Zero Clicks #3: LLM ads may not suck

Every week in Zero Clicks, we explore the interplay of AI, media, and commerce.

Since the advent of LLM based search, the existential question looming over the industry has been around how the hell we plan on paying for this whole shindig. In April, Adweek reported the obvious– Perplexity for one, planned to sell ads. Now, the Financial Times has some more details on how they plan to pull it off.

There’s always an immediate rush of cynicism anytime advertising comes to invade a previously sacrosanct product. Call me crazy, but I think Perplexity has the potential and seemingly the wherewithal to build a truly fascinating advertising product that makes its core product better rather than setting it on a path to enshittification. Unlike AdWords, Perplexity’s UI has the ability to both reframe or extend true conversations at the point of discovery.

As an example, let’s take a search for “What is the best small business card?”-- the thirstiest of queries for advertisers and one that starts with a full page of ads on Google.

In contrast, Perplexity amalgamates this NerdWallet guide along with a few other prominent finance news websites to provide a pithy summary.

Below the search, there is an “Ask follow-up” and related questions box, which presents a fascinating canvas for marketers.

Intellectually speaking, this is going to be a fun tool for cerebral CMOs and product marketers to play with. In the example above, you could imagine Brex, which sets itself apart largely on the basis of not requiring a personal guarantee, asking “Which card requires just an EIN to apply?”

Being good at Perplexity ads is going to take a certain narrative craft and panache from marketers that wasn’t required by Google. This won’t be easy– Reddit has had a paid ads product for several years, and most brands still don’t really know how to do anything other than interject stock promotional messages into subreddits that do little to actually further conversation. But done correctly, this is less intrusive than any ad format that has existed since the dawn of the internet. It’s search advertising that is…very demure, very mindful.

I expect Perplexity ads to first find product-market fit in enterprise B2B, empowering brands to channel their most effective challenger salesperson. The best sales reps effortlessly convince prospects that they are asking the wrong question when they are evaluating buying a product or service and reframe to focus on the core pain point they solve. That’s essentially what sponsoring related questions is meant to do.

Of course, Perplexity is merely a conduit here– the company relies on sourcing information from high-quality publishers and other content creators, making its newly launched publisher program the most important initiative at the company. If not a moral responsibility, Perplexity has a business responsibility to ensure that its growth is a net positive for media outlets that produce high-quality journalism. No matter how well you curate a shit salad, people won’t eat it if it’s made of shit.

For all of its flaws, so far the laundry list of blue links to external sources is the best form factor for satisfying the aggregate interests of consumers, media entities, and the advertisers who pay for the whole damn thing.  If Perplexity or OpenAI can’t successfully build an ad product, the best sustainable search engine of our generation will just be late 2000s/early 2010s Google.

I’m on the side of anyone who is trying to do something better.

Business Development Manager, Hearst

From its inception, I’ve watched Hearst’s marketplace venture closely as a canary in the coal mine for the broader content to commerce thesis. If Hearst– with its vast resources and massive audience, struggles to find product-market fit for a marketplace, it will be tough for any media company. The job posting above is a great opportunity for a hungry seller to be on the front lines of trying to prove this business can work.

While not as sexy as “content to commerce,” the core utilitarian opportunity Hearst is chasing is accessing retail media vs. affiliate pools of advertiser cash. By truly building a marketplace akin to how brands spend with Amazon, Walmart, and other retail media networks, Hearst (in theory) has a far easier path to lucrative co-op budgets that are generally difficult off limits for affiliate publishers.

Lifecycle Market Manager, Misen

Misen is something of a perfect microcosm of the DTC era. The company built a kickass disruptor product, overspent on growth to the brink of extinction, and is now executing an impressive turnaround with a hyperfocus on profitability.

According to their CEO, the company expects 700-800 applicants for this marketing role, highlighting just how brutal the job market still is in eCommerce. Sadly, way more talented people than there are jobs amidst the great post-pandemic reset.

Strategy Analyst, Mr. Beast

Perhaps nothing makes me doubt my fundamental grasp on human nature as much as the success of Jimmy Donaldson. To my eyes, the dude is just some frumpy 26-year-old, and yet, he is undoubtedly the pre-eminent media brand of his era. Most of his job postings are highly specialized, so this rare generalist opportunity to join his team is the type of job that accelerates someone’s career by a decade or more.