16th August 2025 - Raviteja Gullapalli

From Search Ads to Chat Ads: Will LLMs Carry Ads? (Deep Dive + Forecast)

TL;DR: Search monetized intent, YouTube monetized attention, and ChatGPT could monetize trust. The likely future: sponsored recommendations embedded into conversations. Here’s how it compares with Google Ads and YouTube, with some real-world examples i foresee from my experience.

Looking Back: The Evolution of Digital Ads

2000s – Intent Monetization (Google Search)

Google revolutionized ads by targeting explicit intent. If you searched “buy shoes,” advertisers bid for that keyword. High commercial intent meant high ROI, fueling Google’s ad empire.

2010s – Attention Monetization (YouTube & Social Media)

YouTube, Facebook, and Instagram shifted the model: instead of intent, they sold attention. Algorithms maximized watch time, and ads were inserted into streams — pre-rolls, mid-rolls, and influencer shoutouts.

2020s – Commerce Everywhere

Shopping surfaces integrated into almost every platform. Ads weren’t just banners; they became shoppable listings, video integrations, and dynamic recommendations.

Today: The Rise of Chat-first Interfaces

Users now ask ChatGPT or Bing Copilot for answers instead of searching Google. Instead of 10 blue links and ad slots, they get a synthesized conversational answer. This disrupts the traditional ad inventory model.

Current Footprint: Google Ads, YouTube, and ChatGPT

Google & YouTube

• Google Search Ads: Still the largest driver of digital ad revenue ($198B+ in 2024).
• YouTube Ads: ~$36B annually, monetizing user attention with video placements.

AI Answers with Ads

• Google AI Overviews: Ads are now shown inside AI-generated answers.
• Microsoft Bing/Copilot: Extends search ads into conversational chat answers.

ChatGPT (OpenAI)

• No ads in answers today — monetization is via subscriptions (Plus, Pro), enterprise licenses, and API usage.
• Leadership hasn’t ruled out ads in the future; experiments with “commerce in chat” are possible.

What “Chat Ads” Might Look Like

• Sponsored picks inside answers: A laptop query could include one promoted model with a discount.
• Shoppable snippets: Price + availability + quick buy link embedded in the response.
• Local services: “Dentist near me” returns one sponsored local clinic alongside recommendations.
• Cross-category nudges: Health, travel, or automotive assistants could suggest sponsored alternatives.

🚗 Example: Automotive Diagnostics in Chat

Today: If you type “My Tata Nexon engine is misfiring, what could be wrong?” into ChatGPT, it may guide you through checks like:

• Step 1: Inspect spark plugs.
• Step 2: Check ignition coils.
• Step 3: Verify fuel quality (E10 vs E20 compatibility).
• Step 4: Run OBD diagnostics.

Future (with ads): After giving you the diagnostic flow, the chat could add:

• “Sponsored: Visit Tata Motors Authorised Service Center – Bellandur for a same-day diagnostic and fix.”
• “Sponsored: Considering recurring ignition issues? Explore an upgrade to the Honda Elevate, designed for better ethanol compatibility.”

Just as Google search ads once linked you to car dealers, ChatGPT could directly influence your decision to book a service — or even switch manufacturers — inside the troubleshooting conversation.

Why Chat Ads Could Be More Influential

• Trust: Chat feels like a personal advisor, making sponsored nudges more persuasive.
• Scarcity: Only 1–2 ad slots per conversation flow, increasing value per placement.
• Contextual Fit: Answers can adapt to your specific problem, location, or budget.

Challenges & Regulations

Embedding ads inside advice raises ethical and legal concerns:

• FTC (US): Requires clear “Sponsored” labels for native ads.
• EU DSA: Requires transparency in targeting and political ad restrictions.
• Trust Risk: If ads blend too seamlessly, users may feel manipulated.

Comparison Table

Dimension	Google Search Ads	YouTube Ads	ChatGPT Ads (Future)
Unit	Keyword slot	Video pre/mid-roll	Sponsored recommendation
User State	Explicit intent	Passive attention	Active problem-solving
Inventory	Many per page	Several per video	1–2 per chat flow
Influence	High	Moderate	Very high (trusted advice)

Forecast: 2025 → 2030

1. Standardized ad formats: “Sponsored pick,” “Shoppable card,” “Local slot.”
2. High-value verticals first: Travel, healthcare, automotive, electronics.
3. Hybrid monetization: Subscriptions + ads + revenue share from transactions.
4. Regulation hardens: Assistant-specific rules on labeling and disclosure.

Final Take

Google Ads monetized intent, YouTube monetized attention, but ChatGPT is positioned to monetize trust. If ads arrive, they won’t be banners or pop-ups — they’ll be embedded recommendations inside conversations. That shift could make them the most influential ads yet, especially when users are troubleshooting real-world problems like their car, health, or travel plans.

Let me know your thoughts ;)