ChatGPT ads work like this. You bid into what PPC Land describes as a "relevance-weighted, second-price mechanism" (PPC Land, 14 May 2026), so the winner is decided by bid and relevance together, and the winner pays a price derived from the next bid rather than their own. You can bid CPC, CPM or CPA, or hand it to an automated "Maximize results" strategy. There are no keywords anywhere. Targeting is a freeform box of context hints that OpenAI matches semantically against the meaning of the conversation happening right now. The ad renders below the answer, labelled as sponsored, usually once the person has spent a turn or two clarifying what they want. Only Free and Go tier users see them.
That is the mechanism. The rest of this guide is what each piece means when you are the one paying for it: how the auction treats relevance, what each bidding model actually controls, why targeting without keywords behaves so differently, where in a conversation ads land, what data OpenAI does and does not use, how attribution works after the click, and which advertisers this channel currently suits.
What kind of auction is this?
A relevance-weighted second-price auction, reported by PPC Land in May 2026 and repeated in its August coverage of automated bidding, which describes the mechanism as allowing the system to factor content relevance alongside price. OpenAI has not published an auction whitepaper, so treat this as reported rather than documented.
If you have run Google Ads, the shape is familiar. Relevance weighting means the highest bid does not automatically win, and a genuinely relevant ad can clear the auction at a lower price than a loosely relevant one bidding higher. Second-price means your max bid is a ceiling, not the price you pay.
Two practical consequences. First, raising your bid is the weakest lever you have. If your ad is losing, the relevance half of the equation is usually the problem. Second, there is nothing resembling a quality score exposed in the interface. One advertiser buying through a third party reported their reps describing "a context and landing page relevancy score impacting our impression share" (u/Trackavicious, r/PPC, 15 May 2026). That is one advertiser relaying what a rep said, not a published metric, so hold it loosely.
What can you bid on: CPC, CPM, CPA and automation
Four options exist as of 3 September 2026.
CPM. The original model. The pilot ran at a fixed $60 CPM, and $60 remains the default maximum bid for reach buys (PPC Land, 13 April 2026).
CPC. Turned on in April 2026, with OpenAI recommending starting bids of $3 to $5 per click (Digiday, 21 April 2026). This is the model most small advertisers should start on, because a manual max CPC is the only hard cost ceiling in the product.
CPA. Cost-per-action bidding was activated for selected US advertisers in late May 2026 (PPC Land, August 2026), and Digiday confirmed in June that the US supported CPM, CPC and CPA while the UK launched with CPM and CPC (Digiday, 19 June 2026). An oCPC variant for product feed campaigns followed in beta in August (Search Engine Roundtable, 7 August 2026).
Maximize results. An automated strategy that became preselected on eligible new ad groups in August 2026 (Search Engine Land, 24 August 2026). PPC Land is explicit that it "does not guarantee delivery against a specific CPA, CPC, ROAS, or other cost-efficiency target at this time". Budget is the only constraint. Whatever the auction produces is what you pay.
That default matters more than it sounds. A new advertiser who clicks through the setup without reading is now handing bid control to a system that promises nothing about cost.
How does targeting work without keywords?
There is no keyword targeting, no match types and no search terms report. What you get instead is a freeform text box at ad group level called context hints, in which you describe the conversations where your product is relevant. OpenAI matches those descriptions semantically against the live conversation.
In Europe, PPC Land lists the signals used in the initial selection as the current conversation topic, general location, device type, the ad's own landing page, title and copy, and the advertiser's context hints, with past chats and memories excluded (PPC Land, 15 August 2026). That list is the clearest public description of the matching inputs anywhere.
Three things follow. Your landing page is a targeting input, not just a destination, so a mismatch between hints and page hurts delivery as well as conversion rate. Broad hints drag you into adjacent conversations you would never have bid on. And because there is no query report, you cannot audit where you appeared, which makes one theme per ad group the only diagnostic you have.
Our method for writing the box is in write context hints as scenarios. Worth flagging the counter-evidence: John Horn tested a keyword list against conversational questions and reported the keyword ad group served far more often, with a slightly higher CTR and lower average CPC (Search Engine Land, 10 August 2026). One test, no conversion data. Run both.
Beyond hints you get geography, platform selection across iOS app, Android app and web (Search Engine Land, 24 August 2026), and uploaded custom audiences with a minimum of 25,000 matched users, in include or exclude mode (Search Engine Land, 10 August 2026). No lookalikes exist.
Where in the conversation does an ad appear?
Below the answer, labelled as sponsored, separate from the response, one placement per answer, per our ChatGPT ads skill, verified 26 August 2026. There is no video format.
The interesting part is when. Similarweb's panel measurement found 66.3 percent of ChatGPT ads appear after the second prompt or later, which fits OpenAI serving once intent is clear rather than on the opening question (PPC Land, 17 August 2026).
How often is genuinely contested. The same PPC Land report gives Similarweb measuring sponsored ads on 26 percent of ChatGPT responses to Free and Go users, on US desktop, in June 2026, with a measured CTR of 0.50 percent. Adthena, measuring in the same month, recorded 24.7 percent US ad frequency and 0.00 percent across 169,560 UK result scrapes. Two vendors, wildly different pictures, no independent standard. Quote the range, never a single number.
Operator-reported CTRs land in a similar band and vary by vertical. In one r/PPC thread: around 1 percent overall for a B2B SaaS advertiser in beta since March (u/Chanceee), 0.60 percent for an advertiser buying through a third party (u/Trackavicious), around 0.8 percent early on (u/Munalytics), and 2 percent rising to 3 to 4 percent after optimisation for another SaaS advertiser (u/Rubzje), all r/PPC, May 2026. These are self-reported and mostly on tiny samples.