Perplexity AI is strategically developing its ad business, having launched 'sponsored follow-up questions' to enhance user engagement. The company participated modestly at Cannes Lions amidst larger competitors like Meta and Google, indicating a careful positioning in the market. Brands such as Whole Foods and Indeed are utilizing these ads, which do not require advertiser input on question wording. The focus is on providing value to users, as the ads aim to facilitate better decision-making. Currently, advertising makes up less than one-tenth of the company's revenue.
"It's additive because you're helping users figure out the next question they need to ask to make a better decision or figure out what they're trying to do versus just trying to put something in your face."
"Perplexity advertisers pay on a CPM, or cost to reach a thousand impressions, model. Advertising currently comprises less than a tenth of a percent of the company's total revenue."
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