AI search engine Perplexity, powered by AI, is experimenting with beginning to insert ads into its platform. In the United States, for instance, it plans to begin showing ads - ones framed as "sponsored follow-up questions." For instance, "How can I use LinkedIn to improve my job search?" Those advertisements would appear to the side of answers and be branded as "sponsored.

On board are advertisers like Indeed, Whole Foods, Universal McCann and PMG. Brands will join the ad program through the agency partners.
"Ad programs like this help us generate revenue to share with our publisher partners," Perplexity wrote in a recent blog post. "Experience has taught us that subscriptions alone do not generate enough revenue to create a sustainable revenue-sharing program. [A]dvertising is the best way to ensure a steady and scalable revenue stream."

Perplexity has said that answers to these "sponsored questions" will also still be generated by its AI, and not written or edited by the brands sponsoring the questions. Advertisers also won't get access to users' personal info, the company said.

"We deliberately select these types because it includes advertising in a manner that still safeguards the utility, accuracy, and objectivity of answers, the blog post says. "These ads will not alter our commitment to maintaining a trusted service that provides you with direct, unbiased answers to your questions."

Perplexity welcomed ads, but OpenAI, at least for now, seems to have ruled out launching its AI-powered search tool, ChatGPT Search, with ads. Competitor Google has also been experimenting with ads in its AI search experience, AI Overviews — recently beginning to serve ads for certain queries on mobile in the U.S.

Ad products from Perplexity are said to be marketed as a premium option to Google, suggesting the platform gives access to relatively educated and high-income consumers. However, analysts have raised concerns over the scale, reach, and targeting capabilities of ads on Perplexity.

The trouble in using ads in AI-generated content was well illustrated by an example with Microsoft. The firm only briefly experimented at including ads in the responses generated by its chatbot on Bing. It quietly pulled the "sponsored results" after a few weeks.

Though, though perplexity has been called out for plagiarism, and that in itself might be a reason, at least some advertisers are being put off. News Corp's Dow Jones and the NY Post have sued the AI company citing what they call a "content kleptocracy." Many other news sites have shown evidence that Perplexity closely replicates their content, and last month, The New York Times sent the startup a cease and desist.

Perplexity, which just last week declared that it is serving 100 million search queries a week, asserts that it has modified the way that its platform cites sources, and expands further its revenue-sharing program with publishers. The company, however, has also been on the defensive, arguing that "publishers wished [its] technology 'didn't exist' and that they would prefer that 'publicly reported facts are owned by corporations.'"

Perplexity is being squeezed to take the monetization pace up a notch. It is reportedly on the verge of closing funding rounds totaling $500 million at a valuation of $9 billion; its one revenue stream is its premium subscription service, Perplexity Pro, that offers extended features for $20/month or $200 per year.