Perplexity Starts Testing Ads in AI-Powered Searches
AI search engine Perplexity has started rolling out ads, a big step as it looks to boost its revenue model. Ads will appear as “sponsored follow-up questions,” and will be labeled and positioned next to search answers. For now, this experiment is only in the U.S., with partners like Indeed, Whole Foods, and PMG on board per techcrunch
Why Ads? Subscriptions Aren’t Cutting It?
“Ad programs like this help us generate revenue to share with our publisher partners,” Perplexity wrote in a post on its blog. “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.”
While it offers a paid subscription (Perplexity Pro) with extra features, that alone doesn’t seem to generate enough revenue to keep things running smoothly. Perplexity emphasized that its “sponsored questions” won’t affect the quality of answers since brands don’t get any say over responses or user data. Instead, the company hopes this ad format keeps the experience unbiased but also financially viable.
Balancing Growth and Growing Pains
Adding ads to AI isn’t a clear-cut win, though. Microsoft tried something similar with Bing’s chatbot, only to quietly pull back. Perplexity is also navigating copyright issues, with lawsuits and cease-and-desist orders over how it uses content from big news sites. Still, with 100 million searches a week and a rumored $500 million funding round on the way, Perplexity is betting on ads to keep it competitive in the AI search game.
