Greetings from Pebble Beach. I have to say: this place is magical. It's day two of the Google Cloud Leaders Circle and, honestly, this is an event where anyone interested in AI would want to be a fly on the wall. Brilliant people, extraordinary conversations, leading edge tech… and golf!
In the news: Perplexity.ai is planning to introduce advertising into its interface. In a post titled , Perplexity outlined its approach: integrating sponsored questions crafted in collaboration with advertisers. While the questions will be labeled as sponsored, Perplexity says the answers will not be influenced by the advertiser. Instead, they will surface the paid advertisement next to the answer. The company's blog post did not show an example of the entire experience.
When Perplexity launched, I fell in love. It was a way to do 10 minutes of Google searches in 10 seconds. Then, over time, the service became less useful because the quality of the results varied so much, forcing me to check every answer (which defeated the purpose). I still use Perplexity for some searches, but I've installed the GPT Search Chrome extension and made ChatGPT Search my go-to AI-assisted search engine. Right now, I have Google and Perplexity bookmarked and I use them when needed.
Perplexity says it needs ad dollars to make ends meet. I'm sure that's true, but is this the right way to integrate advertising into AI-generated search results?
If you ask the wrong question, you're guaranteed to get the wrong answer.
Google is not a search engine. It is a highly specialized direct response advertising engine purpose-built to translate the value of "intention" into wealth for Google (Alphabet) shareholders. It is optimized to put the right ad in front of the right person at the right time. In other words, it is designed to optimize revenue; all other considerations are secondary.
All of the new generative AI-based search products – OpenAI's ChatGPT Search, Google's AI Overviews, Perplexity.ai, etc. – are actually search tools. They are not optimized for advertising; they are optimized to give you the information you are intending to find. Would anyone ever trust a sponsored paragraph of information returned from a search query? Isn't that the definition of an advertorial? You don't need to be a skeptic or a conspiracy theorist to instantly mistrust sponsored information; we've all been trained to know an ad when we see one.
Where does that leave Perplexity and the rest of the AI ad newbies who hope to eat Google's lunch? Consumer behavior is hard to change. Old habits die hard. Choose your cliché. We're entering an interesting era of trial and error. I'm happy to do the trial; the sociology says there's going to be some errors.
As always your thoughts and comments are both welcome and encouraged. Just reply to this email. -s
P.S. CES© is just around the corner (Las Vegas, January 7-10, 2025). Are you going? If you are, our executive briefings and floor tours are the best way to experience the show. .
ABOUT SHELLY PALMER
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named he covers tech and business for , is a regular commentator on CNN and writes a popular . He's a , and the creator of the popular, free online course, . Follow or visit .
