Perplexity’s plans for competing in the ad space are becoming a bit less puzzling.
A new advertiser pitch deck shows how the AI search startup hopes to win over advertiser later this year as it works to set itself apart from competing startups like ChatGPT and giants like Google.
According to a copy of the pitch deck obtained by Digiday, the plan is to integrate ads within users’ queries and answers — potentially as soon as the fourth quarter of 2024. One page in the deck says buying ads with Perplexity can help brands “reach, educate and spark curiosity of potential customers at high-leverage moments.” The company is also pitching an educated, affluent and engaged user base. Although the pitch deck didn’t talk about pricing, a source within Perplexity confirmed the goal is to target CPMs “north of $50.”
Total monthly U.S. queries now totaling 230 million — eight times the total queries it had just a year ago, according to the deck.
One example in the pitch deck shows a Nike ad sponsoring a related question when a user asked about basketball shoes or options for sponsored videos alongside a desktop version. Another shows a sponsored Marriott Bonvoy video ad next to someone asking about “best European travel destinations for families.” Another option is to have “branded explanatory text” that appears above sponsored and organic related questions.
More than a dozen advertising categories are listed as key for the initial launch, according to the pitch deck. Some of those include technology, health and pharma, arts and entertainment and finance food and beverage, sports, science and travel. Others are business, industrial and B2B; internet and telecom; games; automotive; home and garden; beauty and fitness; retail; and shopping.
Perplexity also is showcasing its features in a new video ad this week that explains some of the platform’s features for helping users search, find locations and also translate languages. (The ad is remarkably similar to an old Google ad, 2010 Super Bowl commercial, “Parisian Love,” which follows the same storyline.)
Perplexity wasn’t immediately available for an on-record interview about its current plans for advertising. However, many of the plans seem pretty similar to what Perplexity was planning earlier this year.
In April, Chief Business Officer Dmitry Shevelenko told Digiday about the plans for a road map focused on “accuracy, speed and readability.” Shevelenko also noted the company couldn’t use the same model as Google and couldn’t pay companies like Apple $10 billion a year for search deals, adding that the company didn’t plan to rank sponsors differently than organic answers.
“The weighting will be the same. That’s our version of ‘Don’t Do Evil,’” Shevelenko told Digiday earlier this year. “We’re not going to buy us an answer. Whenever we have advertising, that’s the one thing we don’t do: You can’t pay us to have the answer be different because you’re paying us.”
Distinguishing David from Goliath is also part of the plan. To make its point, one page in Perplexity’s deck has a single sentence: “This era has been defined by ‘search’ engines, but we’re taking a different approach.” Perplexity also shows a page with a screenshot of a Google results for “best headphones” and all the sponsored product images that appear before the first editorial article. Another shows a travel query answered with several sponsored links to various travel planning websites.
“For nearly two decades, the way we searched for information online was defined by this idea of ten blue links,” according to the deck. “We’ve designed our product from the ground up so AI will read relevant information from the web and synthesize it for you in a conversational way.”
For the Q4 launch, Perplexity is looking to get a “select few partners,” including some that could get exclusive category ownership through the end of 2024. It’s also offering to get initial advertisers early input on the platform’s ads product roadmap. The pitch deck also shows other options for various types of media, including an out-of-home ad at a German train stop and another mockup of an ad appearing next to T-Mobile’s logo.
The advertising play comes as Perplexity also builds out new publisher partnerships. Just last month, it announced a new revenue-share program, with initial partners including Time, Der Spiegel, Fortune, Entrepreneur and Automatic.
The new ad pitch deck also includes ways for marketers to buy ad inventory beyond Perplexity’s to appear on third-party pages. One page in the deck previews how advertisers might run joint display ads, such as a Perplexity ad near the top under the masthead of The Wall Street Journal. The page also seems to take a dig at X by featuring an article about Elon Musk suing advertisers through its recently filed complaint against GARM.
Speaking of brand safety, Perplexity’s deck has a page devoted to the topic. The company says it will be able to block terms advertisers want to avoid and lock answers to sponsored related questions.
“Answers (and all accompanying content) to your Sponsored Related Questions are approved ahead of time, and can be locked, giving you comfort in how your brand will be portrayed in an answer,” according to the pitch deck.
It’s also unclear how Perplexity plans to prioritize sponsored follow-up questions versus organic questions or how the sponsored pages might affect organic answers to a user’s initial query — something established rivals like Google have been asked about by users and advertisers alike.
Measurement is also something Perplexity plans to highlight, starting with eight initial metrics. Some of those include the total queries in a category, number of queries that met criteria for an ad to show up, impressions delivered, unique impressions, click volume for sponsored media, sponsored related questions and website links. Future plans include giving advertisers a list of questions that are asked about a brand and additional data to “improve personalization and relevance.” However, the deck doesn’t list any third-party measurement partners for measurement or how it plans to protect privacy.
While Google is still dominant, some SEO experts say it’s worth paying more attention to what Perplexity and other startups are building with both organic and paid search. According to Jim Yu, founder and CEO of BrightEdge, companies like Perplexity and OpenAI’s SearchGPT are starting to generate referral traffic to marketers for the first time. Even if it’s “still a blip,” it’s noteworthy, he said.
According to BrightEdge’s new research, Perplexity is stronger in research use cases that require targeted, controlled and in-depth research into specific areas. While Perplexity has built an answer engine that has a deeper sort of capability around those use cases, Yu said Google’s huge advantage is also its biggest vulnerability.
“[Google] has such a wide, wide surface area where they can cover all kinds of information around the world, everywhere, every point of interest, every kind of topic,” Yu said. “It also means they can’t do everything well. There’s sharp attacks in areas where [Google] is just going to have a harder time responding quickly, because they’re always balancing stuff.”
https://digiday.com/?p=553535
