Margin Points - Arnold Engel<br>July 21, 2026 · [Essay 130]<br>OpenAI's advertising audience<br>Advertisers don't know who uses ChatGPT and that's a problem for OpenAI.

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Who uses ChatGPT really matters<br>OpenAI has opened up the beta version of OpenAI ads, which are shown to users in ChatGPT. I tried out the ad product as an advertiser while two questions ran through my mind.

The first question—‘how am I reaching people?’—is straightforward for OpenAI to address. ChatGPT will iterate on different ad formats, recommendations, call-outs and creative ways to serve the ads through a huge range of tests. From an advertiser perspective, it’s not too much of a leap to imagine that OpenAI will improve this considerably and have some clean examples for advertisers to get grounded on. While the improvements might be slow, the distance to travel for OpenAI isn’t overly long. Advertisers expect there to be a learning period for the platform.

The bigger question that lingered—‘who am I reaching?’—is much more problematic for OpenAI. For an advertising business, the audience is a major factor for the profitability of the ads. The audience needs to be understandable and coherent to the advertiser and that’s where the underlying weaknesses are exposed for ChatGPT.

The other advertising platforms have clear audiences. Advertisers know who is on Facebook/Instagram because they can see people in their networks who are on those platforms. Likewise with X/Twitter. If you want to reach preteens and teens, Snap is a place to go as an advertiser.

Google benefited from an immediately clear answer to how it was reaching people back in 2000 when it rolled out ads. Google offered clear, repeatable placement. Yahoo was a bigger player at the time and had banner ads, so Google’s links seemed enlightened for high-intent searches. More significantly, advertisers knew that they were paying to reach some of the savviest web browsers at the time, who valued the page rankings and quality of the Google results page over the legacy search players.

Google didn’t have ‘Snapchat is for preteens and teens’ level clarity on demographics and target audience at the start of its ad rollouts—that doesn’t mean that OpenAI can get away with a similar muddiness. The indexing quality of Google’s competitors at the time wasn’t comparable, so there was real product daylight to bucket Google’s audience into a tech-forward crowd with double-digit market share. People who used Google early on appreciated the ease and convenience of great search.

OpenAI has real competition in AI chatbots while holding a 50% market share in the US.1 Are ChatGPT’s users primarily people who haven’t used Gemini or Claude? We know some tech-savvy people don’t use ChatGPT. Gemini gets a lot of Google replacers. Claude gets a lot of enterprise and developers. If ChatGPT’s audience starts to be defined as a residual, that becomes an impediment to ad dollars flowing. The story isn’t easy to visualize because there isn’t a clear demographic or obvious user base.

As I worked through the new OpenAI ads interface for advertisers, the current limitation for audiences was clear. Advertisers today can upload email and phone number lists to tell OpenAI who to put placements in front of. The initial work is all bring-you-own-audience. There aren’t the same types of tools to target your advertising based on demographics or interests or intent like on Facebook/Instagram or Google. OpenAI will surely add some interest and intent targeting, but it won’t give advertisers more certainty about who the ChatGPT users are.

Small businesses that might not have extensive market data and prospective emails and phone numbers will find the uploading limiting rather than enabling. SMBs were a major part of Google’s advertising growth story. Large advertisers like Best Buy have all of that data, so OpenAI didn’t feel any pinch of this issue during early trials. Brokers can chop it up and sell it to SMBs, but now advertising got much more complicated for the long tail. Uploading a list to advertise to is very legible—the advertiser knows exactly who the ads would be shown to. The list can also be transformed (as Meta does so adeptly) into a lookalike audience to reach more people like the targets.

If OpenAI can show advertisers like Best Buy how many prospective customers2 on the upload list are using ChatGPT this week, the advertisers will lean in. The information won’t answer the question of what type of user is on ChatGPT but it will provide comfort that the ads will reach a highly relevant audience. Without more of a sense of who the users are, advertisers might just have to ask another chatbot who can best help them reach their audiences.3

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