Observed Signal · Dec 15, 2025 · Opinion/Analysis · Source: Marketecture · Impact: 2/5 · Sentiment: Negative
OpenAI Search Ads Won't Be a Big Thing
Erez Levin, Leader of Emet Advisory, presents a contrarian view on monetizing OpenAI’s search. He argues that AI search ads will not scale like traditional search advertising due to fundamental differences in user expectations for AI-generated answers and how ads fit within those results. Levin contrasts AI search with Google Search, noting that users typically want concise answers and may distrust paid rankings. He suggests that ads could only add value in discount-type scenarios and raises questions about ads within AI agents. He estimates OpenAI’s advertising revenue will be a very small share of current search ad revenue (likely under 10%, probably under 5%). The piece references Google and Perplexity, privacy trends (Apple/Safari), and the broader debate about monetizing AI-driven search.
Contrarian view on OpenAI ad monetization; moderate impact on AI ads monetization discourse.
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Key Takeaways & Evidence Grounding
- Erez Levin of Emet Advisory argues OpenAI search ads will not be a large revenue source.
- Levin estimates OpenAI’s ad revenue will be less than 10% of current search ad revenue, likely under 5%.
- The article suggests discounts may be the only scenario where ads add meaningful value in AI search or AI agents.
- The piece contrasts AI search with Google Search and references privacy-centric shifts by Apple/Safari.
Connected Companies & Entities
4 Entities mappedRelated Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
OpenAI Says No to Search Budgets — For Now
OpenAI has rolled out advertising features in ChatGPT — including an ads manager and cost-per-click (CPC) buying — but is asking marketers to treat it as a test and not to reallocate search budgets yet. OpenAI executives, including Asad Awan, say ChatGPT is a different environment than traditional search or discovery feeds and that early demand should come from mid/upper-funnel test dollars while conversion tracking and CPA bidding are still being built out. Advertisers and agencies report being steered to take spend from display or awareness activity rather than paid search. OpenAI partners with ad‑tech firms (e.g., Criteo) and is promising further measurement capabilities; the company is absorbing relevance risk by charging only on clicks while it improves relevance ranking. Industry watchers note the format is limited (small favicon + text) and that broader shifts to AI answers could affect publisher traffic and budgets over time.
OpenAI's Ad Revolution Claims vs Product Reality
The article examines OpenAI's emerging advertising business, arguing that the company's rhetoric about an 'intelligence economy' outpaces what advertisers can actually buy today. Current ad placements run in Free and Go ChatGPT tiers as labeled sponsored cards below chat answers, available via a self-serve Ads Manager on CPM, CPC and (recently) CPA pricing. Early metrics (CTR ~0.9–2%) and falling CPMs ($60 to ~$25) suggest novelty-driven demand and limited effectiveness; minimum buy-ins have fallen from $200k to as low as $10k. OpenAI relies on third-party adtech partners (Criteo, Adobe, StackAdapt, Pacvue, Kargo, LiveRamp) and has enticed The Trade Desk's Samantha Jacobson. Competitors like Perplexity and Anthropic have largely avoided or abandoned ads. Investor projections for large future ad revenue exist, but the author is skeptical and expects a modest, mid-sized channel rather than a new third pillar of digital advertising.
OpenAI vs. Google: Competing Visions for AI Advertising
OpenAI and Google revealed contrasting approaches for inserting advertising into AI-driven discovery. OpenAI (via a podcast with executive Assad Awan) is experimenting with conversational, clearly labeled sponsored responses inside ChatGPT that aim to feel like useful answers rather than traditional display ads; it emphasized label clarity, query relevance and a prohibition on using private conversation content for ad targeting. Google (via Vidhya Srinivasan’s 2026 roadmap letter) is embedding AI across its existing ad stack—Search, YouTube and Shopping—prioritizing commerce by combining AI Overviews with product feeds, predictive targeting and automation (e.g., Performance Max). The piece advises marketers to adapt creative for conversational formats, strengthen first-party and product-feed data, and prepare for evolving measurement and attribution as AI mediates discovery.
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