TLDR
OpenAI has published how ChatGPT decides which ad to show. An AI 'orchestrator' reads the conversation, pulls candidate ads and checks eligibility, but a separate auction sets the price and picks the winner, and the ad is dropped if it isn't ready when the answer is. OpenAI did not say how much each signal counts.
KEY TAKEAWAYS
What OpenAI published
OpenAI engineers Ritendra Datta and Karthik Gopalratnam have published how ChatGPT chooses its ads, in a post dated 21 October. The core design choice is separation: ad selection runs in its own service, apart from the system that writes the answer, so the ad cannot shape the response.[1]
How an ad gets picked
A post-trained language model OpenAI calls the orchestrator runs the process. It turns the conversation into short summaries and rewritten queries, converts those to embeddings and searches several indexes for candidate ads. It then filters for eligibility, including campaign status, targeting, policy, budget and pacing, and scores what is left on relevance, predicted engagement and past performance.[1]
The orchestrator nominates candidates but does not set the price or choose the winner. A separate auction applies admission thresholds, quality-adjusted ranking and pricing, and makes the final selection. After the auction, the orchestrator can still block an ad that feels wrong for the chat, and an ad that is not ready when the answer is gets dropped. "Returning no ad is an ordinary, successful outcome," the post says.[1]
Ad sessions remember context across turns and conversations. If a user chooses to personalise ads, the system can use nonsensitive information from past chats.[1]
What it doesn't say
OpenAI did not disclose how much weight each signal gets, so advertisers still cannot tell how much a higher bid helps against relevance. The post also gives no cost-per-acquisition or return-on-ad-spend benchmarks.[2] It does say ChatGPT Ads passed a US$1 billion annualised revenue run rate in under 200 days, and that more than 100,000 advertisers have run ads.[1]
What it means in Australia
ChatGPT Ads launched in Australia and New Zealand in March 2026, and thousands of local advertisers are now using it.[3] For them, the post confirms that a good bid is not enough: the ad has to match the conversation well enough to pass the orchestrator and the post-auction check, and it can still lose out to no ad at all.
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
How does ChatGPT choose which ad to show?
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James Dore is founder and editor of Prompt the Market and Strategy Director at Bushnote, a Sydney strategy, SEO and AI search agency. He has a background in strategy, media and financial services, and led consumer product marketing at MONEYME. He writes on AI search, answer engines, technology policy and media economics.
