Ads on Perplexity are here.
In a new blog post, the fast-growing Gen AI search engine announced it will begin testing ads this week in the U.S. In line with our reporting from September, ads will appear as sponsored follow-up questions alongside answers. See this example:
Notably, the sponsored questions will be AI-generated, not written by brands (will this be a brand safety issue?).
According to Perplexity, the company chose sponsored questions as their ad format “because it integrates advertising in a way that still protects the utility, accuracy, and objectivity of answers.”
Launch advertising partners include Whole Foods Market, Universal McCann, and PMG.
Why This Matters:
This is an entirely new approach to search-based advertising. Perplexity’s ads are not SEO-driven, with the company emphasizing it will “avoid duplicating the SEO industry where people are implementing arbitrary tactics to improve their rankings at the expense of user utility.” Ads will be contextual, and no end-user data will be shared with brands.
Perplexity also views its ad program as essential to its revenue-sharing arrangements with publishers. As noted in its blog, “Ad programs like this help us generate revenue to share with our publisher partners. Experience has taught us that subscriptions alone do not generate enough revenue to create a sustainable revenue-sharing program. Especially given how rapidly our publisher program is growing, advertising is the best way to ensure a steady and scalable revenue stream.”
Experts React:
Eric Seufert of Mobile Dev Memo had previously expressed skepticism about Perplexity’s model, highlighting potential challenges for search advertisers with a CPM approach.
He tweeted, “It strikes me as a hasty cash grab that may do more harm than good. Search advertisers don’t generally bid on CPM, so charging that way puts the onus of total performance measurement on advertisers.”
Our Take:
Perplexity is an impressive company that is building not only its tech very quickly but its path to revenue.
Which reminds us — when is Apple going to buy them? Just kidding! Or maybe Meta can get away with it in this new, likely very hands-off, regulatory environment.
