An analyst team from RBC Capital Markets has released a report stating that OpenAI's plan to introduce ads to all free users of its ChatGPT application demonstrates a "significantly suppressed demand for advertising placements." The report indicates that OpenAI has officially confirmed it will roll out ads to all free users in the US market for its massively popular AI application, which boasts 900 million weekly active users globally. This move comes just about a month after the AI unicard began its pilot advertising program, suggesting that global advertisers indeed have substantial, pent-up demand for ad placements driven by transformative AI technology.
OpenAI's adoption of an advertising model acts as a major catalyst for the GEO model, a new concept and investment theme recently gaining traction in global stock markets. It is set to fuel the rise of an "answer-based economy" centered around AI-generated responses and spearhead a new wave of brand traffic revolution. Introducing ads to all free ChatGPT users aligns with the core commercial direction emphasized by the GEO model: having products prioritized or featured within the search or answer results generated by AI chatbots. The emergence of the GEO model signals a shift in brand competition focus from traditional search engine results pages to the AI-generated answers themselves.
The integration of ads into the ChatGPT platform strengthens the trend of commercial expansion for generative AI platforms. This trend is consistent with the logic of the Generative Engine Optimization (GEO) mechanism regarding brand visibility and commercial exposure, which is likely to stimulate market attention and investment enthusiasm for GEO-related investment sectors.
RBC Capital Markets analysts, led by senior analyst Brad Erickson, wrote in a client report, "There is clearly pent-up demand for new digital advertising models dominated by OpenAI's technology. We continue to believe everything will evolve gradually. Specifically, we think a fundamental disruption of digital ad spend will only occur when measuring upstream ChatGPT funnel activity can expose potential inequities in Google's click attribution, which might be unfairly claiming credit for conversions influenced elsewhere. Recent negative comments from Walmart regarding poor conversion performance on the ChatGPT platform also highlight the attribution challenges facing OpenAI."
Last month, OpenAI announced it would begin testing ads with adult, logged-in users on the Free and Go subscription tiers of ChatGPT. In the US market, ChatGPT Go is priced at $8 per month, compared to $20 per month for ChatGPT Plus and $200 per month for ChatGPT Pro.
Analyst Erickson further noted that Walmart's decision to forgo in-platform checkout on ChatGPT in favor of using a major external application, coupled with statements from Google regarding its new AI Overview and GEO-style ad model, suggests that no company has yet "demonstrated a sufficiently robust and increasingly strong advertising experience and efficiency within an AI chatbot."
Despite this, Erickson's team firmly believes that OpenAI's move to introduce ads for all free users underscores pent-up advertising demand and could have broader implications. The analysts added, "A bullish assumption for OpenAI would be that Google, leveraging superior reporting capabilities and AI technology, is attributing significant click traffic, originating from research conducted in ChatGPT's upstream funnel, to itself. The Walmart case is intriguing because, although ChatGPT's conversion rates were lower than Google's and other affiliate channels, it's unclear if Walmart can dissect Google's reports to isolate important upstream research activities that should be partially credited to ChatGPT. In our view, this is a key hurdle for the eventual success of OpenAI's advertising business, as ChatGPT's unique user experience and the lack of a deeper digital ad ecosystem in cutting-edge AI applications may prevent it from quickly proving its value to advertisers, especially if in-platform commerce isn't viable for potential advertisers."
Therefore, the RBC analyst team suggests that many users might conduct "upper-funnel research" within ChatGPT—such as learning about products, comparing brands, and narrowing choices—but ultimately click ads, perform searches, and complete purchases on Google or other platforms. This means the "credit" for the final conversion is easily claimed by Google, while ChatGPT, despite influencing user decisions, struggles to receive quantifiable attribution credit. If ChatGPT primarily influences early-stage research but cannot create a clear data chain like Google's "see ad -> click -> purchase" model, advertisers will likely continue allocating budgets to platforms where ROI is easier to measure. The Walmart example illustrates this point.
RBC maintains an "Outperform" rating on Alphabet, Google's parent company, with a 12-month price target of $300, implying a cautious outlook on its near-term stock price prospects. Alphabet's stock closed at $302.06 on Monday, down approximately 3% year-to-date.
In a related development, reports on Monday indicated that OpenAI has hired David Dugan, a former top digital advertising executive at Meta Platforms, as its Vice President of Global Advertising Solutions. This move signals ChatGPT's ambition to evolve from a "high-frequency AI tool" into a "formal, budgetable traffic scenario for advertisers." OpenAI's CEO of application business, Fidji Simo, has been seeking a candidate for months to oversee the company's AI commercialization efforts, with the new GEO-style advertising model being a crucial monetization path.
As ChatGPT prominently integrates advertising, the GEO model receives a significant catalyst. OpenAI's embrace of advertising acts as a major boost for GEO, a new investment theme. As AI applications like ChatGPT and Gemini gain global popularity, advertising logic is being reshaped: increasingly advanced AI models may render traditional "click-to-search" less effective, accelerating the shift towards the GEO model. The core of GEO is making content more easily retrievable and citable by AI models through information structuring, data specification, authoritative sourcing, and alignment with Retrieval-Augmented Generation (RAG) mechanisms. Consequently, brands will future compete not for "ranking" but for "being cited by AI models," marking the beginning of the battle for AI "answer traffic."
The appearance of ads on generative AI platforms shifts the path to commercial exposure from "passive search" to "passive answering + ad display." In this model, brands and marketers will prioritize how to get "more frequently cited/recommended by generative AI" on platforms like ChatGPT, which is the core objective of GEO. If large-scale AI model commercialization expands, marketing budgets and strategies will increasingly migrate to the new advertising ecosystem centered on AI-generated results as the entry point. This could lead to GEO, as a technology/service, attracting greater attention and substantial investment from financial markets.
For commercial advertising models, it is undeniable that GEO is becoming the traffic gateway and essential marketing survival rule in the "AI + search" era. As generative AI technology, centered around ChatGPT, becomes a new entry point for user search and information retrieval, brands, advertisers, and marketing agencies are investing heavily in GEO strategies to compete for "AI answer visibility" within the AI application ecosystem, effectively creating a new optimization赛道 for advertising and content.
OpenAI's introduction of ads is fully consistent with the broader market logic of GEO, which leverages artificial intelligence for larger-scale commercialization. One motivation for OpenAI's ad model is the need for more stable and diversified revenue streams to support massive investments in AI computing infrastructure and high R&D costs, especially under competitive pressure from Google's Gemini. With over 900 million weekly active users, ChatGPT represents a prime "high-frequency entry point" for ad display and commercialization.
GEO is a specialized optimization strategy for generative AI platforms like ChatGPT, Gemini, and Claude. Its core goal is to make brands, products, or services more frequently cited or recommended within AI-generated answers, thereby enhancing visibility and commercial opportunities. This is not traditional Search Engine Optimization for ranking, but an optimization method aimed at getting large language models to "actively mention" certain content when generating answers. ChatGPT's high-profile integration of ads sends a clear message to the market: the GEO model is poised to fundamentally rewrite advertiser budget allocation and elevate the value of the "answer layer" as a critical entry point.