For more than two decades, a good part of digital marketing has revolved around a simple idea: capture attention at the moment of search. Keywords, bids, impressions, clicks. More clicks. Google became the marketplace where intent was declared and monetized.
Large Language Models (LLMs) like ChatGPT are rapidly disrupting that logic. And it’s exciting.
They don’t just answer queries. They participate in reasoning. And that changes where, when, and why brands can show up.
With OpenAI confirming in a detailed blog post that sponsored products and services will start appearing in ChatGPT responses on free plans, advertisers have now a chance to reach massive 800+ million weekly active users with hyper-targeted, AI-driven campaigns. And thus, a new question emerges for marketers:
Are LLMs just another ad placement - or something fundamentally different?
The short answer: different enough to rethink the funnel. For the long answer: keep reading 😉
What is ChatGPT advertising - and why it matters now
ChatGPT advertising refers to sponsored messages displayed within the ChatGPT experience, clearly labeled as such and shown only when they are relevant to the topic being discussed. Rather than interrupting the user mid-conversation, these messages are expected to appear at the end of a response, once the model has already provided its reasoning and answer.
In other words, ads don’t replace answers. They sit next to them - contextual, optional, and tied to the user’s expressed intent. This positioning alone marks a significant departure from most digital ad formats.
Today, ChatGPT ads are still at an early, experimental stage. OpenAI has announced initial tests on free plans in the US, while paid tiers remain ad-free. There is no open marketplace yet, no self-serve interface, and no public benchmarks. This is not a mature media channel - it’s a controlled rollout, designed to test how monetization can coexist with user trust.
What we do know is that ChatGPT advertising will not look like traditional display or search ads. There will be no keyword lists to manage, no ten blue links to compete against. Inventory will be limited, relevance will be strict, and creative will likely resemble concise, helpful recommendations rather than classic promotional copy. Pricing and auctions, when they arrive, are expected to reflect this scarcity - fewer placements, higher quality thresholds, and a stronger emphasis on context over volume.
The takeaway for marketers is simple: this is not about learning a new bidding system. It’s about understanding a new decision environment.
From keywords to conversations
Search advertising is built on explicit intent. Users type what they want, marketers bid on those words, and ads compete for attention.
LLMs work differently.
Users don’t just ask what to buy. They ask:
- What’s the best option for my situation?
- What are the trade-offs?
- What would you recommend if you were me?
These are not keyword queries. They’re contextual problems. Real world natural, flowing conversations.
Instead of matching strings of text, LLMs interpret meaning. Instead of returning a list of links, they return structured reasoning. And instead of interrupting the process, sponsored messages appear after that reasoning - at the very moment when clarity has already been built.
This brings the shift from search ads to reasoning ads.
A new moment in the funnel
Traditional funnels assume this sequence:
Awareness → Consideration → Search → Comparison → Conversion
LLMs compress this journey. A single conversation can educate the user, narrow options, eliminate complexity and surface a recommendation. The sequence changes:
Conversation → Recommendation → Validation → Action
By the time a sponsored message appears, the user is no longer exploring blindly. They are informed and mentally closer to a decision.
This matters because advertising effectiveness is less about visibility and more about momentum. LLMs create cognitive momentum. Users invest time, ask follow-ups, refine their thinking. A brand introduced at the end of that process doesn’t feel like an interruption - it feels like a continuation:
- Awareness may happen inside the conversation
- Consideration and comparison can be done in a single session
- The brand appears after the user feels informed
Why this is not “Google Ads with a chatbot UI”
It’s tempting to map LLM ads directly onto search ads. That would be a mistake.
Key differences:
- Intent formation vs. intent capture
Search reacts to intent that already exists. LLMs often help form it. - Sparse inventory
There won’t be ten sponsored results. Scarcity raises the bar for relevance. - Trust asymmetry
Users currently perceive LLMs as helpful and neutral. Any sponsored content must earn its place. - Meaning over mechanics
Keywords matter less than scenarios, use cases, and user context.
In other words: performance logic alone won’t work here. Brand logic returns to the foreground.
And this shift isn’t limited to ChatGPT - it’s where search itself is heading.
What kinds of brands benefit most
LLM environments naturally favor certain categories - particularly those where users seek guidance, comparison, or reassurance:
- Products with high perceived risk or complexity, not because LLMs actively push risky decisions, but because users look for clarity and reassurance - even in categories where recommendations may remain cautious or generalized due to regulatory or YMYL constraints.
- Categories with choice overload, where the primary value comes from helping users narrow options, compare trade-offs, and reduce cognitive effort rather than discovering new alternatives.
- Purchases where advice matters more than price, especially when users are optimizing for fit, quality, or confidence rather than hunting for the cheapest option.
Think finance, travel, electronics - but also everyday categories like FMCG where confusion is high and differentiation is unclear.
In these spaces, the winning brands won’t be the loudest. They’ll be the ones that are easy to explain, solve a clear problem and align naturally with the reasoning provided.
This is less about slogans and more about semantic clarity.
What marketers should be asking now
The announcement of ChatGPT sponsored answers raises an urgent question for brands: how can they be relevant in a reasoning-driven environment? Even while the ad format is still in trial, marketers should focus on ensuring that their brand is naturally recommendable. Sponsored visibility will not compensate for weak relevance. It will amplify strong positioning - or expose weak one.
At the same time, marketers should start thinking about what a ChatGPT ad campaign could look like. Even if we’re not starting any campaigns yet, it’s worth considering which messages, products, or use cases would make sense in a conversational, reasoning-driven context, and how sponsored recommendations could complement organic AI mentions. Planning now - aligning creative, messaging, and positioning with what LLMs naturally surface - will give brands a head start once the ad format becomes widely available.
LLMs reward clarity, context, and usefulness. Brands that provide structured, helpful information about their products, use cases, and value propositions are more likely to be surfaced both organically and when sponsored. For example, a coffee brand with clear flavor profiles, brewing guides, and pairing suggestions online will be more likely to appear in AI-generated comparisons than a competitor with generic descriptions.
This is where emerging practices like Generative Engine Optimization (GEO) become relevant. Not as a new SEO tactic, but as a way to make a brand’s expertise and unique propositions legible to systems that summarize, reason, and recommend. In a funnel increasingly shaped by AI reasoning, being recommendable matters before being promotable.
In practice, the questions brands should be asking now are strategic rather than technical:
- How do we want our brand to be reasoned about?
- What problems do we genuinely help solve?
- Are we visible in the knowledge layer LLMs draw from?
- How do paid and organic presence reinforce each other?
- What does success look like if clicks are no longer the primary KPI?
Focusing on these questions ensures that when LLM advertising becomes fully live, brands will already be positioned to benefit from the new environment, rather than trying to retrofit campaigns after the fact.
A new decision layer, not just a new channel
LLMs are not replacing search. They are adding a layer above it - a layer where decisions are shaped before they are executed. For brands, this means the opportunity is not just to appear, but to appear at the right cognitive moment.
And for marketers, it’s a reminder of something we may have temporarily forgotten: advertising works best when it respects how people actually think.
Reasoning ads don’t interrupt decisions. They join them. That’s not just a new placement. It’s a new mindset.
