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Generative AI search engine Perplexity, which claims to be a Google competitor and recently snagged a $73.6 million Series B funding from investors like Jeff Bezos, is going to start selling ads, the company told ADWEEK.
Perplexity uses AI to answer users’ questions, based on web sources. It incorporates videos and images in the response and even data from partners like Yelp. Perplexity also links sources in the response while suggesting related questions users might want to ask.
These related questions, which account for 40% of Perplexity’s queries, are where the company will start introducing native ads, by letting brands influence these questions, said company chief business officer Dmitry Shevelenko.
When a user delves deeper into a topic, the AI search engine might offer organic and brand-sponsored questions.
Perplexity will launch this in the upcoming quarters, but Shevelenko declined to disclose more specifics.
While Perplexity touts on its site that search should be “free from the influence of advertising-driven models,” advertising was always in the cards for the company.
“Advertising was always part of how we’re going to build a great business,” said Shevelenko.
The year-old search engine was founded by AI researchers from Meta and OpenAI, and is powered by both OpenAI’s GPT model and its proprietary AI model. It currently charges a $20 monthly subscription fee.
Perplexity will have a lot to prove
Advertisers think the native units are a smart format for Perplexity’s AI search engine.
“It’s an ad format that doesn’t disrupt the core flow of the platform,” said Jeremy Hull, chief product officer of Brainlabs.
But Perplexity also will have a lot to prove. Its success will hinge on its scale, brand safety plans, access to audience insights and targeting effectiveness.
Perplexity must get enough users for marketers to be interested, said Matt Larson, vp of media and connection strategy at Collective Measures.
The AI search engine claims it had over 10 million monthly active users in January.
Perplexity must also ensure its sponsored questions are relevant, Larson added.
“We all remember when native recommendation widgets went wrong by propagating spammy ads about belly fat and celebrity gossip,” he said.
Brands are also wary of brand safety and transparency. They don’t want the related questions they sponsor to show up against queries they don’t want to be associated with. This will be on top of mind for advertisers if they consider shifting spend, said David Shapiro, svp of earned media at NP Digital.
“If there’s any risk related to brand safety risk and ROI because of limited reach, that’s not a tradeoff that advertisers are going to want to make,” Shapiro said.
As Perplexity finalizes its product scope plans, “brand safety will be a paramount priority,” said Shevelenko.
