A Complexity
Perplexity AI, the generative AI search engine trying to out-Google Google, began rolling out its ads products last week. And now it’s also got a new ecommerce agent plugged into Shopify, Adweek reports.
Ecommerce endeavors typically operate unprofitably before (and rarely until) they figure out how to make money per sale. Case in point, Perplexity is trying to create new in-app purchase behavior by offering free shipping.
It’s important to know that this shopping product, called “Buy with Pro,” is distinct from the ad business. It’s part of Perplexity’s $20-per-month subscription tool kit. But “Buy with Pro” does funnel high-intent searches back to Perplexity.
Elsewhere, Digiday reports that early Perplexity advertisers are seeing eyebrow-raising $30 to $60 CPMs. For comparison, Netflix set its initial CPM floor at $60, but failed to hold that line and now sits at around $30.
And that’s Netflix!
One quirk to Perplexity’s platform is that it transacts ads on a CPM basis, not the standard search cost per click. In other words, Perplexity isn’t ready for the direct response game and so it’s falling back on data-driven brand metrics.
“Search advertisers expect a click-based offering where they can model performance,” one search ad specialist who’s tried Perplexity tells Digiday. “But this is not available today.”
Shop ’Til You Drop?
An AI-powered shoppable ad platform is causing problems for readers of BuzzFeed Australia, 404 Media reports.
The platform, called Trendii, identifies the objects that appear in images on the site and matches them against available products online to generate affiliate sales.
Theoretically, this business model makes sense for a website that deals exclusively with light, fluffy pop culture content. But the ads have also appeared against stories from the BuzzFeed News archive as well as within recent listicles of “dark facts,” suggesting in one instance that readers “shop the image” of suicide victims and gory medical illustrations.
It’s reminiscent of the type of brand safety concerns that programmatic advertisers fear when buying news inventory on the open web. But in this case, the brand is the BuzzFeed publication itself – or the Australian-facing version of it, at least, which was licensed out to Val Morgan Digital Group in 2023.
BuzzFeed, by the way, shut down its news division last year in favor of generative AI content, and it is still all in on the strategy despite consistently declining ad revenue this year.
The New News
One prominent background story of the 2024 election was the credibility collapse of mainstream news and the rise of social media news influencers.
On Monday, Pew Research released a study charting the emerging news influencer landscape. The study looked at 28,000 social media accounts associated with 500 influencers.
The findings should prove illuminating amid the ad industry’s renewed commitment to supporting journalism, considering roughly one in five Americans – including 37% of those under 30 – regularly get their news from social media influencers.
According to the study, 63% of news influencers are men and 77% have no affiliation with a mainstream news organization. A majority (59%) monetize their platforms in some way.
News influencers are far more likely to be active on X (85%) than any other platform, with Instagram (50%) and YouTube (44%) rounding out the top three. Meanwhile, 27% are active on five or more platforms.
Despite concerns that social platforms censor conservative speech, news influencers are more likely to explicitly identify as Republican or conservative (27%) than Democratic or liberal (21%). On Facebook, conservative influencers outnumber liberals by three to one. TikTok was the only platform with more liberal influencers than conservatives (28% vs. 25%), and it also had the narrowest gender gap (50% men vs. 45% women).
But Wait! There’s More!
The DOJ is reportedly recommending that Google sell off Chrome as a fix for its search monopoly. [Bloomberg]
Is the K-pop market getting too saturated for brand sponsors to stand out? [Adweek]
McDonald’s is spending $100 million to lure customers back after an E. coli outbreak. [Business Insider]
Now there’s proof that OpenAI was trained on dialogue from Hollywood productions. [The Atlantic]
Neither investors nor media buyers have changed their position on Roblox following last month’s Hindenburg Research report alleging inflated numbers and child safety issues. [Digiday]
Still, Roblox has introduced a slate of new protections for under-13 users, seemingly in response to the Hindenburg report’s criticisms. [Fast Company]
A federal judge tossed out former Arkansas Governor Mike Huckabee’s false advertising suit against Meta, saying Huckabee’s case failed to demonstrate that Meta knew the ads – which depicted the anti-marijuana politician promoting CBD gummies – were fake. [AP News]