As I dive deeper into the world of ChatGPT, I’m amazed to learn that OpenAI’s latest innovation has already hit the milestone of $100 million in ad revenue, and we’re on the brink of more exciting developments.
Just six weeks into the ad pilot, it’s clear that OpenAI is just getting started with its rollout, showing ads to less than 20% of eligible users in the US free and Go tiers daily.
The numbers are impressive. Over $100 million in annualized ad revenue has been generated with a mere fraction of the potential ad capability being tapped.
To break it down:
Only 20% of eligible users see ads, yet the figures are astonishing.
85% of Free and Go users qualify to see ads, hinting at enormous future growth.
More than 600 advertisers have already hopped on board.
Looking forward to what’s next. In April, self-serve advertiser access is set to launch, which will no doubt broaden the landscape further.
We’re on track for self-serve access in April.
Expanding geographically into Canada, Australia, and New Zealand is on the horizon.
Dave Dugan, formerly of Meta, has been brought on board to drive ad sales.
Why it matters to me. ChatGPT’s swift growth to $100 million in revenue illustrates a substantial opportunity, particularly since the ad inventory is set to expand dramatically.
April’s self-serve access is a game-changer, opening up the platform to many more advertisers beyond the 600 brands currently engaging. It’s reminiscent of the early days of search and social ads—getting involved early could be very rewarding.
Focusing on ad quality. OpenAI reports that less than 7% of ads are considered ‘low relevance’ by users. Improving this figure is a priority, which is reassuring as user trust is crucial.
The broader picture. Ads are pivotal for OpenAI’s path to going public. With projections to earn over $17 billion from ChatGPT users by 2026, ads from the free user base will play a significant role.
The bottom line is clear. Generating $100 million from just 20% of potential users in six weeks suggests a strong early market signal. As self-serve access launches and the audience grows, those who are hesitant may soon realize the platform’s potential.
When I hear the terms “incremental” and “incrementality” in affiliate marketing, I sometimes wonder if they truly reflect their intended meaning. Often, they don’t indicate an actual increase in sales, new customers, or revenue. Many affiliate marketers seem to focus only on the affiliate channel, overlooking the broader company impact.
I’ve learned to question whether sales would occur without an affiliate program to assess true incrementality. This helps me determine if a partner genuinely brings new customers and revenue or just diverts those already heading towards checkout.
High-intent traffic is frequently mistaken for incremental value. But just because someone is ready to make a purchase doesn’t mean this touchpoint wouldn’t exist without affiliates. For instance, a coupon site might target consumers already at checkout, simply searching for brand discounts on Google.
Closing an affiliate program today might mean touchpoints still occur without extra costs like commissions and fees. Sure, this traffic involves high intent—it’s consumers in the checkout line. Nonetheless, I might be losing money if the touchpoint provides low or no value.
Note: Not all coupon or deal sites are detrimental. Some might genuinely add value, so I always ensure to test if sales remain consistent without the program before deciding.
The more customers heading to my checkout, the more top-ranking affiliates on Google earn. They depend on intercepting my traffic, which is why they’re sometimes labeled as parasitic. This is where incrementality becomes crucial.
Do touchpoints that consistently occur without your program constitute incremental sales? It’s vital for me to define incremental sales and value clearly.
Incremental sales are those driven by partners, which wouldn’t occur without them. Incremental value arises when affiliates enhance customer value through means your company couldn’t achieve, like increasing cart size or building trust for more conversions.
As a brand, I can offer discounts without an affiliate program. Even without the program, I could submit deals to sites that rank for my brand + coupons, achieving similar sales without incurring network fees, commissions, or salary costs.
If partner-exclusive deals drive sales through unique platforms, it demonstrates incremental value. That’s something unattainable without them, making the affiliate an asset.
Here are some content types and programs adding real incremental value.
Product and brand comparisons
Product and brand comparisons represent two key areas where affiliates can drive value. The affiliate decides which brand or retailer secures the sale, influencing customer choices. For smaller brands, appearing in comparisons with major players can establish credibility and drive incremental revenue.
Affiliates who present unbiased comparisons and reviews cultivated trust, adding value and potentially broadening my customer base.
Tip: Utilizing non-affiliates for brand comparisons can be a more cost-effective strategy.
For instance, I might pay a one-time fee for an independent comparison versus ongoing affiliate commissions, potentially saving money long term.
Moreover, for a smaller brand, being included in comparative reviews can be a significant opportunity to weave into larger brand traffic and attract their customer base.
Types of partners that can offer this value include:
Review and comparison websites.
Listicle sites (SEO and PPC).
YouTubers.
Communities and forums with user-generated content and shopping guides.
When it comes to creators, both those who review and those who don’t, they possess unique content styles that can enhance incrementality.
Some creators add significant value simply through brand mentions and their trusted recommendations—whether they produce detailed reviews or provide other engaging content.
Ultimately, I’ve found that detailed data analysis and testing help me navigate what incrementality means for my business. This involves discerning between true incremental partners and those who merely capitalize on existing customer journeys.
I realized that relying on generic traffic reports from agencies wasn’t showing real business outcomes. Budgets are tight, yet investment in vendors continues with little impact on the sales pipeline.
Focusing solely on increasing traffic volume is outdated and could hide true commercial performance. Now, it’s essential to create an acquisition strategy that impacts buyers and secures the profit and loss margins even before sales happen.
As a marketing leader, I’ve learned to question both internal teams and external agencies rigorously. I no longer settle for just operational outputs; financial accountability is crucial, focusing on pipeline contributions, LTV to CAC ratios, and cutting down on paid media reliance.
The New Path to Purchase: Why Traffic is Bleeding Your Budget
Chasing informational traffic at the top of the funnel can drain budgets. If those clicks don’t lead to sales, it’s a vanity metric rather than a meaningful business outcome.
With many consumers relying on large language models (LLMs) for comprehensive research before reaching search engines, it’s crucial to be recognized as an authority during this AI-driven research phase.
The 7.48% Reality: The Power of the Educated Buyer
The difference in traffic quality is evident. In our experience, standard organic searches convert at just 2.75%, whereas AI searches boast a 7.48% conversion rate.
Consumers today trust AI tools like Gemini, ChatGPT, and Perplexity. When they synthesize content to recommend a product, that endorsement often holds more weight than traditional branded content. It’s a powerful trust-building tool.
Once a consumer clicks on an AI-driven recommendation, they’ve often already decided, based on your authoritative content, and are ready to make a transaction.
From Found to Cited: Architecting the Default Recommendation
I realized that by transforming our digital asset approach, we can secure that 7.48% conversion rate. It’s not just about ranking in search results anymore; it’s about being the definitive expert cited.
Success lies in transforming marketing strategies into structured capital management.
The old way: Generating large volumes of traffic with lengthy blog posts that don’t contribute to the pipeline.
The new way: Develop a GEO hub that offers tools like cost calculators and detailed data, establishing clear expertise and authority.
LLMs demand facts and consensus, so by building assets based on proprietary data, we become the go-to recommendation.
Strategic ROI: Using Citation Authority to Reduce Ad Spend
Viewing SEO solely as a traffic strategy is outdated. It needs to be considered a strategic asset that lowers customer acquisition costs.
I align our organic assets closely with high-cost marketing initiatives to back off on defensive ad spending when organic trust is established.
Here’s my approach to integrating paid and AI search efforts:
IF we become the default AI recommendation, THEN our paid strategy must reduce brand bidding, slashing acquisition costs.
IF we identify profitable queries through paid search, THEN SEO should proactively capture this demand.
IF a competitor gains better AI recommendation, THEN paid campaigns should quickly address this while SEO adjusts strategies to regain AI trust.
The Monthly Cannibalization Review: Your Immediate Action Item
I ensure that our Head of Search and Head of Paid Media engage monthly to review our efforts against paid brand bidding, avoiding unnecessary spending.
This strategy protects capital by reallocating funds from redundant ads to new market opportunities.
The Enterprise Scorecard: 3 Questions to Ask Your Agency Tomorrow
I challenge vendors with these essential questions to determine their value beyond task completion.
1. What’s our citation share of voice for our highest-margin categories?
Ensure organic strategies align with high-margin product research phases.
The expected response: We’ve identified the critical queries and secured primary citations, significantly boosting our market presence and financial outcomes.
2. How is our citation strategy directly reducing our paid media CAC?
Provide evidence of organic authority fulfilling demand typically met by paid ads.
The expected response: By securing key AI citations, we’ve reduced reliance on paid ads, dropping CAC and redirecting funds to new market strategies.
3. Are our digital assets structured for LLM extraction?
I push my teams to design AI-friendly content that resonates in search engine results.
The expected response: We have redefined our content structures to enhance AI extractability, leading to more frequent recommendations and increased conversion opportunities.
Demand Commercial Outcomes, Not Operational Output
In challenging times, SEO must be treated as a vital business unit with accountability for revenue outcomes.
Resist being swayed by vanity metrics. Insist on measurable financial impact to demonstrate true success.
Any agency or team unable to justify their effect on financial results won’t maintain relevance. It’s about being the cited authority before transactions even happen.
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