Perplexity AI to Share Ad Revenue with News Publishers

Perplexity AI has announced a plan to share advertising revenue with news publishers when its chatbot references their content in user queries. This initiative aims to address criticism of plagiarism and unethical web scraping leveled against the startup.

New Revenue Model

Dmitry Shevelenko, Perplexity’s head of business, revealed to TechCrunch that the company began exploring this revenue-sharing program back in January, prior to the accusations from publishers. The primary motivation is to ensure the continuous availability of accurate information by supporting journalists financially.

“How do we align ourselves with publishers?” said Shevelenko. “We’re not cannibalizing publishers or competing with them, but we need to do our part to make sure that there are these vibrant and diverse business models and revenue streams.”

As generative AI transforms search behavior, publishers are seeking innovative monetization strategies.

First Publishing Partners

The initial group of partners includes Automattic, Der Spiegel, Entrepreneur, Fortune, The Texas Tribune, and TIME. These partners will gain access to Perplexity’s APIs and developer support to create custom answer engines for their websites. They will also receive Perplexity’s Enterprise Pro offering, which includes enhanced data privacy and security features.

Perplexity plans to start displaying ads on its platform within a few months, partnering with “top tier brands across every major consumer and B2B category.” For instance, travel-related ads might appear in response to user queries about visiting Tokyo. Revenue from these ads will be shared with the publishers whose content is used.

Although the specifics of the ad-revenue share were not disclosed, Shevelenko mentioned it would be in the “double digit” percentage range.

Industry Reactions and Partnerships

Other media companies, such as The Atlantic, News Corp, The Financial Times, DotDash Meredith, Axel Springer, and Vox Media, have signed licensing deals with OpenAI, despite criticisms from their journalists regarding the use of their content to train AI models without proper credit.

Michael Frazier, VP of data and operations at Entrepreneur Media, emphasized the importance of meeting users where they are. He noted that his team is developing a tool to enhance user interaction with their content, leveraging Perplexity’s APIs.

Perplexity collaborates with ScalePost.ai, a platform that facilitates partnerships between publishers and AI companies, providing AI analytics to track how Perplexity cites their content.

“One of the things we’re looking forward to getting more information on is user intent and user behavior and how and where they’re finding us,” continued Frazier. “That will be really valuable and help give us insight into how we can better support our readers.”

When questioned about the potential for incorrect answers from Perplexity’s chatbot, Frazier acknowledged the risk but expressed confidence in Perplexity’s efforts to minimize such occurrences.

Fair Play in Search Results

Perplexity assured that publishers in its program would not receive preferential treatment in search queries, a practice promised by OpenAI to its media partners. Shevelenko downplayed the importance of click-through rates, emphasizing the unique value of their revenue-sharing model and access to Perplexity’s APIs and Pro subscription.

“For the first time, a tech platform is actually giving publishers revenue share out the gate, and we think that’s powerful,” he said. “The reason we’re doing something that Google never did is we don’t think the main value we bring to publishers is traffic, and I think it would be disingenuous for us to claim otherwise.”

Ongoing Legal Challenges

Despite the trend of collaboration with AI companies, not all publishers are onboard. The New York Times, Raw Story, AlterNet, and The Intercept have sued OpenAI for allegedly using copyrighted material without proper credit. Condé Nast, the parent company of The New Yorker, Vogue, and Wired have issued cease and desist letters to Perplexity for similar reasons, although Perplexity has not complied and instead invites these publishers to join its program.

“We’re excited to partner with them,” said Shevelenko.