On Monday, OpenAI announced that ChatGPT Ads has reached $1 billion in annualised revenue run rate, suggesting the AI chatbot is quickly gaining traction with advertisers. But as the product rolls out globally, will we see more ad dollars coming into the market, or advertisers reallocating existing search budgets? We asked five industry leaders where ChatGPT budgets are coming from, and how they see OpenAI’s ads product evolving.
Katherine Cartwright, Cofounder and Principal, Criterion Global
Right now, ChatGPT ad budgets are coming from two places: the small “flex” allocations smart clients hold aside for testing new channels, or a thin slice carved off existing paid search budgets. So it’s incremental spend for now, but only because it’s small compared to their full campaign efforts. Once the channel proves itself over time (or not), the money will most likely come at the expense of search budgets.
Today the product is a bit of a shotgun approach; not a lot of aiming. We expect OpenAI (hints) will, over time, incorporate options we’ve come to expect in search campaigns: greater flexibility to prioritise certain queries over others, richer creative options, and deeper ad integration into the answers themselves. The risk is that the clean answers people came for becomes a swamp of “buy now”-style Google Ads (a double-edged sword for advertisers).
Interestingly we see that most large brands are simply copying and pasting their search strategies over to OpenAI, rather than a full shift in strategy. One of our clients (a luxury extended-stay hospitality brand) uses ChatGPT ads surgically, but we see online travel agencies (OTA) like Booking.com bidding on the same “long-term stay” queries and are trying to win the booking away from the hotels themselves. Basically, it’s an extension of the OTAs’ current search playbook.
Our thesis is that precision will win the day.
Brian Kane, COO, Sourcepoint by Didomi
Open AI’s revenue growth is likely to represent a reallocation of existing ad spend, particularly from Google, rather than additional ad dollars entering the market. That matters in the context of the recent Google antitrust ruling. The advertising market has been relatively concentrated for years, but AI is creating new alternatives. As OpenAI’s advertising business scales, the more significant development may be that advertisers, publishers, and consumers have more options, resulting in a reduced reliance on any single platform, such as Google.
And while still short of their purported target of nearly $3 billion, reaching $1 billion in advertising revenue is a significant milestone. With the holiday season ahead, that target may be within reach, but it is too early to call victory.
What is more interesting is OpenAI’s ability to develop the advertising business in parallel to strengthening its position within the enterprise as they have advanced their frontier models significantly in the last few months. It is effectively trying to walk and chew gum at the same time: monetising its consumer audience, while continuing to push and make strides in enterprise adoption.
That matters because the market remains hyper-competitive with new advances from SpaceXAI’s Grok, Meta, and Google who have their eyes on that same balance of enterprise software and advertising. If OpenAI can continue to execute across both advertising and enterprise, its positioning becomes considerably stronger. The emerging ads business is important both as a revenue stream and how broadly OpenAI is building its platform.
Erwin Bossers, SVP Media, DEPT
From the start, even in early closed alpha, we’ve had very positive feedback and momentum from clients wanting to add incremental budget into ChatGPT ads. There’s broad interest in activating, exploring and experiencing the platform’s performance. We see this as an incremental channel and incremental budget: search and other channels are still performing well, so this isn’t cannibalising existing spend.
The interest is exactly what we expected. ChatGPT’s global usage and sheer scale mean brands can connect with their audiences and be part of the customer journey in this new environment. The speed of OpenAI’s platform evolution is remarkable, especially at a global scale, and that’s a big reason clients want in early. We’ve had access since closed alpha and have watched that development firsthand.
There’s real buzz around the platform, and as marketers, that’s exactly where we want to be.
Felicity Gardiner-Adam, EMEA Client Strategy Leader, PMG
Advertising remains relatively new to the ChatGPT experience. While the $1 billion annualised revenue run rate demonstrates strong advertiser demand, it should not be mistaken for proof of campaign effectiveness. OpenAI’s challenge is to balance the usefulness of answers with the relevance and value of its ads. Usage creates the audience; trust will determine its value.
This is why early investment should come from innovation and test-and-learn budgets, rather than diversion of media spend. Advertisers first need to understand how users respond, where ads add value and whether results are genuinely incremental. If robust measurement can demonstrate incremental results, ChatGPT could become a meaningful addition to the performance media mix. Until then, scale and novelty alone won’t win.
Brooke Willcox VP, Product Strategy, Digital Remedy
The first thing to note is that a $1 billion run rate is impressive speed, but in context it’s about 2.5% of OpenAI’s total revenue. So this is a fast start, not a proven channel yet.
In terms of where the budget comes from, right now it’s mostly experimental dollars, innovation budgets and test allocations, not committed line items. The more interesting question is what it becomes. ChatGPT reaches consumers during discovery and consideration, when they’re explaining goals and comparing options, not just typing a keyword. That’s a different moment than search, which is why I’d expect this to pull from both search and social budgets over time rather than sit neatly in one bucket.
For now it’s incremental and additive. The real test is whether OpenAI can prove performance and measurement, because that’s what converts test budgets into standing ones.
