Perplexity AI to Introduce Ads in Search Results by Q4 2024

AI Search Startup Perplexity Dives Into Ad Game

Perplexity AI, a billion-dollar artificial intelligence search startup, is reportedly preparing to monetize its platform through ads in the fourth quarter. The move comes as AI-powered search engines increasingly influence eCommerce, potentially reshaping how consumers discover products and businesses allocate their marketing budgets in the digital marketplace. The startup's entry into advertising follows a meteoric rise. Perplexity reported millions of app downloads. This growth has attracted investor interest, with the company's valuation doubling to over $1 billion in an April funding round. Caitlin Halpert, vice president of growth at performance marketing agency Journey Further, told PYMNTS that platforms such as Perplexity could seamlessly integrate ads without compromising user experience. "I can see ads blending in nicely with how the platform works today," Halpert said, suggesting that ads could appear alongside source documents in Perplexity's interface. However, Halpert warned of potential difficulties. "The primary challenge will likely be ensuring users can clearly distinguish between ads and legitimate sources, maintaining the integrity of the search experience," she said. Introducing advertising on AI search platforms could reshape competition in the digital ad market. Halpert advised marketers to adapt their strategies, emphasizing the need to "prioritize earned media coverage and create content that deeply resonates with users, rather than merely optimizing for algorithms." The company's move into advertising represents a shift in the AI search landscape. Perplexity has gained popularity for its ability to provide concise, synthesized answers to user queries, a feature that sets it apart from traditional search engines. Yet the company's ascent has been subject to controversy. Major media outlets have accused the company of plagiarism, raising questions about content ownership and fair use in the AI era. The company has adjusted its citation practices and introduced a revenue-sharing model for publishers. Some industry experts drew parallels with existing search engines. "Ads inherently pollute the organic order of information, turning the search results into a carnival of distractions," CUDO Compute Chief Marketing Officer Lars Nyman told PYMNTS. "Google has been selling off objectivity for years, auctioning off the prime real estate at the top of your search results to the highest bidder, crudely speaking." Some observers said they see risks in the rise of AI search. "Once advertising becomes a revenue model, there is a risk that the platform might prioritize content that generates higher ad revenue over purely relevant or accurate results," Ross Kernez, founder of SEO consulting firm Rossk.com, told PYMNTS. The introduction of advertising to AI-powered search platforms also raises privacy concerns. "AI search platforms process and analyze vast amounts of data from user queries, which often include sensitive or personal information," Kernez said. "The introduction of targeted advertising introduces new privacy concerns, particularly around how this data might be used or shared." The data analysis could go deeper than traditional search engines. "Traditional search engines already infer user intent based on obvious data such as past searches and site visits, but can AI take this a step further; not just deducing that you're interested in buying a car, but also picking up on your anxiety about the environment, your preference for electric vehicles, and your penchant for weekend road trips," Nyman explained. Such insights could lead to what Nyman described as "hyper-targeted ads that feel almost intrusive like a salesman whispering in your ear about your deepest desires." The implications extend beyond simple search queries to potentially revealing intimate details about users' personalities and preferences. The entry of AI-powered platforms into the advertising market could also reshape the competitive landscape. "Traditional search engines and social media platforms will feel the heat as AI-driven platforms offer advertisers a more nuanced, precise way to reach consumers," Nyman predicted. Industry watchers expect a potential shift in marketing strategies. "If AI search platforms successfully capture a significant share of the advertising market, it could lead to a realignment of marketing budgets away from traditional search engines and social media toward these new platforms," Kernez said.

Perplexity AI plans to start running ads in fourth quarter as AI-assisted search gains popularity

Perplexity AI logo is seen in this illustration taken January 4, 2024. Perplexity AI, the artificial intelligence startup that's been embroiled in controversy due to accusations of plagiarizing content from media outlets, plans to start running ads on its search app in the fourth quarter, CNBC has learned. The company, which specializes in AI-assisted search, is circulating a pitch deck, promoting the app's reach and increasing usage. The company says its app has been downloaded more than 2 million times and has 230 million monthly users, while U.S. queries have increased eightfold in the past year, according to the presentation, which was viewed by CNBC. Perplexity raised new funding in April that valued the company at more than $1 billion, doubling its valuation from three months earlier. But the app's increasing popularity has highlighted concerns surrounding the ways the company surfaces content from other sources. Forbes reported in June that it found a plagiarized version of one of its stories on Perplexity with no reference to the media outlet other than a small "F" logo at the bottom of the page. Weeks later, Wired said it also found evidence of Perplexity plagiarizing Wired stories, and reported that an IP address "almost certainly linked to Perplexity and not listed in its public IP range" visited its parent company's websites more than 800 times in a three-month span. The company told CNBC that, following the allegations, it made changes to how Perplexity's Pages feature cites sources and also made updates so that its responses are better at citing outlets directly within the generated copy. Last month, Perplexity debuted a revenue sharing model, giving publishers an opportunity to make money through the company's search engine. Any time a user asks a question and Perplexity generates ad revenue from citing an article in its answer, Perplexity will share a percentage of that revenue with the publisher. Media outlets and content platforms including Fortune, Time, Entrepreneur, The Texas Tribune, Der Spiegel and WordPress were among the first to join the company's "Publishers Program." Dmitry Shevelenko, Perplexity's chief business officer, told CNBC in a July interview that if three articles from one publisher were used in one answer, the partner would receive "triple the revenue share." He said the company had been working on the feature since January and that its goal is to have 30 publishers enrolled by the end of the year. With advertising, Perplexity will follow a model called CPM, or cost per thousand impressions, according to a person familiar with the matter who asked not to be named because the details aren't public. CPM prices will be more than $50, the source said. Search marketing firm Semrush wrote in a blog post last year that display ads on desktop typically have CPMs of around $2.50, while mobile videos have rates of about $11.10. Perplexity said in its pitch deck that its key advertising categories initially would include topics like technology, health and pharmaceuticals, arts and entertainment, finance, and food and beverage. Advertisers will be able to sponsor "related questions" below answers and buy display ads to the right or a Perplexity-generated answer. According to the presentation, more than eight in 10 Perplexity users have an undergraduate degree, while three in 10 are in a "senior leadership position," and 65% are in "high-income white-collar professions," such as medicine, law and software engineering. AI-assisted search has been viewed by investors as one of Google's key risks, as it potentially changes the way consumers access information online. OpenAI, which started the generative AI craze in late 2022 with ChatGPT, introduced a search engine last month called SearchGPT. In May, Google launched "AI Overviews" in search, allowing users to see a quick summary of answers at the top of results.

Jeff Bezos-Backed Perplexity AI Gears Up To Integrate Ads In Search Results, Taking A Leaf Out Of Google's Playbook

Jeff Bezos-backed Perplexity AI is gearing up to integrate ads in search results, borrowing a leaf from search giant Alphabet Inc.'s Google that it is challenging. What Happened: According to a pitch deck circulated by the startup, the Perplexity AI app has been downloaded over two million times. It also handles over 230 million queries a month as U.S. queries have increased eightfold in the past year, reported CNBC. The startup's advertising model will follow a cost-per-thousand-impressions (CPM) approach, with CPM prices expected to exceed $50, the report noted, citing a source familiar with the matter. See Also: Amazon Web Services CEO Predicts AI Could Soon Dominate Coding: 'Being A Developer In 2025 May Be Different Than What It Was... In 2020' The company's initial advertising categories will include technology, health and pharmaceuticals, arts and entertainment, finance, and food and beverage. Advertisers will have the option to sponsor "related questions" beneath answers and purchase display ads next to a Perplexity-generated response, the report added. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Earlier this month, it was reported that Perplexity AI's revenue and usage have seen a 700% growth since the start of the year, following a new $250 million funding round. Google responded to Perplexity by launching "AI Overviews" in search, providing users with quick summaries of answers at the top of search results. ChatGPT-maker OpenAI also announced its entry in the search category by announcing a waitlisted prototype called SearchGPT. Perplexity has also faced backlash over its content-sourcing methods, with allegations of plagiarism being leveled against the AI startup. In June, Forbes and Wired reported instances of their content appearing on Perplexity without proper attribution. In response, Perplexity has made changes to its Pages feature and updated its responses to better cite sources. The company also introduced a revenue-sharing model last month, allowing publishers to earn from the company's search engine, the report noted. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Inside Google's Pixel And Android Superunit: Leaked Organization Chart Reveals Key Figures In Charge Of Taking On Apple's iPhone Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs

Perplexity AI to launch ads on search platform by fourth quarter

Nvidia and Jeff Bezos-backed Perplexity AI said on Thursday that it plans to introduce advertising on its artificial intelligence-powered search platform by the fourth quarter. Last month, the AI startup launched a program for publishers with an initial batch of partners, including TIME, Der Spiegel, and Fortune, in which it plans to share revenue from interactions where a publisher's content is referenced. Since ChatGPT first launched in November 2022, major search engines have been trying to integrate AI into web search, and analysts have viewed AI-assisted search as a threat to Google's dominant position in the industry ever since the AI boom started. Microsoft has adopted OpenAI technology for its Bing search engine through its early investment, while Google rolled out AI-powered summaries for the wider public at its developer conference in May. In April, Perplexity AI raised $62.7 million from existing investors such as Nvidia, and new investors including Garry Tan, CEO of Y Combinator, and Brad Gerstner, founder and CEO of Altimeter Capital. The fundraising round valued the company at more than $1 billion, doubling its valuation from three months earlier.

Perplexity AI to launch ads on search platform by fourth quarter

(Reuters) - Nvidia and Jeff Bezos-backed Perplexity AI said on Thursday that it plans to introduce advertising on its artificial intelligence-powered search platform by the fourth quarter. Last month, the AI startup launched a program for publishers with an initial batch of partners, including TIME, Der Spiegel, and Fortune, in which it plans to share revenue from interactions where a publisher's content is referenced. Since ChatGPT first launched in November 2022, major search engines have been trying to integrate AI into web search, and analysts have viewed AI-assisted search as a threat to Google's dominant position in the industry ever since the AI boom started. Microsoft has adopted OpenAI technology for its Bing search engine through its early investment, while Google rolled out AI-powered summaries for the wider public at its developer conference in May. In April, Perplexity AI raised $62.7 million from existing investors such as Nvidia, and new investors including Garry Tan, CEO of Y Combinator, and Brad Gerstner, founder and CEO of Altimeter Capital. The fundraising round valued the company at more than $1 billion, doubling its valuation from three months earlier. (Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid)

Perplexity AI to launch ads on search platform by fourth quarter

Nvidia and Jeff Bezos-backed Perplexity AI said on Thursday that it plans to introduce advertising on its artificial intelligence-powered search platform by the fourth quarter. Last month, the AI startup launched a program for publishers with an initial batch of partners, including TIME, Der Spiegel, and Fortune, in which it plans to share revenue from interactions where a publisher's content is referenced. Since ChatGPT first launched in November 2022, major search engines have been trying to integrate AI into web search, and analysts have viewed AI-assisted search as a threat to Google's dominant position in the industry ever since the AI boom started. Microsoft has adopted OpenAI technology for its Bing search engine through its early investment, while Google rolled out AI-powered summaries for the wider public at its developer conference in May. (Unravel the complexities of our digital world on The Interface podcast, where business leaders and scientists share insights that shape tomorrow's innovation. The Interface is also available on YouTube, Apple Podcasts and Spotify.) Perplexity AI under scrutiny over illegal web scraping In April, Perplexity AI raised $62.7 million from existing investors such as Nvidia, and new investors including Garry Tan, CEO of Y Combinator, and Brad Gerstner, founder and CEO of Altimeter Capital. The fundraising round valued the company at more than $1 billion, doubling its valuation from three months earlier. Read Comments

Perplexity Reportedly Plans Ads for AI Search App

The AI company is circulating a pitch deck, touting the reach and use of its app, which has been downloaded more than 2 million times and has 230 million monthly users, CNBC reported Thursday (Aug. 22), citing a presentation it saw. The company was valued at over $1 billion following a funding round in April, marking a two-fold increase in its valuation, per the report. PYMNTS explored the role of AI in search earlier this year, noting that observers stress the need to optimize for AI algorithms to maintain a competitive edge in the digital marketplace. "It's important for businesses to think of more than just pure on-page SEO optimization," Ben Poulton, founder of the SEO agency Intellar, told PYMNTS. "AI overviews tend to try and showcase the whole experience. That means additional content, more FAQs answered, customer feedback addressed on the page, details about walking distance and return policies for brands with a brick-and-mortar, all need to be readily available, as that will give you the best shot of being featured." AI is transforming the way people search the web and shop online, making for a more personalized and intuitive experience, the PYMNTS report said. "AI-powered search goes beyond simple keyword matching and can interpret the meaning and context of a query to locate the most useful information," said Arsalan Vossough, chief technology officer and co-founder of AI-driven wine search engine VinoVoss. By employing natural language processing, machine learning and user data, AI search tools can grasp complex queries and offer tailored results and recommendations. VinoVoss, for instance, can take a user's description of their ideal wine -- including price, taste profile and food pairing -- and produce the most relevant bottles. "The future of search will be defined by AI's ability to understand and anticipate user needs in ways that traditional keyword-based engines simply can't match," Vossough predicted.

Perplexity AI to launch ads on search platform by fourth quarter

Microsoft has adopted OpenAI technology for its Bing search engine through its early investment, while Google rolled out AI-powered summaries for the wider public at its developer conference in May. In April, Perplexity AI raised $62.7 million from existing investors such as Nvidia, and new investors including Garry Tan, CEO of Y Combinator, and Brad Gerstner, founder and CEO of Altimeter Capital. The fundraising round valued the company at more than $1 billion, doubling its valuation from three months earlier. (Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid)