Perplexity announces ‘timely’ AI ad features as it looks to challenge Google’s search dominance

Perplexity, a generative AI-powered (gen AI) search engine attempting to compete with Google Search, has announced plans to launch advertising features on its platform in Q4 of this year. 

With the inception of large language models (LLMs) ChatGPT and Google Gemini in late 2022 and early 2023 sparking a gen AI arms race, the technology has quickly worked its way into search.

From Google’s Search Generative Experience to OpenAI’s SearchGPT, the search ecosystem appears to be the next battleground for AI innovation. 

With OpenAI and ChatGPT fuelled by investment from Microsoft and Gemini serving as Google’s offering within the space, Perplexity has flown relatively under the radar since its launch three years ago. 

However, backed by the likes of Amazon founder Jeff Bezos and trillion dollar software company, Nvidia, Perplexity has the capital to become a major player across both the gen AI and search landscapes. 

In a pitch deck, Perplexity outlined some of the plans for its incoming advertising offerings and why brands should prepare to jump on board. 

According to the pitch, Perplexity’s ad strategy will be to target 15 categories, including “health, technology, finance, arts and entertainment, and food and beverage”, with advertisers able to choose to sponsor “related questions” in response to queries or run video ads in “prominent positions”. 

Further advertising opportunities will include sponsored media alongside answers and the ability to purchase additional branded exploratory text. 

Perplexity’s pitch deck also outlined plans to offer retargeting capabilities through joint display ads on third-party properties as well as brand safety features like locked answers to Sponsored Related Questions which are approved by brands ahead of publication. 

“The real battle will be over which platform can attract and retain the most relevant, engaged users”

Promising to offer marketers a unique opportunity to engage with users multiple times in a single search chain by leveraging AI-driven tools to capture attention, Jake Kay-Lawson, Strategy Director at Claxon, believes Perplexity’s new ad platform “could provide a significant advantage, especially as advertisers seek more meaningful touchpoints in a crowded digital landscape”.

“This is another shift in the rapidly evolving media and marketing landscape which again will create risk or opportunity depending how you look at it," he said. 

“Google is already countering this with its Gemini AI, making it more accessible within Chrome in their most recent update. This move ensures that gen AI will be central to the search experience, regardless of which engine users choose. The real battle will be over which platform can attract and retain the most relevant, engaged users.

“But if Perplexity can back up the hype with genuine performance, this will create an intriguing point of consideration. Google’s ad costs seem to be forever going up with increasing competition, and typically if the audience is available, first movers can enjoy a period of cost-effective performance.”

With Google’s dominance in search going largely unchallenged for many years, Perplexity’s ad platform could serve as an inflection point in creating legitimate competition for the search giant. 

Ori Gold, CEO and co-founder of Bench Media, said the rise of OpenAI and the US Department of Justice ruling against Google’s monopoly has opened the doors for other competitors to gain a market share. 

He said: “Perplexity’s entry is timely, but they face formidable challenges with Google's new AI Overview, OpenAI’s upcoming SearchGPT, and other new entrants. Perplexity's strategy of targeting 15 verticals may spread them thin against industry giants with unmatched resources. 

“With 10 million active users, primarily educated, high-income professionals, they show promise for advertisers targeting early adopters. However, to truly gain traction, they may need to focus on niche audiences within these verticals. Competing at scale will also require significant backing. It's an interesting proposition to watch.”