The introduction of advertising within ChatGPT could open new opportunities for businesses looking to reach high-intent customers. However, experts caution that marketers should avoid treating AI advertising as a direct replacement for traditional search marketing.
OpenAI has introduced conversion-optimised advertising in ChatGPT, enabling advertisers to optimise campaigns for outcomes such as purchases, sign-ups and lead generation instead of simply paying for clicks. The platform also allows advertisers to use flexible campaign budgets that can increase spending when its AI predicts stronger conversion opportunities.
The update has sparked discussions about ChatGPT’s growing role in digital advertising and its potential to compete with established platforms such as Google Ads. However, Thomas Phillips, Founder of DTC SEO, believes businesses need to understand how users interact with AI search before reallocating their marketing budgets.
AI Users Are Further Along the Buying Journey
According to Phillips, businesses may initially see higher conversion rates from ChatGPT campaigns because users often arrive with stronger purchase intent.
Someone asking ChatGPT for recommendations on a product that meets specific requirements is typically much closer to making a purchase than someone performing a broad search on Google.
Rather than viewing higher conversion rates as evidence that ChatGPT outperforms traditional search advertising, Phillips said businesses should recognise that both platforms serve different stages of the customer journey.
Look Beyond Conversion Rates
Instead of comparing conversion rates alone, Phillips recommends evaluating broader performance metrics that provide a more complete picture of marketing effectiveness.
These include:
- Cost per acquisition
- Assisted conversions across multiple marketing channels
- Average order value
- Customer lifetime value
- Brand searches following ChatGPT exposure
- Returning customers rather than one-time buyers
He cautioned that shifting advertising budgets away from Google solely because ChatGPT appears to deliver stronger conversions could become an expensive mistake.
Instead, businesses should view AI advertising and traditional search as complementary marketing channels rather than competing platforms.
SEO Is Evolving Alongside AI Search
Beyond advertising, Phillips believes AI assistants are changing how businesses approach search engine optimisation (SEO).
For years, brands focused primarily on ranking highly in Google search results. Now, businesses must also consider whether AI assistants recognise and recommend their brands when users seek advice before visiting a search engine.
As a result, he believes digital PR, expert commentary and high-quality content will become increasingly valuable as AI platforms rely on trusted sources when generating recommendations.
Five Tips Before Advertising on ChatGPT
Phillips recommends businesses take a measured approach before investing heavily in ChatGPT advertising.
His recommendations include:
- Avoid comparing ChatGPT conversion rates directly with Google Ads.
- Start with a small test budget before reallocating existing marketing spend.
- Measure assisted conversions across different marketing channels.
- Invest in building brand authority and online credibility.
- Continue using Google alongside AI advertising rather than replacing it.
According to Phillips, the businesses that benefit most from AI advertising will not necessarily be those with the largest marketing budgets.
Instead, success will depend on understanding how customers make purchasing decisions across multiple platforms and building a marketing strategy that reflects this evolving digital landscape.
