ChatGPT advertising delivers more than 6 times less value for money than Google Ads

by Nicole Clos, Frankfurt School of Finance & Management

edited by Swati Mestri, reviewed by Andrew Zinin

This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility:

Add to Preferred Sources Credit: Unsplash/CC0 Public Domain Advertising on ChatGPT has so far proven significantly less cost-effective for businesses than advertising on Google. This is the finding of a new study by Christian Schulze, associate professor of marketing at Frankfurt School of Finance & Management, and Maximilian Kaiser, assistant professor at Vienna University of Economics and Business (WU Vienna).

The researchers examined the effectiveness of paid ChatGPT ads and their impact on user behavior. The findings raise questions about OpenAI's business model and its potential initial public offering (IPO).

While a visit generated through a Google search ad produced an average of $2.45 in revenue, a visit from a ChatGPT ad generated just 89 cents—approximately 64% less. Conversion rates were also considerably lower, at 0.37% for ChatGPT ads compared with 1.17% for Google search ads. Among the 102 advertisers with complete revenue data, 82% did not record a single purchase from their ChatGPT ads. Overall, at publicly reported ChatGPT ad prices, Google search advertising delivered 6.6 times better value for money in terms of revenue generated per advertising dollar.

"ChatGPT is still a long way from becoming an economically viable alternative to Google as an advertising platform. What matters to businesses is whether advertising leads to purchases and delivers a return on investment. This is precisely where we see substantial weaknesses. Remarkably, even ChatGPT's unpaid recommendations perform substantially better than its paid ads," explains Schulze.

The study also suggests that, following the introduction of advertising, ChatGPT referred approximately 6% to 8% fewer visitors to online stores through unpaid recommendations. However, the conversion rates of visitors who continued to arrive through these recommendations remained unchanged.

This presents OpenAI with a dilemma: To increase advertising revenue, the company could integrate ads more closely into ChatGPT's responses. However, doing so could undermine users' trust in the independence of its recommendations.

"OpenAI faces a fundamental trade-off: Advertising must be commercially attractive without compromising the value of ChatGPT for its users. Integrating ads more closely into responses could improve their effectiveness, but it could also undermine user trust," says Schulze.

The findings are also relevant in the context of a potential OpenAI IPO. According to company figures cited in the study, providing free access to ChatGPT costs approximately $5 per user annually, while projected advertising revenue currently amounts to only around $1 per user. To cover these costs and achieve its ambitious revenue targets, OpenAI would need to significantly increase the economic value of its advertising. The key challenge will be to achieve this without compromising ChatGPT's appeal to users.

Maximilian Kaiser et al., Can Advertising Fund Free AI? Evidence from ChatGPT's International Advertising Rollout (2026). https://ecommerceresearch.org/chatgpt-ads Key concepts Google Gemini ecosystem Generative AI platforms Provided by Frankfurt School of Finance & Management Who's behind this story? Swati Mestri Swati Mestri holds a bachelor's degree in Electronics Engineering and has worked as a content editor since 2019. She has experience editing research documents across technology, health care, and materials science, and has a particular interest in technology and space. Full profile →

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