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

New study reveals significant shortcomings in advertising effectiveness and raises questions about OpenAI's business model and IPO plans

ChatGPT ads generate significantly fewer purchases and less revenue than Google search ads and ChatGPT's unpaid recommendations.

For every dollar spent on advertising, businesses generate just $0.52 in revenue from ChatGPT ads, compared with $3.40 from Google search ads.

The findings call OpenAI's advertising strategy and the long-term financing of free AI services into question.

Frankfurt am Main

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 behaviour. The findings raise questions about OpenAI's business model and its potential initial public offering (IPO).

ChatGPT advertising significantly less effective than Google Ads

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 $0.89 – approximately 64 per cent less. Conversion rates were also considerably lower, at 0.37 per cent for ChatGPT ads compared with 1.17 per cent for Google search ads. Among the 102 advertisers with complete revenue data, 82 per cent 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 Christian Schulze.

More advertising could undermine ChatGPT's appeal

The study also suggests that, following the introduction of advertising, ChatGPT referred approximately six to eight per cent fewer visitors to online shops 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 Christian Schulze.

Study raises questions about OpenAI's growth plans

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.

About the study

For their study, "Can Advertising Fund Free AI? Evidence from ChatGPT's International Advertising Rollout", the researchers analysed data from 1,898 international online shops, covering nearly ten billion website visits between June 2025 and August 2026. Advertising effectiveness was assessed using data from 387 websites, including 102 with complete revenue data. Detailed information on the study is available for free at https://ecommerceresearch.org/chatgpt-ads
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About Frankfurt School of Finance & Management

Frankfurt School of Finance & Management is a private business school accredited by AACSB, AMBA and EQUIS. The university focuses on finance, economics and management, and offers Bachelor, Master, MBA and doctoral programmes as well as executive education courses and seminars for professionals and trainees. Frankfurt School is regularly placed among the top performers in major university rankings. For example, it ranks 31st in the latest Financial Times (FT) European Business School Ranking and is listed as the best German business school in the Times Higher Education Global University Employability Ranking. In the latest UTD Top 100 Business School Research Rankings Frankfurt School has also secured the top position in Germany. In the WirtschaftsWoche university ranking Frankfurt School ranks 3rd among all German universities for business administration. A central ambition of Frankfurt School is to promote entrepreneurship and startups, in particular with its Entrepreneurship Centre and the subsidiary Futury as the startup factory for the Rhine-Main region. Advisory is another important pillar of Frankfurt School's activities. It provides advice to businesses and organisations in emerging and developing countries, especially in the field of ESG. In addition to the main Frankfurt campus, Frankfurt School has study centres in Hamburg, Munich and Dubai and is globally connected with around 150 partner universities. www.frankfurt-school.de

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