Perplexity AI Plans for a New Era of Search Advertising

The AI Model, Perplexity, which specializes in AI-assisted Search, will introduce advertising to the AI model in Q4 of this year. The company is actively circulating a pitch deck to potential advertisers, showcasing impressive growth metrics and user engagement. In fact, Perplexity claims it has been downloaded over two million times and processes more than 230 million queries months. This represents an eightfold increase in U.S. queries over the past year, indicating significant traction in one of the world’s most competitive tech markets.

I’ve been saying for quite some time now that AI is challenging Google’s hold on Search. And, with OpenAI’s launch of Search GPT, AI-driven Search is growing rapidly. We already know GenZ prefers to Search in Instagram and TikTok more than Google. Gen Z is now known for turning to ChatGPT, CoPilot or Perplexity for their search queries instead of Google. And, for good reason!

Just the other day, my husband and I were wondering when Barack Obama was scheduled to speak at the DNC. I Googled it. The first two organic search results were behind a paywall. The next search result – where the headline was When Does Barack Obama Speak At the DNC – still didn’t give me the answer. I scrolled and scrolled through a very long article explaining who he was and mentioning his previous speeches, but I couldn’t get the answer! I asked ChatGPT and the AI immediately answered the question. This is a big part of why Google is losing its hold on traditional Search. Users want instant satisfaction and the traditional search engine doesn’t deliver as quickly as AI can.

Of course, Google’s AI Overviews or Search Generated Experiences, similarly aim to address this instant-answer need. But, it seems as if the brand may have some significant competition, especially from Perplexity.

Show Me the Money: How Perplexity’s Search Ads Will Work

With Perplexity’s plan, publishers won’t just be along for the ride – they actually get a slice of the pie. We’re talking a “double-digit percentage” of ad revenue when a brand’s content pops up in search results.

It seems several big brands are already on board as Time, Der Spiegel and Fortune have already joined the party with paid search in Perplexity.

But, wait, there’s more! Publishers aren’t just getting cash, they’re also getting some serious perks, including:

VIP Access: Free entry to Perplexity’s Enterprise Pro tier
Developer’s Paradise: Complimentary tools to play with Perplexity’s tech
AI Playground: Free access to Perplexity’s large language models via API
Pro For All: a year of Perplexity’s Pro service for every employee (talk about a company perk!)

What’s In It For Advertisers

Apart from meeting searchers where they increasingly are, Perplexity assures advertisers the opportunities are boundless, including:

“Related Follow-Up Questions” are available. Brands can sponsor these queries much like purchasing keywords so they appear just below the initial search answers.
Labeled content. All ads will be labeled on Perplexity as “sponsored content” to ensure transparency to the users.

Perplexity is growing fast, and it could become the next big thing in digital advertising. For consumers who’ve grown tired of Google’s monopoly on Search, this could be the fresh alternative we’ve all been waiting for.

AI-powered Search opens doors to exciting new ad formats and targeting possibilities that traditional search just can’t match.

As More People Use AI For Search, Companies Will Seek to Monetize Those Behaviors

The decision to monetize through advertising follows a successful funding round in April, which saw Perplexity’s valuation soar to over $1 billion – doubling its worth in just three months. This rapid ascent in the startup world has undoubtedly caught the attention of investors and industry watchers alike.

However, with increased visibility comes increased scrutiny. And, Perplexity has found itself at the center of a contentious debate about the ethics and legality of AI-generated content.

Perplexity’s Plagiarism Problem

The controversy erupted in June when Forbes reported discovering a plagiarized version of one of it’s articles on Perplexity’s platform. The reproduced content allegedly lacked proper attribution, with only a small “F” logo at the bottom of the page, indicating its source. This incident was not isolated, as Wired magazine also came forward with similar allegations. Wire’d investigation went further, claiming that an IP address, “almost certainly linked ot Perplexity” had accessed websites owned by Wired’s parent company over 800 times in a three-month period.

The accusations trike at the heart of ongoing concerns about how AI systems source and present information. The ability to rapidly aggregate and reformulate vast amounts of data raises concerns about copyright, fair use, and the future of content creation and distribution.

The Bigger Picture

Here’s the bottom line: AI Search is expensive to run. Companies like Perplexity need to find ways to keep the lights on and the servers humming. This program is their creative solution to building a sustainable business while keeping everyone happy – users, publishers, and advertisers, alike.

So, what do you think? Are we witnessing the birth of a new search advertising giant? Only time will tell, but one thing’s for sure – the world of online Search is about to get a whole lot more interesting!

Remember, AI won’t take your job. Someone who knows how to use AI will. Upskilling your team today, ensures success tomorrow. In-person and virtual training workshops are available. Or, schedule a session for a comprehensive AI Transformation strategic roadmap to ensure your marketing team utilizes the right GAI tech stack for your needs.