Perplexity, the AI-powered search engine backed by Jeff Bezos, Tobi Lütke, and other notable investors, says it will begin experimenting with ads on its platform this week, starting with the US.
The ads will be formatted as “sponsored follow-up questions” such as “How can I use LinkedIn to enhance my job search?”
Brands participating in the ad program initially include Indeed, Whole Foods, Universal McCann, and PMG.
Perplexity wrote in a blog post:
“Advertising material will be clearly noted as ‘sponsored,' and answers to Sponsored Questions will still be generated by our technology, and not written or edited by the brands sponsoring the questions. We intentionally chose these formats because it integrates advertising in a way that still protects the utility, accuracy, and objectivity of answers.
While brands are keen on understanding how their companies appear in AI answer engines like ours, we will avoid duplicating the SEO industry where people are implementing arbitrary tactics to improve their rankings at the expense of user utility. We would rather give brands a transparent way to advertise through Perplexity that — rather than attempting to manipulate answers — encourages users to express their curiosity about a brand.”
Perplexity says that it needs to invest in building not just a “beloved product,” but a “robust and self-sustaining business” — which perhaps means that its Pro Subscription hasn't taken off as well as the company had hoped. Maybe users aren't quite ready to pay for web search yet?
The company actually addressed this in their blog post:
“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.”
Perplexity also noted that the ads will not change its commitment to maintaining a trusted service that provides direct, unbiased answers to questions, and that it'll never share its users personal information with advertisers.
I tried Perplexity a few months ago, and frankly I wasn't impressed, but that's not to say that I won't be in the future. The world needs competition in the online search space, which has become enshittified by Google, and I support the mission of Perplexity, OpenAI's web search project, You.com, and other search competitors. It'll just take a tremendous product to get people to overcome their two-decades-long habit of searching Google and switch over to a competing platform (myself included).
There is no “online search” without “AI” anymore. You won't see any non-AI search engine startups, and that's okay. Google is also moving towards AI generated results. It's where the industry is headed.
Now I'm just waiting for OpenAI to make a mobile operating system so we can have some real competition in the space! As long as Android sustains a +70% global mobile operating system market share, it'll be difficult to knock it off its search pedestal.
In other ads news… Meta will be launching ads on its Threads app as early as January 2025, according to a report by The Information, which is contrary to what Meta had previously announced. Threads hit 200M users this past August, which I would imagine means that the company has been itching to drive some ad revenue through it.