This startup wants to change the auction-based advertising system pioneered by Google, where brands bid for ad placement in search results.
Perplexity has held talks with several leading companies, including Nike and Marriott. Photo: Getty Images
Currently, Perplexity's AI chatbot answers user questions based on information from the internet, including sources and links to websites.
With the new advertising model, brands can bid on “sponsored” questions, where the answers are generated by AI and approved by the advertiser. The company has been in discussions with Nike and Marriott and hopes to roll out the system by the end of the year, focusing on high-end brands.
Aravind Srinivas, CEO of Perplexity and former Google executive, emphasized that advertising is only effective when it is relevant and comes from quality brands, based on genuine consumer needs. Perplexity's efforts are part of a wave of challenges to Google, as the traditional search engine undergoes its biggest transformation in two decades.
Perplexity and competitors like OpenAI's ChatGPT have the potential to provide quick answers, replacing Google's traditional list of search results, along with accompanying advertisements. In response, Google has invested billions of dollars in AI and experimented with its own AI search functionality. However, analysts believe Google faces a challenge in maintaining its position, as AI could fundamentally alter its current business model.
According to Perplexity's advertising model, marketers pay based on CPM (the cost advertisers pay for every 1,000 ad impressions), at approximately $50 per 1,000 impressions, compared to Google's $1,100.
Microsoft, in partnership with OpenAI, is also competing in this field, but has only captured a small fraction of the search advertising market compared to Google. Google still generated $48.5 billion in search advertising revenue in the most recent quarter, accounting for more than half of parent company Alphabet's total revenue.
The future of Perplexity's new advertising system depends on its scalability. The company reported 250 million search queries in July, a sharp increase from the 500 million of the previous year. Additionally, Perplexity also monetizes its subscription service, priced at $20 per month, which offers more advanced AI features. The company's annual revenue increased from $5 million in January to $35 million in August.
Cao Phong (according to FT)
Source: https://www.congluan.vn/cong-cu-tim-kiem-ai-perplexity-dua-ra-mo-hinh-quang-cao-moi-de-thach-thuc-google-post313816.html
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