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Are you ready for AI-powered paid search advertising?
Phew… a lot of buzzwords in this one question.
That's the concept behind Perplexity, a search-focused generative AI platform. In its new pitch deck for advertisers, it shows how the platform will win the hearts and minds of marketers by providing them with the prioritized answers to queries – all for a negotiated fee.
If that sounds like classic search advertising, it's not quite that. With classic search advertising, advertisers pay for ads based on their position. If you want the first spot, you pay more than you would for second or third place.
However, in a world of AI-powered search, a query only provides one answer. So how would this pricing model work? And what about brand safety?
To get answers, we asked Robert Rose, CMI's chief strategy advisor, to get his opinion. Read on or watch this video:
What does it cost to be the only advertiser?
Google has started to integrate AI messaging and functionality into Google Ads, but it's mostly limited to creating more relevant copy for search ads, optimizing performance by creating bid amounts, and of course analyzing landing pages to help you create a better conversion experience.
But when it comes to AI search results ads, I and most marketers think about how we pay for the privilege of being THE answer at the top of the results. What would that look like? What would we buy?
For example, I typed “who is the best content marketing strategist” into Google. The AI Overview names some people, many of whom I know well. Nice to see Neil Patel (as if he needed more publicity) and people like Scott Abel and Barry Feldman. But I'm not sure that's the list I'd choose for content marketing strategy services. And yes, I'm not on it, but they cite one of my articles (from 11 years ago) as the source of that knowledge, so that's interesting.
Maybe I could buy an ad on that results page for the right article to cite.
Next, I chose Perplexity because it is an AI search engine that challenges Google. It markets itself as a platform “where knowledge begins”. It must surely provide better results for this search query.
The result was a better list that includes my friends Ann Handley, Joe Pulizzi, Michael Brenner, and Jay Baer. It's a good list. But I'm not on that list either, and that doesn't bother me. (Excuse me while I cry in the corner for a moment.)
But what if I could buy a seat on that results screen?
Which of these would be for sale? The priority spot on the citation list or the actual answer? We'll just have to wait and see.
OK, the crux of all this is that Perplexity is already pitching the idea of integrating ads into the searcher's query response. According to the slide presentation seen by Digiday, the feature could arrive as early as October. While no pricing details are provided, a source said the plan is to charge upwards of $50 CPM (1,000 impressions).
Wow, that seems expensive. Of course, there is no data on the expected performance of these ads, and a lot may depend on the queries purchased.
But consider this: A classic Google search ad costs between $38 and $40 per month, so Perplexity would charge a 25% premium. Unless that number is just pulled out of thin air, the company must have a good feeling that its AI search ads will perform well.
The Digiday article says Perplexity plans to launch more than a dozen categories for its AI advertising product, including technology, health and pharma, arts and entertainment, finance, food and drink, sports, science, and travel. It also includes B2B, internet, telecom, home and garden, beauty and fitness, retail, and shopping. I can't think of a category they left out. I mean, maybe politics, but they seem to have everything else covered.
But there is another interesting tidbit hidden deep within the article.
Why does Perplexity work with traditional publishers?
Perplexity is building publishing partnerships and has already signed deals with Time Magazine, Der Spiegel, Fortune, Entrepreneur and Automatic. I'm surprised how many of these fit into the B2B category, and apparently the pitch deck details how marketers can buy inventory that will appear on their external publishing partners' sites.
It raises some interesting questions about what the integration between generative AI and these publishers will look like. Will they be a classic ad network, like Google Ads and its publisher partnerships? Or will they integrate the AI into the content pages under the publisher brand? For example, would they create a custom website driven by the Spiegel's “knowledge”, with original content generated by Perplexity, all sponsored by a major brand?
This is going to be interesting – bespoke content hubs that use proprietary learning content and are sponsored by brands. How about a content hub for small businesses, with all content generated by Perplexity, using Entrepreneur magazine content as a learning model and sponsored by a relevant brand?
Pay attention to these developments because these new opportunities not only impact your paid media budget, they can also affect where, how and why you invest money in original content.
AI is also being used in content marketing, and you should be willing to pay for it.
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Cover photo by Joseph Kalinowski/Content Marketing Institute
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
