Perplexity AI, the search engine backed by Amazon founder Jeff Bezos, is taking a page from the Google playbook by preparing to integrate ads into its search results. This move comes as Perplexity continues to gain traction, with its app boasting over two million downloads and handling over 230 million queries per month. According to CNBC, US queries have seen an eightfold increase in the past year.
Perplexity’s advertising model will utilize a cost-per-thousand-impressions (CPM) approach, with CPM prices expected to exceed $50. The 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 Perplexity-generated responses.
The decision to introduce advertising comes amidst a period of rapid growth for Perplexity. The company reported a 700% increase in revenue and usage since the start of the year, following a $250 million funding round. This growth has not gone unnoticed, with Google launching “AI Overviews” in its search engine and ChatGPT-maker OpenAI announcing a waitlisted prototype called SearchGPT.
However, Perplexity has also faced criticism regarding its content-sourcing methods. In June, Forbes and Wired reported instances of their content appearing on Perplexity without proper attribution. In response, Perplexity has implemented 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 Perplexity’s search engine.
Perplexity’s foray into advertising highlights the increasing importance of AI in the search landscape. As AI-powered search engines like Perplexity gain popularity, the competition to attract users and generate revenue is likely to intensify. The future of search may be driven by a combination of search results, AI-powered summaries, and targeted advertising.
