Perplexity launched ads in November 2024. By October 2025, they stopped accepting new advertisers. That's the story in two sentences. But the details matter if you're trying to understand where AI advertising is actually headed.
The Promise
Perplexity positioned itself as the premium alternative to Google. Their pitch deck showed $50+ CPMs. The audience demographics were impressive: 22 million monthly active users, 82% with undergraduate degrees, 45% with graduate degrees. Heavy representation from medicine, law, and software engineering.
The ad format was genuinely novel: "sponsored follow-up questions." Instead of banner ads or sponsored links at the top, advertisers could sponsor one of the "Related Questions" that appear after every answer. When clicked, Perplexity's AI would generate the response — not the advertiser. The content stayed objective. The advertiser got the placement.
Initial partners included Indeed, Whole Foods, Universal McCann, and PMG. Reports indicated Nike and Marriott were in discussions.
What Actually Happened
Six months into the pilot, the cracks became visible:
Limited scale. 22 million users sounds meaningful until you compare it to Google's billions. One Digiday report quoted an agency executive: "Limited inventory, slow rollout of features, and a lack of meaningful data on return-on-investment."
Wrong pricing model. Perplexity chose CPM (cost per thousand impressions) in a category where everyone bids on CPC (cost per click). Search advertisers don't think in CPM. One industry analyst called it "a hasty cash grab that may do more harm than good."
No performance tracking. Ad buyers reported it's nearly impossible to track how ads perform on Perplexity. No conversion tracking. No attribution. No A/B testing tools. For performance marketers, this is a dealbreaker.
Negligible revenue. According to The Information, ads generated only $20,000 of Perplexity's $34 million in 2024 revenue. Subscriptions drove basically everything.
Executive departure. Taz Patel, the head of advertising and shopping, left in August 2025 — nine months after joining to build out the ad business.
Then came the public retreat. At Advertising Week NYC in October 2025, Jessica Chan (head of publisher partnerships) announced that Perplexity was "not taking any new advertisers" and that ads "aren't currently on the roadmap" for Comet, their AI browser.
The Numbers That Matter
| Metric | Perplexity | Google (comparison) |
|---|---|---|
| Monthly active users | 22M | 4.3B+ |
| Daily queries | 30M | ~8.5B |
| Q1 2025 ad revenue | Negligible | $66.89B |
| Pricing model | CPM ($30-60) | Varies by CPC |
| Self-serve platform | No | Yes |
| Conversion tracking | No | Yes |
Why This Matters for You
You can't advertise on Perplexity right now. The door is closed to new advertisers. Only original November 2024 partners continue testing. There's no public timeline for reopening.
CPM-based search ads may not work. The fundamental model — paying for impressions rather than clicks or conversions — creates a mismatch with how search advertisers think and budget. This is a warning sign for other AI platforms considering similar approaches.
Premium audiences don't guarantee results. High-income, educated users sound great in a pitch deck. But without scale, conversion tracking, and self-serve access, the premium demographics don't translate into measurable ROI.
What About the Merchant Program?
Perplexity's shopping play is separate from ads and still active. The Merchant Program lets retailers share product data so their items appear in Perplexity's shopping recommendations. Key points:
- •Free to join
- •Products can appear in "Buy with Pro" one-click checkout
- •Shopify integration for broader product access
- •Visual search ("Snap to Shop") drives product discovery
- •No affiliate cut taken (for now)
- •Recently expanded to all users, not just Pro subscribers
If you're an e-commerce brand, this is worth monitoring. It's not advertising — it's more like Google Merchant Center for AI search. But the scale is still small, and returns are hard to track.
Brand Safety Considerations
Perplexity faces ongoing legal challenges from publishers including News Corp, The New York Times (cease and desist), and Encyclopedia Britannica over alleged content scraping. Cloudflare reported that Perplexity used deceptive crawlers to bypass website blockers.
For brand-conscious advertisers, these legal disputes add uncertainty. Being associated with a platform facing plagiarism allegations isn't ideal for reputation-sensitive brands.
What To Do Now
Don't wait for Perplexity. Even if ads reopen, the platform needs to solve fundamental problems: scale, tracking, and pricing model. These aren't quick fixes.
Watch the Merchant Program. If you're in e-commerce, joining is free and positions you for AI-driven product discovery. Low effort, potential upside.
Focus your AI budget elsewhere. Microsoft Copilot has real performance data and uses familiar CPC bidding through existing Microsoft Ads campaigns. Google AI Overviews reaches 1.5 billion monthly users. Both are measurable.
Learn from Perplexity's missteps. When other AI platforms launch ads, ask the hard questions: What's the scale? How do I track conversions? Is it CPC or CPM? Is there a self-serve option? Perplexity tried to build a premium ad business without solving these basics. It didn't work.
Bottom Line
Perplexity's ad experiment is the first real case study of AI search advertising — and it's a cautionary tale. Premium audience demographics, innovative ad formats, and early buzz weren't enough. Without scale, performance tracking, and a pricing model that matches advertiser expectations, the business couldn't take off.
For PPC marketers, the lesson is clear: don't chase shiny objects. When (if) Perplexity reopens to advertisers with self-serve access and proven conversion tracking, it might be worth testing. Until then, your budget delivers better returns elsewhere.
The Merchant Program is the one exception. It's free, it positions you for AI commerce, and it doesn't require you to bet on an unproven ad platform. That's the only Perplexity play worth making right now.
