Jeff Bezos-backed Perplexity AI is gearing up to integrate ads in search results, borrowing a leaf from search giant Alphabet Inc.‘s Google that it is challenging.
What Happened: According to a pitch deck circulated by the startup, the Perplexity AI app has been downloaded over two million times. It also handles over 230 million queries a month as U.S. queries have increased eightfold in the past year, reported CNBC.
The startup’s advertising model will follow a cost-per-thousand-impressions (CPM) approach, with CPM prices expected to exceed $50, the report noted, citing a source familiar with the matter.
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The company’s 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 a Perplexity-generated response, the report added.
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Why It Matters: Earlier this month, it was reported that Perplexity AI’s revenue and usage have seen a 700% growth since the start of the year, following a new $250 million funding round.
Google responded to Perplexity by launching “AI Overviews” in search, providing users with quick summaries of answers at the top of search results. ChatGPT-maker OpenAI also announced its entry in the search category by announcing a waitlisted prototype called SearchGPT.
Perplexity has also faced backlash over its content-sourcing methods, with allegations of plagiarism being leveled against the AI startup. In June, Forbes and Wired reported instances of their content appearing on Perplexity without proper attribution.
In response, Perplexity has made 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 the company’s search engine, the report noted.
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