AI search engines: how advertising is entering the conversation

With ChatGPT having just launched Atlas web browser, capable of opening pages to respond to queries, analysing content, and conducting complex searches, the race to monetise AI search engines is heating up. At Perplexity (2024 revenue: US$34 million , ARR of US$200 million in September 2025), this began in November 2024 with the opening of a “merchant center.” Advertising experiments took the form of “chat-vertising”: alongside the AI-generated responses, questions and answers appeared that were marked as sponsored. Campaigns were conducted with Whole Foods Market (a subsidiary of shareholder Amazon) and with brands such as Indeed, PMG, and Universal McCann, sponsoring follow-up questions in search results. For example, when searching for “What is the best ice cream?” on Perplexity, this sponsored follow-up question was generated: “Does Whole Foods Market offer fresh desserts, cookies, and freshly made sweets?” The answer, describing the store’s dessert offerings, is taken from the e-commerce site and Reddit. “Relevance is the most important factor in displaying this ad”, said Taz Patel, Director of advertising and shopping. “Advertising terms may change, the user interface may change, but the way we design ads is not about bidding, budgets, prices, or other such elements”.

Perplexity: sponsored answers on hold

But while several advertisers said they had difficulty measuring the performance of their campaigns (no CTR or ROAS tools) and advertising revenue reached only US$20,000  last year according to The Information (0.06% of the total), Perplexity announced a turnaround on October 9.