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Conversational AI search engine Perplexity AI is moving into the online ads business. The company plans to monetize its platform through online ads in Q4. According to reports, Perplexity has circulated a pitch deck that reveals its advertising plans and touts its reach. The pitch deck revealed that the company could charge advertisers $50 per 1,000 impressions.
Chasing Google: Perplexity’s Quest for Search Supremacy
Perplexity processes more than 230 million queries globally monthly, with US queries increasing eightfold in the past year, according to reports. While these numbers are substantial, they are still far from Google’s 2 trillion search queries annually (166 billion monthly).
The world has changed a lot in the last decade…has your search engine? pic.twitter.com/6IsY07YTTh
— Perplexity (@perplexity_ai) August 21, 2024
The company expects to launch ads in “15 key categories,” including Finance, Health, Technology, and Arts and Entertainment. Advertisers will be able to buy ad spots in the “related questions” category, right below answers and to the right of the Perplexity-generated answer.
Building on this, Perplexity plans to offer users personalized ad experiences, which it claims will lead to tailored ads that suit user interests and behavior.
Perplexity will start selling search ads in Q4 and “CPM prices will be more than $50.”
I’m confused by the price and the CPM model vs CPC? Search people, what do you think? https://t.co/9msO6ZZnVc pic.twitter.com/SlHSBBUrge
— Chris Harihar (@ChrisHarihar) August 22, 2024
Last month, the company launched the “Publishers Program,” allowing publishers to earn a piece of ad revenue every time their content is referenced in an interaction on their platform. The pilot program has initial partners, including TIME and Fortune.
How Perplexity Is Redefining AI Search
Perplexity is a billion-dollar AI startup with investments from Jeff Bezos and Nvidia. It has grown in recent months and gained popularity for its AI-powered search engine and ability to generate concise, synthesized outputs for user queries.
However, the company has also faced criticisms about how it scrapes data used to train its AI models.
Despite these challenges, Perplexity’s engine has distinguished it from traditional search engines, as the platform is better able to provide users with easily digestible information in a conversational format.
SearchGPT, the future of browsing?
My thoughts: Google Search is definitely in trouble because Perplexity is already winning (= validated use case)
People don't want links and ads, they want answers to their questions.
Agree? pic.twitter.com/YznI9f6s3p
— Alex Northstar (@NorthstarBrain) July 26, 2024
Integrating ads into generative AI products could provide new revenue streams for the company and potentially disrupt the search engine market. AI-assisted search is one of the critical risks to Google search as a business, potentially changing how consumers access information. Advancements in these new divisions could also affect how marketers allocate their ad budget.
Other AI companies are also ramping up their AI-powered search engines. Last month, OpenAI announced plans for its SearchGPT, while Google integrated “AI Overview” into search results, providing users with a quick summary of the top answers.
However, experts warn that once AI companies start seeing advertising as a revenue model, there’s a risk of prioritizing ad revenue over relevant or accurate results. There are also privacy concerns, as AI companies process and analyze vast amounts of data from user queries. Introducing targeted ads could make users feel hyper-targeted or view these platforms as intrusive.
