Claiming the first-movers advantage in ChatGPT ads
When ChatGPT Ads launched in the US, we saw an opportunity to test a completely new advertising channel before competition increased.
Three of our clients were eager to get started. After launching our first campaigns at the end of June, we quickly saw promising results but also something important: ChatGPT Ads behave very differently from Google Search.
“We like the additional cheap traffic coming from ChatGPT which is surprisingly well converting.” ~ US advertiser in B2B
Google users typically enter relatively short search queries, while ChatGPT users can describe a need, ask a question or explain an entire situation in a single prompt.
This meant we couldn't simply copy our existing Google Ads approach.
Challenge
The challenge was adapting our existing performance marketing expertise to a completely new type of search behaviour.
ChatGPT Ads was still in an early stage, with campaign controls and optimisation capabilities evolving quickly. At the same time, traditional keyword-based thinking didn't translate directly to a conversational platform.
Instead of keywords, OpenAI uses Context Hints to help determine when an ad is relevant to a conversation.
Question:
How can we use what already works in Google Ads while adapting to how people actually use ChatGPT?
Case
We focused on three areas:
A) Adapting Google Search insights
Rather than copying our entire keyword structure, we used high-performing long-tail search terms from Google as a starting point for developing relevant Context Hints.
This allowed us to take existing insights about customer intent and translate them into ChatGPT's conversational environment.
B) Prioritising proven products
For ecommerce advertisers, we quickly noticed that products performing strongly in Google Ads were also strong candidates for ChatGPT Ads.
Through our Flowboost app and Product Labelizer, we already identify products based on their advertising performance. We connected this data with our ChatGPT Ads approach, allowing advertisers to bring proven product insights into a new channel.
C) Optimising for business outcomes
The initial results showed extremely cheap traffic, but also a lower conversion rate.
Instead of focusing on CPC alone, we evaluated the channel based on conversions and CPA to understand whether ChatGPT could complement existing Google Search activity.
ChatGPT Ads on Flowboost
Push your bestsellers directly to ChatGPT Ads:
Create an account in just a few clicks.
Link Google Ads and ChatGPT Ads directly to Flowboost.
View all your performance metrics and data in one place.
Approve automatic campaign suggestions to launch.
Let Flowboost optimise your budgets and bids.
Results
After the first two months, the results were above our expectations for such a new advertising channel.
Across the accounts we analysed, ChatGPT Ads delivered;
+6% Conversions
-10% CPA
-65% CPC
+80% Impressions
-55% Conversion rate
-95% CPM
The most interesting finding wasn't the cheap traffic.
Clicks were 65% cheaper, but also converted at a 55% lower rate than comparable Google Search activity. Despite this, the additional volume resulted in more conversions at a lower average CPA.
We also see conversions attributed to ChatGPT Ads that are not captured by our existing Google Search and social campaigns. While this indicates potential incremental value, we do not consider these statistically proven incremental conversions without a controlled incrementality test.
ChatGPT Ads should not be treated as Google Ads 2.0.
The user behaviour is fundamentally different, so advertisers need to adapt their campaign structure and targeting accordingly.
At the same time, the early economics are difficult to ignore. Competition is currently relatively low, resulting in significantly cheaper clicks and impressions, while the platform is already generating additional conversions for the accounts we analysed.
For us, ChatGPT Ads is therefore not a replacement for Google Search, but an additional performance channel worth testing early.
With the platform now expanding into Europe and its advertising capabilities continuing to develop, we expect both competition and performance to evolve.
The advertisers that combine their existing Google Ads learnings with a strategy built specifically for conversational search will be best positioned to benefit.
Start with ChatGPT Ads today:
Ready to tap into the potential of ChatGPT? Signup to the Flowboost app and create your first campaign on the click of a button or reach out to floris@flowboost.com.
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