AI Firm Perplexity Reportedly Plans New Advertising Model

Perplexity is reportedly planning a new advertising model for its artificial intelligence (AI)-powered search engine.

As such, the company — in a bid to take on Google in the digital ad market — is in talks with brands such as Nike and Marriott, the Financial Times (FT) reported Saturday (Sept. 22).

According to the report, Perplexity wants to overhaul the auction-based ad system pioneered by Google, where companies bid to have a sponsored link placed against queries. Perplexity’s AI chatbot gives users a comprehensive response to questions based on information from the web, as well as suggestions for follow-up queries.

But with its new model, brands would be allowed to bid for a “sponsored” question, which features an AI-generated answer approved by the advertiser, the FT said.

The report cited internal company correspondence saying that Perplexity has held discussions with a handful of top brands, Nike and Marriott among them. The company says it aims to launch the new system by year’s end, targeting “premium” brands.

“Ads are really useful when they are relevant and coming from brands that are high quality, and a lot of people make purchases based on that,” said Aravind Srinivas, Perplexity’s CEO.

PYMNTS has reached out to Perplexity, Nike and Marriott for comment but has not yet gotten a reply.

Reports that Perplexity — valued at $1 billion earlier this year — was planning to run ads on its search results first emerged last month. 

In an interview with PYMNTS soon after, Caitlin Halpert, vice president of growth at performance marketing agency Journey Further, said that platforms such as Perplexity could seamlessly integrate ads without sacrificing user experience.

“I can see ads blending in nicely with how the platform works today,” Halpert said, noting that ads could appear alongside source documents in Perplexity’s interface.

Still, 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.

Meanwhile, PYMNTS wrote last week about efforts to integrate AI into the market technology sector, as exemplified by HubSpot’s recent unveiling of ‘Breeze,’ an AI-powered platform. 

“AI can analyze users’ data better and take into account browsing history and past purchase data to help users find the best product for their search faster. This helps businesses increase sales,” Keith Skelly, head of eCommerce at marketing firm Dark Horse, told PYMNTS.

As PYMNTS reported, generative AI is working its way into the advertising sector with the potential to revolutionize content creation. A report earlier this year by investment firm Andreessen Horowitz suggests this technology could transform commerce by letting marketers create personalized campaigns at scale across fragmented digital channels.

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