Perplexity begins experimenting with ads on its platform
This move, according to the company, comes as it seeks revenue growth amid legal and competitive pressures
Perplexity, an AI-powered search engine known for its conversational and AI-generated answers, is taking a step toward monetization by introducing ads on its platform.
Starting this week, U.S. users will encounter “sponsored follow-up questions” that appear alongside search results, marked clearly as “sponsored” to distinguish them from the main AI-driven answers. These ad placements will come from partners like Indeed, Whole Foods, and Universal McCann, representing Perplexity’s initial group of advertisers.
This move reflects Perplexity’s growing need for additional revenue sources. In a recent blog post, the AI company emphasized that its existing subscription service, Perplexity Pro, which costs $20 per month or $200 per year, isn’t sufficient to support the platform’s ambitions and its growing revenue-sharing program with publishers.
Perplexity states that ad revenue could provide a stable foundation to fund its mission and maintain its platform, especially as it reportedly finalizes a $500 million funding round at a $9 billion valuation.
Unlike traditional ads, Perplexity claims its ads are formatted as additional questions that may inspire users to explore related topics, such as “How can I use LinkedIn to enhance my job search?”
Perplexity further asserts that these ads will not impact the objectivity of answers generated by its AI– meaning advertisers have no influence over the content of responses. Additionally, Perplexity confirmed that user data will not be shared with advertisers, signalling its focus on maintaining user privacy.
Meanwhile, this decision to integrate ads contrasts with competitors’ approaches. OpenAI, a key rival in the AI search space, has opted not to monetize ChatGPT Search with ads, relying solely on its subscription model. Google, too has been cautious, introducing ads selectively within its 'AI Overviews' feature only to mobile users in specific regions.
However, Perplexity’s ad integration comes amid copyright disputes that could affect its appeal to advertisers. The company has been accused by publishers like Dow Jones and The New York Times of replicating their content without proper compensation, leading to lawsuits and cease-and-desist orders.
While Perplexity says it has updated its citation practices in response, these legal challenges may complicate its efforts to attract new advertisers and could affect its future ad strategy.
With this advertising initiative, Perplexity is navigating the delicate balance of monetizing an AI platform while trying to preserve user trust and meet rising financial expectations.
This experiment in AI-powered advertising further highlights the challenges and complexities of revenue generation in a competitive and rapidly evolving industry. Whether Perplexity’s approach succeeds may influence how other AI-driven search engines pursue monetization.
Emmanuel Oyedeji
