Perplexity AI, the AI-powered search engine, announced this week that it will begin testing ads on its platform. The ads will appear as sponsored follow-up questions alongside user queries and will be clearly labeled. The company explained that this ad program is aimed at generating revenue to share with its publisher partners.
Perplexity noted that subscriptions alone do not generate enough revenue for a sustainable revenue-sharing program, making advertising the best way to ensure a steady and scalable revenue stream. The first brands to participate in this initiative include Indeed, Whole Foods Market, Universal McCann, and PMG. Perplexity emphasized that the answers to sponsored questions will still be generated by its AI and not written or edited by the sponsoring brands.
Advertisers will not have access to users’ personal information. “We intentionally chose these formats because they integrate advertising in a way that still protects the utility, accuracy, and objectivity of answers,” Perplexity stated in a blog post. Perplexity’s move to incorporate ads stands in contrast to OpenAI’s decision not to include ads in its AI-powered search tool.
Testing ads for sustainable growth
Meanwhile, Google has piloted ads in its AI search experience for certain queries on mobile in the U.S.
Perplexity is promoting its ad products as a premium alternative to Google’s, emphasizing its platform’s ability to reach educated, high-income consumers. According to the company, 80% of its users have an undergraduate degree, 30% hold senior leadership positions, and 65% are in high-income white-collar professions, such as medicine, law, and software engineering.
However, some analysts have raised concerns about the scale, reach, and targeting capabilities of ads on Perplexity. Another challenge is the accusation of plagiarism faced by Perplexity from publishers, including News Corp’s Dow Jones and the NY Post. Perplexity claims it has changed how it cites sources and continues to expand its revenue-sharing program for publishers.
Despite this, the company acknowledges that publishers prefer that publicly reported facts are owned by corporations. With just one revenue stream—its premium subscription service—Perplexity is under pressure to ramp up monetization. The company is in the final stages of raising $500 million in funding at a $9 billion valuation.
As this initiative unfolds, it will be interesting to see user reactions, especially from those who left Google to avoid heavy advertising. The company remains optimistic, citing the potential for ads to provide useful information to users while supporting the platform’s growth.
