ChatGPT Ads Generate Far Less Revenue Per Visit Than Google Search

In bad news for ChatGPT’s ad business, a new study indicates that the company’s ads generate far less revenue per visit than traditional Google Search ads.

The report comes by way of researchers at WU Vienna and the Frankfurt School of Finance & Management. In their report, they acknowledge that advertising could be a way for AI companies to continue offering their service for free, but there are inherent challenges with the effectiveness of those ads.

In particular, ChatGPT ads were found to generate significantly less revenue than Google Search ads.

In US traffic, a paid ChatGPT visit generated $0.89 in revenue per session against $2.45 for a paid Google Search visit, a 64% shortfall. Paid ChatGPT visitors converted at 0.37% versus 1.17%.

In addition, there is a significant disparity in the price of what the clicks are worth.

At paid search’s rate of return, a paid ChatGPT click is worth about $0.26. The largest publicly known account paid $1.72 per click.

The researchers come to the conclusion that ChatGPT’s ads are not enough to finance free access.

Advertising could keep AI assistants free and make ChatGPT a Google Search competitor if advertisements do not devalue the product and justify their price. This study tests both conditions during ChatGPT’s staggered international rollout, with the European Union untreated, using data from 1,898 online shops selling $16 billion annually.

The introduction of advertisements moderately reduces the volume but not the conversion of organic ChatGPT referrals, a proxy for product value. However, paid ChatGPT visits perform worst among major channels, offering less than a sixth of the value for money of paid Google Search. Current performance is not sufficient to finance free access costs.

The report is bad news for OpenAI, and the AI industry in general, as companies look for ways to monetize their offerings and offset the massive cost of developing the tech.



* This article was originally published here

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