The AI Daily Brief: Artificial Intelligence News and Analysis
How to Make ChatGPT Ads Not Suck
19 Jan 2026
Chapter 1: What is the main topic discussed in this episode?
Today on the AI Daily Brief, we are talking about OpenAI's announcement that ads are, as they were always inevitably going to, coming to chat GPT. The question is, can they make them not suck? And I think I have a few ideas for how they could achieve that. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
All right, friends, quick announcements before we dive in. Now, let's talk about advertising in ChatGPT. On Friday afternoon, the official OpenAI account tweeted, In the coming weeks, we plan to start testing ads in ChatGPT free and go tiers.
We're sharing our principles early on how we'll approach ads, guided by putting user trust and transparency first as we work to make AI accessible to everyone. What matters most? Responses in ChatGPT will not be influenced by ads. Ads are always separate and clearly labeled. Your conversations are private from advertisers, plus pro, business, and enterprise tiers will not have ads.
They also show an example of someone asking about simple but authentic Mexican ideas for their dinner party, which led to a hot sauce, which led to a Harvest Groceries ad focused on hot sauce. Now, in their announcement post, they really focus on the fact that advertising is their way to make sure that access to hyper-intelligent AI assistance remains available to everyone.
They write, AI is reaching a point where everyone can have a personal super assistant that helps them learn and do almost anything. Who gets access to that level of intelligence will shape whether AI expands opportunity or reinforces the same divides.
So then they say, in the long run, ads are what's going to make OpenAI able to continue to provide lots and lots of otherwise free users with high quality service. They expand a little bit what they say about their ads principles from the tweet. Some of them are repeated like answer independence and conversational privacy, but they also articulate a principle of mission alignment.
Our mission, they write, is to ensure AGI benefits all of humanity. Our pursuit of advertising is always in support of that mission and making AI more accessible. And alongside that, another principle they articulate is long-term value. We do not optimize for time spent in ChatGPT. We prioritize user trust and user experience over revenue.
They also hint that despite their examples being extremely simple display ads taking advantage of the high intent of ChatGPT users, maybe they'll think about more creative strategies in the future. They write, given what AI can do, we're excited to develop new experiences over time that people find more helpful and relevant than any other ads.
Conversational interfaces create possibilities for people to go beyond static messages and links. For example, they say soon you might see an ad and be able to directly ask the questions you need to make a purchase decision. They also note ads can also be transformative for small businesses and emerging brands trying to compete.
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Chapter 2: How will ads in ChatGPT differ from traditional advertising?
Given that they have many, many Facebook veterans, it looks very likely that OpenAI has the potential to build one of the greatest ad businesses of all time. OpenAI is essentially building Facebook 2.0, and all of the old Facebook peeps are doing it. Tanmay writes, My thoughts on OpenAI ads. I think it will be a game changer in online advertising. ChatGPT is affiliate marketing on steroids.
It grows to know you personally and given context will tell you exactly what to buy and if you buy, OpenAI gets a cut. Shared memory across chats will only bolster this. The level of personalization will be unmatched and unlike anything seen in online advertising before. When this rolls out to all users, OpenAI revenue will go ballistic.
Now, one note showing that these folks might have the right of it. In early studies, it seems very clear and consistent that ChatGPT users have much higher intent compared to Google searchers. One study, for example, found that ChatGPT traffic converted at 16% as opposed to Google Organics 1.76%, a 9x difference in the conversion rate.
I've seen many, many other studies, and while that one is on the high end, they all show ChatGPT being higher intent by a meaningful factor than traditional Google search. This makes sense intuitively. If you're asking questions about something in ChatGPT, you're probably doing a more conscientious form of research than just idly googling something.
The problem, of course, is that the communication around this has not been good. Met as Jason Yim wrote, In May 2024, Sam Altman said, Ads plus AI is uniquely unsettling to me and called advertising a last resort. Today, ChatGPT is getting ads. OpenAI is burning through cash at an insane rate.
So now the company that positioned itself as the ethical AI alternative to big tech is building an ad platform to monetize its 700 million weekly users. And Sam Altman's new take? I love Instagram ads. You can't make this up. Nate Haik writes, So we are all in agreement now that the whole AGI and AI abundance narratives were total scams, right?
Benjamin DeKraker wrote, Remember just last month OpenAI implied that people were lying about seeing test ads in ChatGPT and that ads were just silly rumors? They were 100% working on ads at the time. Now, interestingly, Ben Thompson from Strategery argues that OpenAI should have already put ads in GPT.
In a recent interview on TBPN, he said, they could have launched the world's crappiest ads in 2023. By today in 2026, the ads would be good. They'd be making money and people wouldn't rebel against it. Now they're going to have to launch ads and they're going to suck. And people are going to be like, this sucks. I'll just go to Gemini.
Now, this reflects something that I said back when they launched the Sora app. To anyone watching the numbers, it has been completely inevitable that at some point ChatGPT was going to have to be an ad-supported model. It's only something like 5% of users that are converting to paid, and you just can't have 95% of users who are using ChatGPT as much as they are and not have an ad-based model.
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Chapter 3: What principles guide OpenAI's approach to advertising?
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I think ultimately that even without a lot of creativity in the formats, part of the cost-benefit analysis of free services on the internet is the truth in the old maxim that if you're not paying, you're the product. Advertising is, simply put, the way that services are offered for free. But obviously OpenAI should aspire to more.
If for no other reason, then Google is one of the most powerful advertising juggernauts in the history of the world, and so OpenAI really needs to get creative to have some sort of differentiation. So let's turn now away from what has been announced to how I would try to make ChatGPT ads not suck if I were in charge. With the help of GenSpark, I put together this strategic presentation.
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Chapter 4: How can user trust be maintained with ads in ChatGPT?
Category one is, of course, transactional advertising. And this is where OpenAI is even starting right now. However, there might be some ways to better align the incentives. Right now, advertising is sold on the basis of potential, cost per view or cost per clip. That is the pay for attention model.
The obvious thing to experiment is to shift that model to pay for results instead, to have verified outcomes, where the advertiser pays only when the transaction completes and users confirm satisfaction. Think $50 for a booking instead of $2 for a click.
Now, for those of you who are in advertising out there rolling your eyes, because this would seriously diminish the number of advertisers who are able to successfully get value from this because a lot of the products are crappy, that's kind of the point.
This would prioritize advertisers who had something valuable to offer where there actually was going to be a verified outcome, as opposed to just people who are buying inventory at scale. What's more, we can take advantage of the fact that users of ChatGPT are high intent to actually allow them to shift into a different mode, which makes them more open to everything around commerce.
Think a user-initiated commercial mode, a help-me-buy button. The old paradigm is interruption, the new paradigm is this as a feature. Think buying agents that actively work for the user, negotiating and filtering options with a clear context switch. Here's an example of what some of that transactional advertising might look like.
Here a user has asked, help me book a flight to Tokyo with a $1,200 budget. ChatGPT responds, here are two ways I can help. Either help me book, which shows options with a book now button, or an ability to just see options without the advertising integrated. You can also see here that the airlines in question only pay if you complete the booking.
Here's another example of being able to switch between just comparing options or actually having assistants signing up with those disclosures around when and how the advertiser pays. Next up, let's talk about offers. Offers are going to be when an advertiser doesn't just serve you up a display ad, but provide some sort of discount or incentive to go take an action now.
Well, maybe we create an offers exchange where in addition to getting served contextual offers in-situ as part of conversations, There's also a place where you can go browse the current offers that are available.
And for those of you who think they're crazy, there are entire categories of websites that make hundreds of millions, if not billions of dollars a year, basically doing things like this, giving people the ability to browse current offers to optimize the timing of their shopping. So I think that this is two parts.
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