Perplexity Ventures into Ad-Supported AI Search, Sharing Revenue with Publishers

chat

A.I

In a bold move set to reshape the landscape of AI-driven search engines, Perplexity has announced that it will soon begin compensating publishers whose content is utilized to generate specific types of AI search answers. This initiative signals a transformative chapter for the burgeoning AI company, which is pivoting towards a revenue-sharing model anchored in ad sales. Traditionally, ads have been deeply woven into the fabric of Google search results, but monetizing new AI search answers presents uncharted territory. Unlike Google, which runs ads alongside its AI Overview answers but not within them, Perplexity has, until now, refrained from serving ads with its search results.

This paradigm is shifting. Later this quarter, Perplexity will introduce a novel ad format allowing brands to purchase "related follow-up questions" that will appear beneath the initial response to a user query. These questions will be distinctly marked as sponsored, ensuring transparency. Brands will pay Perplexity an undisclosed fee for every thousand user views of these sponsored questions. When a publisher's content is leveraged in Perplexity's answer to a sponsored question, the publisher will receive a "double-digit" percentage of the ad revenue. Additionally, publisher partners will gain free access to Perplexity's large language models via an API, enabling them to develop their own answer engines based on their content. This could see news sites deploying answer bots to field questions about their stories. Furthermore, publishers will enjoy access to Perplexity's Pro service tier for all employees for a year.

The announcement comes amidst growing scrutiny over Perplexity's practices of scraping publishers' content to generate answers to user queries. Accusations have surfaced that the company continued to crawl websites even after publishers had denied permission. This has naturally led to apprehension among publishers regarding AI search tools. Traditional search engines typically direct users to relevant content across various sites, driving traffic and potential revenue for publishers. AI search tools, however, compile comprehensive answers from their web indexes and present them in a single interface, often obviating the need for users to visit the original sources. While AI search tools usually provide options to link out to the original sources, it's not always necessary, depriving publishers of potential site visitors who might subscribe, view ads, or share content on social media.

In response to these concerns, Perplexity has pledged to refine its processes and products based on feedback from its publisher partners, which include prominent names like Time, Fortune, Entrepreneur, and German news site Der Spiegel. Beyond the ad revenue share, Perplexity has updated its systems to better index and cite sources. "We're also collecting feedback to guide our product roadmap and new feature releases," the company stated in a press release.

Perplexity's chief business officer emphasized the importance of a vibrant ecosystem of business models and revenue streams for publishers, acknowledging that Perplexity's success hinges on a steady influx of factual content. This development comes on the heels of OpenAI's public unveiling of its own AI web search tool, currently in testing with a select group of users. OpenAI aims to integrate this tool into its ChatGPT app and is reportedly negotiating content agreements with web publishers, though the specifics of these agreements remain undisclosed.

Perplexity's strategy to monetize AI search answers by incorporating sponsored follow-up questions represents a significant evolution in the AI search landscape. By sharing ad revenue with publishers and offering them tools to harness AI for their content, Perplexity is striving to create a symbiotic relationship with content creators. This move not only addresses the ethical concerns surrounding content scraping but also provides a potential revenue stream for publishers in the digital age.

As AI continues to revolutionize the way we access and consume information, Perplexity's approach could set a precedent for other AI-driven platforms. By fostering collaboration with publishers and ensuring transparency in its ad practices, Perplexity is positioning itself as a forward-thinking player in the AI search arena. The company's willingness to adapt and respond to feedback from its partners underscores its commitment to creating a sustainable and equitable ecosystem for all stakeholders.

The introduction of sponsored follow-up questions is a clever way to integrate advertising into AI search answers without compromising the user experience. By clearly labeling these questions as sponsored, Perplexity ensures that users are aware of the commercial nature of the content, maintaining trust and credibility. This transparency is crucial in an era where digital advertising often blurs the lines between organic and paid content.

Moreover, the revenue-sharing model with publishers aligns the interests of Perplexity and content creators, fostering a collaborative environment. Publishers stand to benefit not only from the ad revenue but also from the enhanced visibility and engagement that AI-generated answers can bring. The access to Perplexity's large language models and Pro service tier further empowers publishers to innovate and create their own AI-driven solutions, enhancing their content offerings and user experience.

Perplexity's foray into ad-supported AI search answers marks a significant milestone in the evolution of AI-driven search technology. By addressing the ethical concerns of content scraping and providing tangible benefits to publishers, Perplexity is setting a new standard for AI search platforms. As the company continues to refine its processes and expand its partnerships, it will be interesting to see how this innovative approach shapes the future of AI search and digital advertising.