top of page
Search

Why Small Businesses Should Consider ChatGPT Ads

ChatGPT officially allows you to run Ads that appear in chats with their Free and Go users. This is the frontier of AI advertising and it gives businesses a way to get in front of users asking ChatGPT about the things their business solves.

That's the headline. The more interesting story is why this matters, and why we think the businesses that pay attention now will have the real advantage over the ones that wait.


The Medium has Changed

For twenty years, the way people looked for things online was pretty consistent. You opened Google, searched in plain terms what you were looking for, read through results, advertised and organic, clicked through links, and repeated until you found what you wanted. The entire PPC industry is built on this exact behavior.


ChatGPT and other LLM's have broke this pattern. People are no longer typing fragmented bits of text anymore, they're fulling describing their situation in sentences, if not full paragraphs, with follow up responses from an LLM to help refine what they're looking for.


This is an entirely new landscape from the era of search. It's taking away the experience of the user looking through a bunch of links on a search engine, and instead, the user is having an LLM do the research for them and present them with options. Google's I/O this week shows this even more.


The Data Reflects These Changes

The shift in behavior between search and LLM's is real and getting wider:

  • 42% of people now prefer AI chatbots over search engines for multi-step research (Doc Digital SEM analysis of BrightEdge data, 2026)

  • Hybrid search journeys where someone bounces between Google and ChatGPT in the same buying process now makes up 18% of all sessions

  • A joint OpenAI and Harvard study of 1.5 million conversations found that 24% of ChatGPT prompts are "pure search" (facts, products, recipes) and another 51.6% are "asking intent", users seeking advice or guidance to make a decision.

  • Google session depth averages 2-3 queries. Meanwhile, ChatGPT conversations often run 10-20+ exchanges, meaning the user is going deeper into a problem before they make a decision.

  • ChatGPT now handles an estimated 12% of Google's search-equivalent volume.

The takeaway isn't that Google Search is going away, but the way people are searching is changing meaningfully, especially when it comes to high-intent research.


How ChatGPT Ads Work

The format is intentionally restrained. Ads appear at the bottom of a ChatGPT response in a clearly labeled, subtly tinted box. They don't influence the AI's response, and they only show up for users on their Free and Go tiers.


The targeting is what makes this interesting. Instead of the traditional PPC approach of bidding on keywords, ChatGPT ads use contextual matching. The system looks at the topic and intent of the actual conversations the user is having, plus additional context it has on the user, and surfaces the most relevant ad.


OpenAI opened the self-serve Ads Manager to U.S. advertisers in May 2026. Key facts as of right now are:

  • CPC and CPM bidding are both available depending on if you are targeting engagement or awareness.

  • No minimum spend (the original pilot required $200,000, that floor is gone).

  • Conversion pixel for measurement launched alongside the self-serve platform

  • Currently U.S.-only, geographic targeting is at the country-level (no state, DMA, or city targeting yet)


Who ChatGPT Ads are a Good Fit For

ChatGPT Ads are a good fit right now if:

  • You sell nationally (B2B software, e-commerce, professional services with broad reach)

  • Your buyers do their research before they decide

  • You can articulate what you do in a way that maps to how someone would describe their problem in conversations


ChatGPT Ads are not yet a good fit if:

  • You need detailed geographic targeting

  • You have no website or your landing pages aren't conversion ready


Phillips Business Consulting Can Help

Phillips Business Consulting is treating ChatGPT Ads as a first-class service line alongside our Google and Meta Ads management. We're running campaigns on it for our own business and believe in it strongly as a major medium of digital marketing going forward.


ChatGPT Ads doesn't currently allow for agency management, but you can add us as a user once you create your account and we can create and manage your campaigns for you.


If you're curious whether ChatGPT Ads would be a good fit for your business, we can get on a discovery call with you to help explore that.




 
 
 

Comments

bottom of page