ChatGPT Wants a Cut of Your Holiday Budget. Marketers Are Saying Not Yet.

OpenAI turned on ad capabilities inside ChatGPT earlier this year, dropping sponsored product listings directly into conversational answers instead of banner space or a scrollable feed. More than 1,400 advertisers ran ads on the platform in August alone, an 8% jump month over month, with Capital One, Expedia, and Cloudflare spending the most of anyone. The pitch is simple: catch shoppers the moment they ask an AI assistant what to buy, before they've even opened Google or Meta.

The catch is the receipt. Ad measurement firm Measured pegs ChatGPT's cost-per-click at roughly six times what brands pay on Google, and the early read from marketers testing the channel is that results have been underwhelming, not game-changing. The fourth quarter is also the worst possible time to find that out the hard way, with most holiday budgets already locked into channels proven to convert.

There's a deeper problem than price, too. Nobody is sure shoppers trust an AI chatbot's product pick the way they trust a search result or a friend's tag, and the ads that do land there risk feeling like someone slipped a flyer into an actual conversation. Brands need to spend money learning whether the channel works before they will spend money assuming it does, which is exactly the kind of math that keeps a new platform stuck in the experiment folder through an entire holiday season.

Source: Modern Retail

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →