San Francisco’s stretch of Highway 101 is notorious for billboards hawking niche software to other tech firms. ChatGPT, developed just down the road, has so far followed a remarkably similar pattern.
Advertisements pitching business software to corporate buyers constituted the largest share of ad impressions on ChatGPT from March through August at nearly 20%, according to a new study by marketing agency Graphite.
An additional 8.5% of ChatGPT ad impressions during that window promoted business and professional services, while 4.6% featured developer tools, the report found, based on Similarweb user data.
OpenAI introduced ads on its flagship AI service in February and is working to build the business into a significant revenue stream ahead of its planned initial public offering next year.
Some encouraging news for Sam Altman: Graphite discovered that the click-through rate for ChatGPT ads more than doubled from late March to early September, suggesting the company is improving its targeting. And fewer than half of ad-eligible users have been served an ad at all.
“There’s a lot of upside, or there’s a lot more reach that they can hit,” Ethan Smith, Graphite’s CEO, told Themoneytimes.
ChatGPT ads lean heavily toward SaaS sales
OpenAI says the ads it places on ChatGPT are relevant to the conversation a user is having with the chatbot. The company also prohibits certain categories, such as legal services, politics, and gambling.
So far, many of the biggest advertisers are software companies, Graphite’s report shows.
Monday.com and HubSpot were among the advertisers that appeared most frequently in the data, along with Resume.io and Canva. The form builder site Jotform, another top advertiser, ran more than 930 varieties of ChatGPT ads in just a month, Graphite found.
The agency noticed considerable fluctuation when it examined companies over time. HubSpot and Canva each advertised in a burst before tapering off over the summer. Some companies, like Zapier and the Wall Street Journal, dropped off entirely by the end of the reporting period.
Cursor, the AI coding company acquired earlier this year by SpaceX, also advertised heavily on ChatGPT, according to the Similarweb data.
Smith said the presence of Cursor and other AI tool providers like Speechify among the top ChatGPT advertisers is easy to explain: if you’re using a chatbot, you’re more likely to use those other tools, too.
“It’s self-selecting people who are necessarily AI-forward,” he said.
OpenAI’s ads business remains in flux
At a Goldman Sachs conference in early September, OpenAI CFO Sarah Friar said the company’s ads team is still working on the fundamentals of the product, including figuring out pricing and deploying it globally. She said the business had hit the $1 billion mark in annual run-rate revenue.
“We’re starting to really see some strong outcomes for advertisers who care about performance,” Friar said. “And this is all before we’ve really launched a format that feels truly endemic to AI. That’s what I get super excited about.”
It isn’t totally clear what an AI-native ad format would look like, but Friar said she’d like the ads product to eventually be like “if Google and Meta had a baby.”
Meta and Google have vast amounts of demographic data on their users. As OpenAI tries to figure out how to make its ads more valuable, Smith thinks the company has room for optimism.
“I suspect that the targeting is much harder here and will probably improve much more over time and might become, perhaps, hyper-relevant,” he said.
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