There is a common pattern with paid digital advertising channels. New platforms appear with opportunities for cheap ads. Over time, more and more advertisers start to use the platform. Supply and demand drives up the price per click. The platform owners also do everything they can to nudge click prices ever higher. Consequently ad prices rise until companies selling inexpensive products (like mine) can’t afford to bid high enough to get any clicks. But usually a new platform comes along and the dance starts again.

I’ve seen this play out over the 20 odd years that I have been using Google Adwords. In the early days I could get a decent number of clicks at an affordable price. But the price has risen now to the point where I get very few clicks for any price I am prepared to pay. I need a new advertising channel. I tried advertising on Reddit, but that was a resounding failure. I wondered if it might be worth advertising in the new hotness, ChatGPT. So I did some investigating. Here is what I have found out so far, from reading their documentation and other sources.

ChatGPT advertising is structured in a similar way to Google Adwords, with campaigns, ads, auction bids and conversion tracking. But, instead of matching keywords in search terms, you describe contexts in which your ads should appear. This should be less hassle than defining hundreds of search keywords. But it is hard to know how well targetted the ads will be or how well they will convert into sales. Some experimentation is required to answer that.

The ad format is fairly simple: name, headline, short description and small a image.

You can currently only advertise to customers on free plans based in USA, Canada, Australia and New Zealand.

In their own documentation, ChatGPT says: “Advertisers can set custom max bids for their CPC campaigns. We recommend a starting max bid of $3-5 USD per click.”. Yikes. I know they have massive costs to subsidize, but there is no way I can make a profit at $3 per click for my $99 data wrangling software Easy Data Transform. Given a typical 1% conversion rate I would be paying $300 per sale. However, bid recommendations are always very self serving, and can be taken with a large pinch of salt. It is likely that you can get clicks much cheaper. Especially given that there are currently relatively few advertisers compared to the number of users.

So far, so good.

The fly in the ointment is the minimum spend. $50k (down from $250k!). Ah. Maybe not. That minimum commitment may come down over time. But, by the time it is low enough for me to experiment, the bids will almost certainly be too expensive for it to be profitable to someone selling $99 software licenses. The search for affordable advertising channels continues.