What a ChatGPT ad is, and where it shows up
OpenAI began piloting advertising inside ChatGPT in early 2026. The format is a sponsored card shown to users on the free tiers, placed next to the AI’s answer and visibly labeled so nobody confuses it with the answer. Ads are excluded from sensitive topics. What started as a US-only pilot expanded within months; ChatGPT ads went live in the UK in June 2026, and we at SmartSites have been running them for US clients since February 2026.
The biggest structural difference from Google is scarcity. A Google search result can show three or four ads above the organic listings. A ChatGPT answer shows one advertiser. If you win the placement, you are the only brand in the conversation at that moment. And ChatGPT is where a growing share of consumers start their research: about a billion weekly users as of September 2026, and in automotive roughly one in four new-car buyers uses an AI tool, with ChatGPT holding about a two-thirds share of them.
I cover the formats in the ChatGPT ads chapter of the book, with the caveat that formats, targeting and measurement are changing faster than anything else I have written about.
How ChatGPT ads are bought: topics, not keywords
If you have run paid search, unlearn the keyword. ChatGPT ads are bought against topics and conversational context. You tell the platform what kinds of conversations your business belongs in, and the system decides which prompts qualify. When 142 people were asked to write a prompt with the same shopping intent, barely any two looked alike. You cannot build a keyword list for that, so OpenAI does not ask you to.
Pricing launched as a CPM product. You pay per thousand impressions, not per click, and in our early campaigns the effective cost worked out to hundreds of dollars per click. That is what happens when an impression-priced placement sits inside a product where most people read the answer and never click. OpenAI has since added advertiser tools, including custom audience lists, so you can match your own customer and lead lists the way you would in Google or Meta.
Targeting is the other limit to understand before you spend. As of September 2026, US geographic targeting goes down to a state or a DMA and no further. For a national e-commerce brand that is fine. For a single-rooftop car dealership or a local service business, a whole DMA is far too broad. I walk through the buying mechanics in my Technology for Marketing 2026 talk on advertising inside the answer.
The wider AI ad landscape as of September 2026
ChatGPT is the headline, but it is one surface among several, and each works differently.
- Google AI Overviews. Ads are embedded in roughly a quarter of AI Overview responses, up from about 5 percent in early 2025, and so far US only. These come from the existing Google Ads system: the same campaigns, the same feeds, the same auction. If your search and Performance Max campaigns are well built and your Merchant Center feed is clean, you are already eligible. No new budget line is needed.
- Google AI Mode. Shopping ads launched inside AI Mode in February 2026, driven by product and vehicle inventory feeds. Beyond shopping, AI Mode has no ads yet as of September 2026.
- Microsoft Copilot. Often forgotten, Microsoft was first, launching ads inside Copilot in early 2023, and has formats you will not find elsewhere, including immersive showroom ads. It runs through the same Microsoft Advertising platform you already use, and it is live in the UK.
- ChatGPT. Live in the US and UK, CPM pricing, topic-based buying, state or DMA targeting.
- Amazon and Perplexity. Both are coming; neither is a channel you can meaningfully plan around yet.
The thread running through all of it: AI advertising is not a separate discipline yet. On Google and Microsoft it is the PPC you already run, showing up on new real estate. Only ChatGPT asks you to buy in a new way.
What early advertisers are seeing
The honest version: after seven months of running ChatGPT ads for US clients, cost per lead remains far higher than Google, Microsoft or Meta. As a performance channel, ChatGPT ads do not yet compete. As a branding and awareness channel, they are interesting: you are the only advertiser in front of a person actively researching your category at the moment they form a shortlist.
Early movers also did not get the first-mover advantage people hoped for. Early AdWords rewarded whoever showed up first with cheap clicks; ChatGPT launched at CPM prices that left no room for that, so the reward for being early is learning, not arbitrage.
E-commerce has been the most effective vertical by a wide margin, and the reason is structural. Paid search captures demand that already exists. AI search generates demand: a shopper asking ChatGPT what to buy for a specific situation has not chosen a brand yet, so an ad there introduces something new instead of fighting over a click that was already going to happen. That brings net-new business. Local services and dealerships, where targeting is too broad and the buyer still finishes on Google and your website, have seen the weakest returns so far.
How to measure ChatGPT ads
Start by throwing out the idea of rank. There is no number one on ChatGPT. Run the same prompt 100 times and you get different answers, and the ad slot is a single position with no ladder beneath it. Anyone selling you a ChatGPT ranking is selling snake oil.
Measure in two layers instead. The first is exposure: impressions, share of voice in the conversations you care about, and brand lift where you can afford to test it. The second is the one every other channel is judged on, cost per lead, brought back to an apples-to-apples comparison with your search, social and display spend. If the branding story is real, it should eventually show up in branded search volume and direct leads.
Watch your analytics plumbing, because it will lie to you. Across nearly 1,500 client GA4 properties, direct sessions jumped about 66 percent year over year, and the jump was almost identical whether or not we manage the client’s SEO. That is a measurement artifact: clicks from AI Overviews and ChatGPT often arrive with the referrer stripped, and GA4 files them as Direct. GA4’s AI Assistant channel, added in May 2026, catches a sliver of the real volume and misses Google’s own AI surfaces entirely. Use UTM-tagged landing pages for every AI ad, build a custom channel group, and treat Search Console and your lead counts as ground truth. The full method is in the measuring AI search chapter and in how to measure AI search visibility.
How much to budget, and a 12-month plan
The one prediction I will guarantee is that ad costs rise every year. That is why I tell growth-focused companies to set aside about 10 percent of marketing spend for no-strings experiments, and in 2026 AI advertising is exactly what that 10 percent is for. Treat it as R&D: small budgets, fast learning, and a willingness to look foolish for a quarter in exchange for being early to something big. That is how smart dealers treated AdWords in 2003.
Here is the 12-month plan I gave the room in London in September 2026:
- Invest in GEO first. The organic side of AI search is where the volume is and it costs you content hours, not media dollars. Start with what generative engine optimization is and the GEO playbook.
- Get your Google and Microsoft accounts healthy. Value-based bidding, clean Merchant Center and inventory feeds, full asset coverage. That is what makes you eligible for ads in AI Overviews and AI Mode shopping with no new spend.
- Build three separate paid plans: Google, Microsoft and ChatGPT. They are bought differently, measured differently and priced differently, so one AI line item hides more than it shows.
- Put the 10 percent into ChatGPT if your vertical fits. E-commerce and national brands first. Local businesses and dealerships should wait for targeting tighter than a DMA, and spend the test budget on Copilot and feed quality in the meantime.
- Report cost per lead every month next to every other channel, and keep the exposure metrics as context, not as the verdict.
And remember that about 95 percent of AI-platform-driven purchases still finish on a brand or retailer website. The AI starts the journey; your site closes it, so advertising inside the answer only pays if the page behind the click can do its job. If you want help building this plan, get in touch, or book me to speak on it.
Questions people ask
Can you advertise on ChatGPT?
Yes. OpenAI began piloting ads in ChatGPT in early 2026, first in the US and then in the UK from June 2026. Ads appear to free-tier users as a clearly labeled sponsored card beside the answer, with only one advertiser per result, and are excluded from sensitive topics. Pricing launched on a CPM basis and targeting is by topic and conversational context, with US geo-targeting limited to state or DMA as of September 2026.
How much do ChatGPT ads cost?
ChatGPT ads launched as a CPM product, so you pay per thousand impressions rather than per click. Because most people read an AI answer without clicking, the effective cost in early campaigns worked out to hundreds of dollars per click, and cost per lead has stayed far above Google, Microsoft or Meta. A sensible budget is the roughly 10 percent of marketing spend you reserve for experiments, treated as R&D rather than performance media.
Do ChatGPT ads use keywords?
No. ChatGPT ads are bought on topics and conversational context, not keywords or search terms. People phrase the same shopping intent in wildly different ways, so a keyword list cannot capture it. You define the kinds of conversations your business belongs in and the system matches prompts to them. OpenAI has also added custom audience lists so advertisers can match their own customer and lead data inside ChatGPT.
Are ChatGPT ads worth it for a small business?
Not yet for most local businesses. As of September 2026, US targeting only goes down to a state or a DMA, which is far too broad for a single-location business or a car dealership, and cost per lead is still high. E-commerce and national brands are seeing the best results because AI search generates new demand rather than capturing existing demand. Local advertisers should prioritize GEO, healthy Google and Microsoft accounts, and Copilot ads first.
Are there ads in Google AI Overviews?
Yes. Google shows ads alongside roughly a quarter of AI Overview responses, up from about 5 percent in early 2025, and launched shopping ads inside AI Mode in February 2026. These ads come from the existing Google Ads system, so a well-built Search or Performance Max campaign with a clean Merchant Center feed is already eligible. No separate AI budget is required, which is why account fundamentals matter more than ever.
How do you measure ChatGPT ads?
Measure exposure first, meaning impressions and share of voice in the conversations you care about, then bring everything back to cost per lead so it can sit next to every other channel. There is no ranking on ChatGPT, so ignore any vendor promising one. Tag every landing page with UTMs and build a custom GA4 channel group, because AI clicks often arrive with no referrer and get filed as direct traffic.