Web publishers are experiencing large drops in revenue and traffic tied to new AI-generated search behaviors. Many publishers are shifting away from traditional fixed data licensing toward usage-based revenue and rev-share arrangements with large LLM operators. Several major news organizations signed fixed annual licensing deals, while smaller experiments like Perplexity's rev-share yielded minimal ad income. The IAB Tech Lab created an AI Content Monetization Protocols working group to explore standards, but LLM providers retain bargaining power and no obligation to participate. Separately, LG Ads (formerly Alphonso) overcame legal disputes with LG Electronics and is preparing an IPO.
Web publishers are seeing revenue and traffic evaporate in lockstep with the rise of new AI-generated search habits. What's a pub to do? A growing number are shifting their focus from data licensing deals with LLM operators (like OpenAI, Anthropic, Google's Gemini, et al.) to usage-based revenue models, The Information reports. Let's call this what it is, though. Publishers are scrabbling desperately for something - anything - to help them fill their coffers as they cast about for a more sustainable revenue model.
In the meantime, a handful of large, well-known news companies - like Reuters, The New York Times, News Corp. and AP - have signed fixed annual data licensing deals with one or another of the AI generators. And Perplexity adopted a publisher rev-share model last year after Forbes threatened to sue for copyright infringement. But Perplexity only earned roughly $20,000 in ad revenue in Q4 2024, per The Information - so, all in all, not much to share around.
Back To Square One LG Ads is getting ready for its public market debut - finally. Its IPO had been delayed until now by a series of multiyear legal disputes with LG Electronics (LGE), the South Korean TV manufacturer that acquired smart TV data startup Alphonso in 2021. (Alphonso was rebranded as LG Ads not long after the acquisition.) According to the original stockholders agreement, LGE had promised to give Alphonso/LG Ads the opportunity to go public within five years.
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