ChatGPT ads switch to cost-per-click as CPM rates collapsed 58%
Ten weeks after launching ads in ChatGPT, OpenAI has already abandoned its original pricing model. The company switched from cost-per-thousand impressions to cost-per-click on 15 April, with bids set between $3 and $5 per click, according to screenshots of its new ads manager reported by The Information.
The reason is straightforward: the $60 CPM OpenAI charged at launch in February had eroded to as low as $25 in some cases. A leaked StackAdapt deck shared with select buyers on 27 March offered CPMs as low as $15, a quarter of the launch rate. A volume-dependent impressions model stops working fast when the floor drops that far.
What changed in the ad product
Along with the pricing shift, OpenAI cut the minimum spend from $250,000 to $50,000 and opened its self-serve ads manager to global advertisers on the same day. International expansion to Australia, New Zealand, and Canada followed within 48 hours.
- Ads appear at the bottom of ChatGPT responses, labelled “sponsored”
- Product-led queries can include sponsored product cards similar to Google Shopping
- Free tier and $8/mo Go plan users see ads; Plus, Pro, Business, Enterprise, and Education subscribers do not
- Targeting is contextual, matched to the current conversation topic, not demographic or third-party data
- Advertisers receive only aggregated data showing total views and clicks, not conversation content
OpenAI also partnered with Smartly and Criteo to build conversational ad formats beyond static placements. Criteo connects to a network of 17,000 advertisers. A conversion tracking pixel supports lead creation, order creation, and subscription start events.
The financial pressure driving this
OpenAI generated $13 billion in revenue in 2025, up 236% from $3.7 billion in 2024, and is currently producing roughly $2 billion per month. It closed a $122 billion funding round at an $852 billion valuation on 31 March, led by Amazon, Nvidia, and SoftBank.
Despite that, the company is projected to lose approximately $14 billion in 2026 on compute, research, and infrastructure costs, with profitability not expected until 2030. Internal targets include an IPO filing in the second half of this year and a 2027 listing at a potential valuation of up to $1 trillion. Advertising is the fastest path to closing that gap without another fundraise or a subscription price hike.
OpenAI projects $2.5 billion in ad revenue for 2026, scaling to $11 billion by 2027 and $100 billion by 2030. The US market for AI search advertising is projected to grow from $1 billion in 2025 to $25.9 billion by 2029, representing 13.6% of all search ad spending. The two-month pilot already topped $100 million in annualised revenue with several hundred advertisers, including Target, Ford, Adobe, and Expedia.
How competitors are positioning
The AI ad market is splitting into two clear camps. Google is weaving advertising into 25.5% of AI-generated search results, extending its existing infrastructure. OpenAI is building a parallel platform from scratch.
Everyone else is running the other direction. Perplexity tested sponsored follow-up questions in 2024 and 2025, then dropped advertising entirely over user trust concerns. It is now targeting $500 million in subscription revenue as the explicit ad-free alternative. Anthropic ran Super Bowl spots titled “Deception,” “Betrayal,” “Treachery,” and “Violation” with the tagline “Ads are coming to AI. But not to Claude,” and reported an 11% jump in daily active users and a climb to seventh on the App Store following the campaign.
The trust problem that does not go away
An Ipsos survey found that nearly two-thirds of US adults say ads in AI search make them trust the results less. A boycott campaign called QuitGPT has gathered more than 200,000 sign-ups since late January. On the day ads launched, OpenAI researcher Zoe Hitzig resigned and wrote in the New York Times that ChatGPT’s conversation logs represent “an archive of human candor that has no precedent,” warning that OpenAI risks following “the same path as Facebook.”
OpenAI says it does not build audience segments from demographics or third-party data and does not show ads to users it identifies as under 18. But the structural tension is real: the same conversations users treat as private are the signal that makes contextual ad targeting work.
CNBC reported in March that the test was “moving too slowly to meet the hype” and that OpenAI “can’t prove the ads are working” due to the absence of mature measurement tools. CPC at least gives advertisers a metric they understand. Whether that translates into sustained advertiser demand will determine whether this becomes a real revenue line or another rate that collapses in ten weeks.
I’m founder of BizStack at Cagri Sarigoz LLC and a passionate advocate for entrepreneurs.
With over 14 years in tech, marketing, and AI, including my role as Head of SEO at CitizenShipper and co-founder of TaleBot at Intale AI, I’m dedicated to sharing genuine, useful product insights and tips.
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