S2. Ep4 - ChatGPT Ads Are Coming: What Business Owners Need to Know
Curious what ChatGPT's new ad platform means for your business?
You're not alone. In this episode, Katie and Noel break down OpenAI's announcement that ads are coming to ChatGPT, what that means for the platform's 800 million weekly users, and why only 5% of them actually pay for a subscription.
They reveal how these ads will work differently from traditional display advertising, what OpenAI admitted about their models in yesterday's town hall, and why some power users are already making the switch to other platforms. Plus, insights on whether 2026 could be make or break for OpenAI.
Perfect for business owners weighing up advertising opportunities, anyone wondering if ChatGPT is still worth paying for, and those curious about where the AI landscape is heading next.
How to find us:
Join our membership over on Skool, where we support you on your AI and automation journey. We share exclusive content in the membership that shows you the automations we talks about in action how to build them. Find out more about the AI Business Club here.
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If you would like dedicated help with your automations or would like us to build them for you then you can find our agency at makeautomations.ai
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Katie (00:26)
Hi, hello. Welcome back to another episode. Hi, hello. I'm Katie. And as always, I've got Noel here with me. Hi Noel, how you doing?
Noel (00:35)
Hello, yeah, I'm doing great, thanks.
Katie (00:56)
Good. So I'm quite excited about what we're talking about today. I feel like this is just going to be such a game changer for business owners and I even want to say the users. So today we are talking about ChatGPT ads and we're going to be talking also a little bit about what's going on with OpenAI as well, aren't we?
Noel (01:13)
Yes, yeah, I was really excited when I saw ads. I've never been so excited to see it.
Katie (01:21)
Yeah, I feel like that's probably not going to be the collective reaction from everyone. I think only a percentage of people are going to be like, oh my God, ChatGPT ads, amazing. Yeah, but.
Noel (01:38)
Yeah, I have seen a lot of people go, no, I don't want ads. No, don't do this. But yeah, it does make a bit of sense.
Katie (01:48)
Yeah, so we're going to be talking about like what this means for business owners, what it means for users. And obviously we'll be talking a little bit about what is happening right now with OpenAI. So where would you like to start Noel?
Noel (02:09)
I guess let's just jump straight into the ads. Let's talk about what they announced. I guess it was two weeks ago now when they announced it. But yeah, some of us...
Katie (02:17)
Okay, okay, so no messing around like we're literally a minute into the podcast episode and you're like, let's just go for it.
Noel (02:21)
Yeah. Jump straight in, yeah. Let's go crazy. I don't know, well, I was excited to see it. Saw the opportunity.
Katie (02:42)
Excited to see it, he's excited to talk about it. Okay. So, yeah, go for it, Noel. Jump in because, yeah, I can't hold you back any longer.
Noel (02:45)
Very true. So with ChatGPT ads, they're going to now be showing, or will soon be showing, should I say, advertisements to anybody who is on a free plan or is on the brand new Go plan, which I think is $8 a month. So they've added in that lower tier to make things a little bit cheaper for people, which is great.
Katie (03:19)
What?
Noel (03:20)
You know, there's a lot of people and I couldn't believe it when I looked this up. You know, they've got like 800 million users active per week and there's yeah, it's silly. Yeah. There's so many hundreds of millions of people using ChatGPT every single week and there's like four, maybe 5% are actually paid users. So they're on the plus plan upwards. You know, to pro enterprise business or whatever. There's not actually that many people paying for ChatGPT. And that's kind of where my business brain clicked in. I was like, hold on a minute, you know, where you'll be serving ads to hundreds of millions of users potentially every single day, which is good for a business, but from a user perspective, I get why people don't want to see ads. They see ads everywhere. They're quite sick of them. And I get that.
Katie (04:23)
Yeah. I mean, Meta just now come out weird. So if you log into like Facebook or Instagram over the last few days, you'll now get a prompt that pops up to say, do you want to continue using Meta? Well, if you do, you've now got either choose the free version, which you have ads or there's now a paid version. I think it was something like £3.99 to use it without ads. And I think that was a monthly fee. So really interesting, like that they've gone down that route as well.
Noel (04:55)
Yeah, I mean, they kind of have to, when you look at it. So to touch on kind of like the business of why ads would come along. You know, we're sat there using ChatGPT having a great time getting whatever you need. You know, that's great. You don't want to then be ad ad ad all the way down. It's like, you know, that's not really adding to the user experience, but at the same time, OpenAI don't actually have that many revenue streams to create this technology and host it. You know, they've got that 5% of people that pay for ChatGPT. You've got, I guess the API for people using that, you know, the developers and stuff. I'm sure they make a fair chunk of cash from that bit. And then the other bit is kind of investors. So other than that, right now, there's not really a great deal where they bring in income. I think ads is going to be a great way in order for them to get more money in and then keep progressing in the future.
Katie (06:12)
Yeah, I really didn't realise that so many people were on a free plan, especially like I, to be honest, I thought most business owners must be on a pay plan. So yeah, when you told me those numbers I was quite shocked at that. Yeah.
Noel (06:32)
Yeah, yeah, it's crazy, isn't it? But I suppose if a free plan, you know, it's good enough, you know, you might not use it all day every day. You know, you're happy with the models that they provide, then why would you, I guess, you know, you don't want to use projects, you're not interested in coding. Yeah, fair enough.
Katie (06:47)
Yeah. And I guess like I've seen people who don't have a business, don't run a business. I've seen them use like ChatGPT for like doing an advert for like a car that they're selling. Yeah, which is actually quite hilarious. Or like people use it to draft emails to companies and things like that. So yeah, it's really interesting. And I guess for them, they obviously, of course they don't need a paid version, you know, why would they? So yeah, just a free version would be absolutely fine, but really, really interesting. So do you want to tell us a bit more about like what the ads are going to consist of and how they're going to function within ChatGPT because at the moment, I think, I don't know if anyone's thinking like how I'm thinking they're thinking like nineties internet, where you've got all those like really annoying ads, like just, yeah, just like on that page. Really random. So yeah, obviously I know OpenAI are not going to like deliver that sort of interface.
Noel (08:03)
Pop-ups. Yeah, they've made it quite clear and said, you know, we're not just going to throw stuff at you, you know, with everything or throw you ads that make no sense with the context of what you're talking about. So the way it's kind of going to work, I guess, to put it into like a use case, let's say we were looking to buy a new TV. You know, you would go to chat, you'd be to you and then say, well, could you do like a search? Find me. I know I'm looking for this make, this brand, this sort of size TV, you know, what's about what the prices and it will go off, do that Google search and then deliver, you know, the reviews and all that sort of stuff back to you, which is great. But then that would also then be a great time for ChatGPT to then go through his ad campaigns and then go, who's selling these TVs, who's got an ad for that TV or something similar. And then at the end of the conversation, they then go, well, here's five ads at the end of the response. And you could go, I like the sounds of that. I like the reviews. There's a button there to go and buy it. I'll click it. And then off you go and you go purchase. So yeah, that's really cool.
Katie (09:35)
Do you think it's only going to be like, if you're searching for a particular product or service, or do you think, well, you're interested in this, so I'm now going to show you this. Yeah, so for example, like if you're searching for TVs, you might then get an ad from a furniture company selling you like a TV stand.
Noel (09:50)
It should, according to OpenAI it should just deliver what you're talking about in that conversation. It shouldn't then think, well, Noel clicked on this last time. I'm just going to show him an ad for that in a different conversation. It shouldn't do that. You could do, it depends if you ask for it. I mean, they're very strict in saying, it's only gonna be what you're talking about. So if you're not talking about the furniture, then it probably shouldn't, but that doesn't mean that it won't. And I guess they need to test that out. It is relevant, yeah, yeah.
Katie (10:34)
No, because it is relevant, isn't it? Because like if you're say, I don't know, putting in something, say you like you want help with your skincare routine, maybe you've got some issues, so then is it then going to show you something that's relevant to that?
Noel (10:52)
It should do. Yeah. It obviously all depends if that's available within, if somebody has a relevant ad for that, because the response, they've also made it quite clear that the response that the model gives isn't going to be based around whatever advertisements are available. So that's completely separate. So whatever it advises to do, it will be one thing. And then underneath it would then go, right, OK, well, is there anything in the ads campaigns that we could use? Yes, here they are. If there's nothing, it will show you nothing, I guess. But yeah, the response from the LLM, they've made it very clear that that's not going to be pushed in a certain way based on somebody's ad campaign to get you to click that button, because that's not a good user experience.
Katie (11:51)
No, it's not. So what does this mean for business owners who are interested? Because obviously we had Milana back on one of our episodes back in season one talking all about SEO for AI. So, you know, we were being featured within some of those searches, but I feel like now this is just taking it to another level, hasn't it? It's kind of like the difference between just doing SEO on your website and then actually using like Google ads.
Noel (12:25)
It is. Yeah. It's kind of interesting because you know, with these ads, we don't know how the businesses are going to input the ads. They've made no mention of that, you know, as yet. So what we've been told is to basically think like the user. So what are your customers asking for potentially to your products and services? So start thinking about that and then, you know, that's like thinking about what ads could I run for that particular product or service based on those questions. So I'm guessing they're going to ask you when you create the ad to list kind of like the topics and you know, things that people are asking for, in a kind of general sort of way. So, yeah, it's interesting, but the big thing for businesses is, you know, if you have like Facebook ads, you know, someone's doom scrolling, you know, they've been there for an hour. Your ad shows up on their feed, you know, they've got to look at it and go, yes, that's actually interesting. And then go, but I'm not that interested in keep scrolling. So you've got to make it catchy enough to stop them and get them to click on the ad.
Katie (13:50)
Yeah, you've got to have a really good ads campaign.
Noel (13:54)
Definitely. Yeah. And you know, they're not primed for purchase. You know, they're coming very, very top of your sales funnel. They've never heard of you potentially, you know, and then...
Katie (14:07)
Well, I do think that's dependent on your ad campaign because I have bought some excellent things from ads that I have seen on Facebook and Instagram. I will have you know.
Noel (14:13)
True. That explains all the TikTok shop. That is your worst I have to say.
Katie (14:30)
Yeah, but that's only because it comes in a TikTok bag. You don't know what else I've bought off of Instagram and off of Facebook because it comes in branded packaging and not like Facebook shop, Instagram shop. Yeah.
Noel (14:43)
Very true. Yeah. But yeah, go back to it. It's like, you know, they're not primed to buy that product. They might look at it and go, that's interesting. Click the link, read a bit more and then go, that's not really for me. Or the end goal is they click and then they go on.
Katie (15:03)
Yeah, well it's all based on previous interest or interest that they think you might be interested in, isn't it? Yeah, yeah, or things that you've clicked on in, like, you know, maybe cookers have followed you and stuff like that.
Noel (15:07)
Yes. It's all based on demographics and stuff, isn't it? Yeah. Maybe your phones listen to you, who knows? They always say it doesn't, but. Yeah, but with ChatGPT ads, you know the big thing is it's either that user is already primed and is already asking questions and looking for that particular service or product. So if your ad does then get shown to them, they're probably, I would say statistically more likely to click and then go through and purchase than what it would be if you just scroll past on Facebook.
Katie (15:58)
Yeah. The targeting is much better. I think with the ChatGPT ads. Yeah.
Noel (16:05)
Yes. Because like with ChatGPT, it could be targeting females between 35 and 40. But then if somebody who's 42, they won't get to see it. But if they ask ChatGPT that question, it doesn't care what age they are. It's kind of like they're interested in this topic and product, and then match it with that advertisement, which is really quite clever.
Katie (16:28)
Yeah, what do we think the cost is going to be to run these ads? Have we had any inclination or any hints thrown our way? Okay. Do you think they're going to be mega? I think they are. I think they're going to be really expensive to run.
Noel (16:41)
Not yet. No, no, they've been quite quiet. They could be, but... But I think at the same time, if you look back at Facebook and Google when they started first doing ads. Exactly, they both were so cheap. So it kind of makes sense that OpenAI would follow that sort of thing to get everybody in, get you excited, have a bit of a discount for the first six months or whatever, and then slowly start to creep it up.
Katie (17:04)
Cheapest chips! God, those were the days!
Noel (17:25)
And hopefully by then we've already made tens of millions and can afford.
Katie (17:25)
Yeah. Oh, just, we'd just be retired if we weren't even worried about ads at that point.
Noel (17:33)
Exactly, be on the beach.
Katie (17:36)
Everyone can come round for a cup of coffee, glass of champagne.
Noel (17:40)
Yeah, exactly. Yeah, I did. I did ask Claude the other week. I said, how many millionaires did Facebook ads make? And I was kind of doing. Yeah. Yeah, but they reckoned it was between 25 and 50 thousand millionaires were made. Probably, yeah, but I kind of.
Katie (17:49)
So many. I mean, I know a bunch. I reckon more than that. I think that's probably like just in the US.
Noel (18:06)
Yeah, maybe. Yeah. But when I was asking that question, because when ads first released on Facebook, there was only 50 million users a week. So, you know, that's a tiny, tiny amount compared to the hundreds of millions on ChatGPT. So that's the point where the light bulb went off in my head and I was like, oh my God, this is quite something, yeah. And then you see everyone on the free accounts in comments going, this is terrible. This is brilliant. I could just see opportunities.
Katie (18:40)
Yeah. So what other information do we know about these ads?
Noel (18:52)
So as well as like serving like specific products and services and, you know, click here to go off and do whatever. There's also, they've also shown an option where you could chat with the advertisement. So, yeah, which is kind of interesting as well. I kind of like that. So I think the sample that they showed was, it was like almost like a venue that you would hire kind of thing. And then it would give you the advertisement and say, well, you know, you could book here. And then underneath that was then like chat with this advertisement, and then you could click on that button and then you could then in a closed off little space in that chat window, you know, have a conversation and then go, well, how many people could I book in for it to be at this venue, whatever, you know, do you have IT facilities or, you know, what kind of cost is it? So you could have that conversation first and then be like, right, OK, this is for me. And then you then click on the button to then go off and contact the business and whatever to book it. So I thought that was really, really interesting. It'd be good to see how that works from an advertiser's perspective and what you could do with it. Because, that's kind of powerful because you're already kind of qualifying a lead before they've even got to you as well, kind of. You know, they've already asked those basic questions and then, you know, they're just coming in and go, right, well, I'm happy I know what you do. Here's my money, I wanna book in or buy whatever. Yeah.
Katie (20:34)
Yeah. I feel like this is going to be really exciting because the amount of things that people use ChatGPT to look up for them or to like find the best in the area or, you know, to shortlist things, the amount of businesses that it's going to help with these ads it's just going to be yeah amazing. I'm really keen to know prices and cost. Okay.
Noel (21:10)
Yeah, yeah, definitely. I mean, they haven't, the only thing they have mentioned is that there are some users in the US on the free plan might already be seeing these ads. So it was released to, well, announcement was a couple of weeks ago and they said, within two to four weeks, we're going to start showing these ads and testing them out basically. Yeah, I guess once they're happy with that, then they'll start giving us a bit more information because, you know, it's the owner.
Katie (21:40)
Yeah, we would like more information, please.
Noel (21:44)
Yeah, the onus is on them to get us in there and doing it so they can start earning more money, surely. But it's got to work first, I guess. Yeah, first things first.
Katie (21:49)
Yeah. Okay, so that's really exciting, yes. And obviously we will keep everyone up to date with ChatGPT ads when we find out more information and things like that. Because as you can tell, Noel's quite excited about this topic.
Noel (22:17)
Yeah and it is a Tuesday so it might be 6pm after we've finished recording. They might release it and they've got a habit of that. Who knows?
Katie (22:26)
Okay, so what else did you want to discuss today now on this episode about OpenAI?
Noel (22:30)
So I guess kind of from like a business perspective, I've seen quite a lot of content talking about the state of the finances for OpenAI. And there's a lot of really big investors, you know, they've invested in startups for decades and they're kind of looking at OpenAI and seeing some red flags and warnings and you know, OpenAI has got to build the data centres and all the infrastructure. They've got to buy all the bits and create all the models and all the software engineering that goes into it. And the expenditure currently is exceeding the income by some margin, apparently. So, yeah, there's some worrying signs there, but with things like ads, obviously that's going to help boost their revenues, which is good. But it's also kind of interesting because we've kind of seen a bit of a downgrade in ChatGPT in like the last six or so months. And yeah, when you kind of look at everything in a big picture, it kind of makes sense. And Sam Altman did a town hall live stream yesterday where there was like technical founders and things out in the room asking questions and one of the questions was, you know, why are these models kind of getting a bit dumber when it comes to written content? And yeah, and he was quite honest and open about answering that question and he was like, well, we kind of didn't bother because we didn't have the time or the money to go off and do that sort of thing. So we prioritised software engineering and technical ability over its written content. So when we moved from GPT 4.5 to 5, everyone was like, well, this is rubbish. Now you're creating social media posts that make no sense. It's like, yeah, it's not very clever anymore. And then we're going back to previous models to get that sort of content back.
Katie (25:04)
Yeah, so we were, I think having this conversation actually on last week's podcast about actually how ChatGPT is getting a bit forgetful and it's diluting itself when you're asking it questions on the same chat and you're like, you know, trying to give it more instructions and then it's almost forgetting what you've previously said. And I am finding that more and more and more at the moment so yeah it's kind of really interesting that they've now come out and said that because you know we've obviously seen it for the last couple of weeks that ChatGPT has completely changed its behaviour and it's not as strong as it once was so do you think that's gonna now turn a lot of people off of ChatGPT and like now head over to LLMs like Claude instead?
Noel (26:06)
Yeah, definitely. It's already happening and has been happening for a little while, I think. So a lot of paid users are kind of looking at what other things are available and thinking, why would I argue with a large language model like ChatGPT to get what I want when I could just put the same thing in Claude and it's like, yeah, sure. Here you go. I'll understand what you're talking about. Previous conversation histories, I find that's really good in Claude and serve you the answers that you need. So yeah, the people I've been speaking to have already shifted away from ChatGPT and they kind of just use it as on a free account just to do like really mundane little tasks kind of thing. Nothing business related, which I thought was really interesting.
Katie (26:53)
Yeah. Like writing a car ad or...
Noel (27:03)
Yeah, yeah, just silly little things like...
Katie (27:06)
Yeah, comparing spa breaks.
Noel (27:09)
Yeah, exactly. Yeah, it's quite good at that. And yeah, that shift is happening. Yeah, I think the people that are kind of moving away from it now are the ones that are probably signed up to it from day one, like we did. And we just kind of got to a point where it's like, why am I arguing all the time with it? It's not understanding basic instructions. It is. Yeah. And they kind of talked about the memory things. Well, yesterday on the town hall with OpenAI they basically, someone was like, you know, it just doesn't remember as well as it used to. And they were like, well, we are trying to fix that. We know we want that to be better. We want it to basically understand you fully. So it can offer answers that are a bit more personalised. So they want to go down that personalisation route, but they kind of know at the same time that coding and things that is earning them quite a bit more money, I guess, from the API perspective. So they've kind of moved their model from being like a generic good at everything to being really good at one thing and then not so good at everything else. So yeah, interesting. But yeah, they do want to make more generalised and a lot better models. But I guess we'll have to wait and see when they come out and see what it looks like. Yeah.
Katie (28:38)
Okay, so what else was said in the town hall yesterday with OpenAI or is there any other updates that you want to tell us about?
Noel (29:04)
So I guess a lot of the town hall was all software related really. There was a lot of CTOs. There was somebody asking actually about a bit slightly off topic but they were asking about biosecurity and yeah it was kind of no no but yeah they were like...
Katie (29:08)
Yeah. Okay. Well, we're not going to go down that route. No, no, I'm not surprised now that there was that lady at the back asleep, if I'm honest.
Noel (29:29)
Yes, 19 minutes in, she's slumped.
Katie (29:33)
Yeah, I mean same girl, same. If they're talking about that sort of stuff, I'm with her. Yeah.
Noel (29:40)
Yeah, exactly. So one good question that came up right at the end was there was a guy was like, well, his customers are kind of asking for like a, you know, where you would sign up for a service and it'd have like login with Facebook, login with Apple. So they were kind of like, could we have like a sign in with ChatGPT? And then their personal traits comes over or they would share like their developer API keys with that particular supplier. So the person providing a web app wouldn't have to have an OpenAI account. They would just rely on the user using the tokens from their account instead, which I thought was quite interesting. But yeah, Sam Altman seemed to think that was a good idea as well.
Katie (30:25)
All right, okay. Yeah.
Noel (30:35)
But the one thing he kept asking was, if you've got any ideas, just let us know and we'll try and build it. Yeah, it's like, well, if you run out of ideas.
Katie (30:41)
All right. Okay. Open to feedback. Well, I think at this moment, like you said, if they're not bringing in the income that they want, they obviously have this need to keep people on chat. So therefore if there's any updates or new features that people want, and actually they're not very expensive, but they're going to keep customers, then they're going to try everything in their power to do that rather than people leave and use other LLMs, which I guess they are going to worry about, especially if they've got these ads starting. You know, they don't want 800 million followers then because they haven't been able to keep up with the strengths of ChatGPT, tons of people go, actually, I'm going to now move over to Claude. It doesn't look good, does it? From an ad perspective and people aren't going to pay as much money for the ads if there's not as many people using it.
Noel (31:51)
Exactly, yeah. I think 2026 would make or break OpenAI, I think. Yeah, it's going to be an interesting year for them, that's for sure.
Katie (32:00)
Yeah. Well, we'll definitely keep everyone updated. And obviously, as the ads do come out, then we will add tutorials and information into our membership AI Business Club over on the Skool platform. So if you want to come and join us, we will leave the link below for you, where we go through step by step AI, AI automations, prompt engineering, all of that good stuff. You've got Noel in there. You know, he's there to ask questions, get support, get help as well. So yeah, and it's a really lovely community where beginners are completely welcome. Thank you so much for listening to this week's podcast. We hope you've enjoyed it and we will catch you for another episode very soon.
Noel (32:55)
Absolutely.
