AI advertising is growing, but are businesses actually making money from it?
Artificial intelligence is changing how people find information, compare companies, and make purchasing decisions. And now that advertising has entered ChatGPT, businesses have another place to spend their marketing dollars.
But a new advertising platform doesn't automatically mean a better advertising opportunity.
Early research comparing ChatGPT advertising with Google Search ads raises an important question: Are businesses paying for access to AI users before those clicks are delivering meaningful returns?
For business owners, especially those in competitive industries like HVAC, plumbing, roofing, and electrical services, understanding the difference could save a considerable amount of marketing budget.
Let's look at what the research tells us, what it doesn't, and why AI visibility still deserves attention.
What Does the Research Say About ChatGPT Advertising?
A 2026 study by researchers Maximilian Kaiser and Christian Schulze examined advertising performance during ChatGPT's international advertising rollout.
The broader research analyzed traffic across 1,898 e-commerce websites, with a smaller group of advertisers providing data for direct paid advertising comparisons.
The findings showed a substantial performance gap between ChatGPT ads and traditional Google Search advertising.
In U.S. traffic:
- Google Search ads generated $2.45 in revenue per visit.
- ChatGPT ads generated $0.89 in revenue per visit.
- Google Search ads converted at 1.17%.
- ChatGPT ads converted at 0.37%.
That means ChatGPT advertising produced approximately 64% less revenue per visit in the study.
Among the 87 advertisers running both channels, 84 earned less revenue per ChatGPT ad visit than per Google Search ad visit.
These numbers are worth paying attention to, but they need context.
The research focused on e-commerce websites and tracked revenue attributed to website sessions. It did not establish that every industry will experience the same results, and it may not capture customers who return later to purchase.
Still, the findings highlight something businesses should have been asking long before AI advertising arrived.
Are we measuring advertising success by the attention we receive or by the business that attention generates?
Why Might Google Ads Convert Better Than ChatGPT Ads?
One possible explanation comes down to what the customer is trying to accomplish.
Think about how someone uses Google when they need an immediate solution.
A homeowner searches for "emergency AC repair near me."
They already have a problem. They need someone to fix it. They may be ready to call the first qualified company that can help.
Now consider someone using ChatGPT.
They might ask:
"Why is my air conditioner running but not cooling my house?"
That homeowner could be gathering information, comparing possible causes, or deciding whether a professional repair is necessary.
Both people could eventually become paying customers, but they are not necessarily at the same stage of the buying process.
Google Search ads frequently target people expressing direct purchasing intent. ChatGPT conversations can involve research, education, comparisons, and problem-solving before a purchase decision is made.
That difference may help explain why a paid click from one platform doesn't necessarily deliver the same immediate revenue as a click from another.
It doesn't mean AI users have no commercial value.
It means businesses need to understand where AI fits into the customer journey before assigning a value to the click.
Are ChatGPT Ads Worth the Cost?
That depends on what the business pays and what those visits produce.
One of the more interesting findings in the research was the estimated advertising cost required for ChatGPT to match Google Search's return on ad spend.
Using the study's assumptions and observed performance, researchers calculated an approximate break-even comparison of $0.26 per ChatGPT ad click.
That was not a universal recommended bid. It was an estimate based on the performance and costs of advertisers in the study.
A publicly reported advertiser had paid $1.72 per click, considerably higher than that benchmark.
For businesses, the lesson is straightforward.
A lower-performing advertising channel can still be worthwhile if the cost of acquiring a customer makes financial sense.
Likewise, an inexpensive click isn't a bargain if it never becomes a qualified lead or sale.
Before expanding an AI advertising budget, businesses should understand their cost per lead, cost per acquired customer, conversion rate, and actual revenue generated.
For contractors, that means going beyond website visits and tracking booked appointments, completed jobs, and revenue whenever possible.
A report showing hundreds of AI ad clicks might look impressive.
But if those clicks don't produce customers, what exactly did the business purchase?
AI Advertising and Organic AI Recommendations Are Not the Same Thing
This is where the conversation gets especially interesting.
Businesses often hear about AI search visibility and assume it all works the same way.
It doesn't.
Paid AI advertising involves purchasing ad placement within an AI-powered experience.
Organic AI visibility involves a business appearing in AI-generated answers, recommendations, or cited sources without purchasing that particular placement.
And even within organic visibility, there's another distinction worth understanding.
Being cited as an information source is not necessarily the same as being recommended as a company to hire.
For example, ChatGPT might reference an HVAC company's educational article when explaining how heat pumps work.
That's useful visibility.
But when a homeowner asks which HVAC contractor serves their city, being named as a company to consider is a different opportunity.
One demonstrates that the company's information was useful to an answer. The other places the business into the customer's consideration process.
Neither automatically guarantees a sale, and neither can be secured simply by adding a special file or a few keywords to a website.
Businesses need accurate service information, helpful content, a technically sound website, consistent business details, and credible signals from sources beyond their own websites.
The goal isn't just to appear somewhere in an AI answer.
It's to become a credible option when someone is deciding who to hire.
Could AI Advertising Affect Organic ChatGPT Traffic?
The researchers also investigated whether the introduction of advertising changed the number of unpaid visits websites received from ChatGPT.
Their initial analysis estimated a 5.9% reduction in organic ChatGPT referrals during the first 13 weeks after advertising launched, compared with the study's control conditions.
However, that initial estimate was not statistically significant.
When the researchers adjusted for differences in regional ChatGPT adoption, the estimated decrease was approximately 7.2% to 8.4%, with statistically significant results under those assumptions.
That distinction matters.
The research suggests advertising may affect unpaid referral traffic, but it does not establish that every website will lose organic AI traffic or that paid placements directly replace specific organic recommendations.
It also found no detectable change in the conversion rate of organic ChatGPT visitors who still reached those websites.
For marketers, this is another reason to monitor AI search performance over time rather than reacting to a single report or screenshot.
As AI platforms evolve, businesses need to watch how frequently they appear, whether those appearances lead to visits, and whether those visits produce meaningful outcomes.
What Does This Mean for HVAC, Plumbing, Roofing, and Other Contractors?
Home service companies should pay particular attention to these developments, but they shouldn't assume e-commerce advertising results will translate directly into local service businesses.
Contractors operate in a different buying environment.
A homeowner looking for emergency plumbing repair may have an immediate need. Someone researching the cost of replacing a furnace might spend several weeks comparing options.
That creates opportunities for both traditional search and AI-powered discovery.
Consider three situations.
An emergency repair: A homeowner needs a plumber immediately. Google Search, Google Maps, and Local Services Ads may be especially important because the customer is ready to contact someone.
A major equipment replacement: A homeowner is comparing heat pump systems, financing options, efficiency ratings, and local installation companies. AI-powered research may influence which businesses they investigate.
A routine maintenance decision: A homeowner asks whether annual HVAC maintenance is necessary. A helpful answer could introduce them to a contractor before they begin actively searching for an appointment.
These are different customer needs, and they shouldn't all be measured the same way.
The contractor's job is to be discoverable, credible, and easy to contact when the homeowner is ready to act.
That requires more than buying another advertising placement.
It requires a marketing foundation that connects visibility to actual business results.
How Should Businesses Approach AI Advertising Right Now?
The research doesn't suggest businesses should ignore ChatGPT advertising.
It suggests they should approach it with realistic expectations.
For companies considering AI ads, there are several practical priorities.
1. Protect the Channels Already Generating Revenue
If Google Ads, Local Services Ads, or organic search are consistently producing profitable jobs, don't move budget away from them simply because a newer platform is attracting attention.
Evaluate new opportunities without disrupting proven acquisition channels.
2. Start With a Controlled Test
Rather than committing a large budget, establish a limited test with clearly defined goals.
Track the quality of visits, leads, conversions, and sales. Where possible, compare results with established advertising channels using consistent attribution methods.
3. Measure More Than Clicks
Traffic alone is not a business outcome.
For a contractor, the more useful questions are:
- How many qualified calls or form submissions came from the campaign?
- How many appointments were booked?
- How many jobs were completed?
- What revenue and profit did those jobs generate?
- What did it cost to acquire each customer?
Those answers provide a much clearer picture of advertising value.
4. Continue Building Organic AI Visibility
Paid advertising and organic AI recommendations serve different purposes.
Even if a company decides ChatGPT ads aren't worth the investment today, it can still work toward becoming more visible in AI-generated answers.
That means improving its website, creating useful service and location content, maintaining accurate business profiles, earning authentic customer reviews, and building credibility across relevant sources.
Businesses should also test realistic customer questions in AI platforms and monitor whether they are being mentioned, cited, or recommended.
5. Make Sure the Website Can Convert the Traffic
This part is easy to overlook.
Even a perfectly targeted ad can underperform if it sends visitors to a slow, confusing website.
A homeowner shouldn't have to search for the phone number, guess whether the company serves their city, or click through multiple pages to request service.
Before purchasing more traffic, make sure the website is ready to turn that traffic into customers.
Is AI Search Replacing Google Ads?
Not based on this research.
Google Search advertising remains an established channel for reaching people who are actively searching for products and services.
AI-powered platforms are creating additional opportunities for businesses to reach customers during research and decision-making.
But those opportunities don't necessarily replace existing channels.
A homeowner might ask ChatGPT about heat pump replacement costs, look at local reviews on Google, visit two contractor websites, and eventually call a company they remember seeing earlier.
Which interaction deserves credit?
That's becoming one of the more complicated questions in modern marketing.
Businesses need to consider the entire customer journey instead of assuming the last click tells the whole story.
Frequently Asked Questions About ChatGPT Ads
Do ChatGPT ads convert better than Google Ads?
Not in the cited 2026 e-commerce study. Google Search ads produced higher conversion rates and more revenue per visit. Results may differ by industry, campaign, and customer intent.
How much do ChatGPT ads cost?
Advertising costs vary by campaign and buying arrangements. The researchers estimated that approximately $0.26 per ChatGPT click would have matched Google Search's return on ad spend for their comparison sample. That figure is not a standard platform price.
Should small businesses advertise on ChatGPT?
Small businesses should evaluate AI advertising based on their goals, available budget, and ability to track conversions. A limited test may be reasonable, but established profitable marketing channels should not be abandoned without supporting evidence.
Can businesses appear in ChatGPT without paying for ads?
Yes. Businesses may appear in AI-generated responses and recommendations without buying advertisements. Those appearances are not guaranteed and depend on the information and sources available to the AI system.
Is AI search optimization different from traditional SEO?
AI search optimization builds on many traditional SEO fundamentals, including useful content, technical accessibility, and business credibility. It also places additional emphasis on understanding how AI systems reference information, identify businesses, and generate recommendations.
The Bottom Line: Don't Confuse New Advertising Opportunities With Better Results
ChatGPT advertising represents a significant development in digital marketing.
But the early research offers an important reminder.
A new platform can attract enormous attention without immediately delivering the same financial results as an established advertising channel.
That doesn't make AI advertising irrelevant. It means businesses need to test its value rather than assume it.
For contractors and other service businesses, the smarter approach is to maintain strong visibility across traditional search, continue developing organic AI visibility, and evaluate paid AI advertising using real business outcomes.
The platforms customers use will continue to change.
The fundamentals of a successful business won't.
Getting found matters. Getting recommended matters. But getting chosen, and turning that choice into revenue, is what ultimately counts.
Research reference: This article discusses findings from Maximilian Kaiser and Christian Schulze's October 2026 working paper, Can Advertising Fund Free AI? Evidence from ChatGPT's International Advertising Rollout. The findings were also reported by Danny Goodwin in Search Engine Land on November 2, 2026. Original research: https://ecommerceresearch.org/chatgpt-ads/
