Who in their right mind spends $172 on ads to sell $89 worth of stuff?

Sam Altman called advertising "a last resort" for OpenAI less than two years before he switched it on, and a new study of nearly 1,900 online shops says the last resort isn't working either.¹

Pay Google to send 100 people to your website and it costs you about $72, and those 100 people buy $245 worth of stuff between them. Pay ChatGPT to send you 100 people and it costs you $172, and they buy $89 worth. You've spent nearly twice as much as you took, before you've paid for a single product, a box or a stamp.

And that's for the shops that sold anything at all. Of the shops in the study that paid for ChatGPT ads, 84% didn't make a single sale from them. The people who did buy spent $74 less per order than people who came from Google.

You've spent nearly twice as much as you took, before you've paid for a single product, a box or a stamp.

The researchers, Maximilian Kaiser and Christian Schulze, worked out what ChatGPT would have to charge per visitor to be as good a deal as Google: about 26 cents. OpenAI is charging $1.72 and upwards, and tells advertisers to start at $3 to $5. That's more than six times worse value than Google, and Google's hardly a bargain to begin with.

It doesn't even pay for what it's meant to pay for. OpenAI makes about a dollar a year from ads for every person using ChatGPT for free, and each of those people costs about five dollars a year to run, by OpenAI's own figures. To cover that, the researchers reckon ChatGPT would need to show more than seven ads every time someone asks it about buying something. To hit the money OpenAI has promised its investors by 2030, it would need about sixty. Every time.

So the ads have to start working, and there's one obvious way to make that happen. At the moment the ad sits underneath ChatGPT's answer with a label on it, which is why it's easy to ignore. Put it inside the answer and it works. In one experiment the study mentions, when the AI itself argued for a product someone had paid for, most people picked it, and most of them didn't notice it was an ad even when it was labelled.

That's your free AI assistant working for whoever paid most and talking you into it without you even noticing. Lovely.

We built VIA the other way round. Your Personal Shopper works for you and nobody else. You say what you want, and brands pay a tiny amount to answer, so the money comes from sellers talking to people who've already asked. No brand can pay its way into what your agent tells you.

Advertising was supposed to keep AI free. It looks more likely to make it worse. I'd rather the agent worked for the person using it. Get yours at app.getvia.xyz.