behind how valuable the ads are going to be inside the platform in its first stages.
"If we can get a clearer picture on things like effectiveness, measurement and relevance from the US test, we will undoubtedly be in a better position to drive additional value for our clients."
He also recognised the increased pressure to launch in Australia, due to the importance of privacy and data usage.
The advertising and media industry is preparing for the second tranche of the Privacy Reform Act, anticipated for later this year.
"The rollout will likely have a need for increased transparency to build trust, since Australia is a market that is highly sensitive to privacy and data usage when compared to the US," he said.
"If this can all be achieved, it could become a valuable component across advertisers search strategies.
"Even without ads, we are already gathering learnings through organic search, allowing us to monitor how the platform is recommending our clients to users.
"Building authority now will drive increased future performance, as the organic groundwork from our blended search strategies will improve paid performance when the product rolls out."
Managing director at Vonnimedia, Veronica Cremen, said "first-movers" of the potential roll-out in the Australian market, will "win big."
"It's coming. The team is built, and Australia is the ultimate playing field for OpenAI to dominate. At Vonnimedia, we say: bring it on."
Local marketers also remain skeptical of the prevailing hype of OpenAI's ad launch in Australia due to the reality of who really "owns" the search market.
Google still accounts for roughly 94% of search share in Australia, according to the Australian Competition and Consumer Commission (ACCC).
In the U.S. Google's total search share is slightly lower and sits at 85%, according to Statcounter data for January 2026.
"Australian marketers should temper the hype with hard numbers. ChatGPT holds roughly 2% of search share here," said Lagos.
"That's not nothing, but it's not Google either.
"The claim that AI referrals convert 23 times better than traditional search comes from a single SaaS company analysing their own website traffic.
"Adobe's data tells a messier story: AI traffic actually converted 23% worse than Google initially before improving. The opportunity is real but the measurement infrastructure doesn't exist yet, and anyone who's tried to report on Spotify ad performance knows how frustrating that gap can be."
Lagos said he is "excited" by the "intent signal." While it has the potential to transform media planning, it is still in the early stages of trial and error.
"Over 90% of ChatGPT queries are informational, but the commercial queries that do happen sit at genuine decision points.
"If this ad tier achieves meaningful reach, say 40% or more of users, we could see the emergence of AEO (AI engine optimisation), as a legitimate discipline alongside search engine optimisation (SEO) and search engine marketing (SEM) which feels potentially transformative.
"But right now? This is a test and learn channel, not a media plan cornerstone.
"The $US26 billion opportunity eMarketer projects is a 2029 reality, not a 2026 one. Get in early, experiment, but don't bet the budget on it."
Sam Makwana, head of Owned Media, calls the shift towards "intent-led, conversational advertising" a "new opportunity" for advertisers who can be part of the users decision making earlier in the buying process. However, he is cautious of the industry getting ahead of itself. The roll-out needs time to prove itself and earn trust from brands and users.
"Those already investing in strong brand presence and helpful content will be best positioned to benefit from ChatGPT Ads," Makwana said.
Sanchez said the move was about more than monetisation, but the growing importance of trust in this space.
“The real story is that ChatGPT is building a trusted space for advice and personal conversations, and that is where the power lies.
“If OpenAI protects users and keeps the experience clean, they could start taking share from the biggest platforms.
“People use ChatGPT for private, real decision making. Ads in that environment will need to be handled carefully, because users will have long, deep conversations and may be discussing sensitive topics.
“If OpenAI gets this right, it will create a new form of intent capture that is more valuable than typical search.”
Nick Grinberg, head of strategy at Next&Co sees the potential for advertisers if OpenAI's principles are implemented right, as ChatGPT increasingly becomes a trusted shopping partner for users.
"ChatGPT is a high-trust, high-intent environment where people are actively trying to do something, such as pick a tool, plan a trip, or choose a product," Grinberg told AdNews.
"If the ads can match that intent without feeling intrusive, they could have more potential to perform than ads in traditional search."
Cremen advises brands of what it will take to succeed and said "paid ads in ChatGPT don't work like traditional search".
As the traditional search landscape has changed so has the user's buying journey.
It has shifted from keywords to contextual intent - not just what people want to buy, but why. And these tools have become "solution engines."
"If you try to recycle your 2024 search playbook, you will fail," she said.
These ads aren't triggered by a generic keyword; they are triggered by contextual intent. In layman's terms, they are the preferred answer to a buyer's specific problem.
"Because there is already so much organic proof and high adoption of ChatGPT as a "solution engine" in Australia, the shift to paid ads will be seamless.
"However, think about the shift in the flywheel: with traditional search, you might bid on "best running shoes." On OpenAI, a user asks: "I'm training for my first 10k in Sydney, I have flat feet, and I'm prone to blisters. What should I wear?"
"The ad should not be an interruption but appear as the preferred solution, which also links it to being of high trust. Win, win.
"To win in this new era, you have to move beyond just "buying keywords". You need to be the brand that is contextually relevant to your customer's exact pain points and desires.
"In 2026, we aren't just building awareness on social and offline, but we will also need to build the preference that AI then validates. The future of search is conversational and the future of your growth is golden for those who move quickly."
Measuring the effectiveness of these ads is another question. Are the ads really pushing consumers over that final line to buy a product of service, or is it just another "novelty" tool to add to their campaign buying for the sake of innovation?
"If and when this rolls out in Australia, the real question will not be whether brands should test it, but whether they have the measurement discipline to separate genuine incrementality from novelty-driven/AI adoption checkbox-based implementation," said Ghaffurian.
"One potential downside is the risk of businesses investing budget without achieving meaningful return on investment, particularly in the early stages," said Makwana.
"As this is a new advertising format, it will take time to understand how to target effectively, measure performance, and align ads with genuine user intent.
"There is also a risk of ads appearing in conversations where they feel irrelevant or intrusive, which could weaken trust if not handled carefully.
"Without clear transparency, controls, and measurement frameworks, some advertisers may struggle to justify spend compared to more established channels."
OpenAI said the launch will be governed by principles to protect users.
This includes mission alignment to make the tool accessible to everyone.
OpenAI promises answer independence, meaning ads do not influence the answers ChatGPT gives.
There is also the principle of conversation privacy and data will not be sold to advertisers.
Users will be given choice and control over how data is used and can turn off personalisation to clear the data used for ads at any time.
The final principle focused on long-term value, which OpenAI said is to "prioritise user trust and user experience over revenue," according to a OpenAI blogpost.
Ads are to be clearly labelled and separated, not shown to user's "predicted" to be under 18 and or alongside sensitive topics like health, mental health or politics.
"If that boundary ever gets fuzzy, things could get messy - fast," said Grinberg.
"It's worth remembering how Google search ads started out as very distinct from organic results with different colours and obvious labels, but over time Google's design choices have made ads and organic listings look increasingly similar.
"That's a useful precedent; even though intent is a clean separation today, the ad experience in ChatGPT could evolve in that direction too.
"Ad targeting versus privacy will be a key balance. Stronger privacy protections and more user control will help maintain trust, but it likely means lighter targeting and less granular measurement.
"It'll be genuinely interesting to see how that balance evolves over time as the product, and importantly, advertiser expectations, mature."
OpenAI will begin testing across ChatGPT free and Go Tiers in the U.S.
Social media software company Meta, who owns Facebook, Instagram and Threads, has also announced that it will expand its advertising across Threads to global markets, starting from next week. Australian advertisers have had access to the initial ads roll-out since April 2025.
OpenAI global is not commenting.
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