• The $8 billion Skydance and Paramount Global deal, led by David Ellison, is finally a reality.
• Ellison plans to revitalize Paramount amid streaming disruption and potential political challenges.
• He faces big questions about how to manage linear decline, handle Donald Trump, and more.

After many twists and turns, the $8 billion tie-up of Skydance and Paramount Global is finally happening. So what's next?

Oracle billionaire Larry Ellison and his son, David, are taking control of Paramount Global from Shari Redstone with a plan to revive the storied entertainment company by giving it a tech infusion. The epic drama has played out as the media industry faces disruption from the rise of streaming — and now a president who's used his power to influence critics in the media and beyond.

We know this much: David Ellison, who will be chairman and CEO of the new combined company, has named his new leadership slate, sweeping out most of the old Paramount execs except for George Cheeks, previously co-CEO of Paramount; while expanding the power of execs like Dana Goldberg, who was chief creative officer at his (much smaller) Skydance Media.

Big changes are ahead for the home of CBS, MTV Networks, Paramount Pictures, and more, where Ellison has promised cost cuts of $2 billion. The company is also expected to invest $1.5 billion to help pay down debt.

The deal's backers, the Ellisons and RedBird Capital Partners, have deep pockets that could fund additional, transformative deals in areas like tech or gaming, said Jonathan Miller, CEO of Integrated Media Co., which invests in digital media and is not an investor in Paramount Skydance. "There's a lot of money surrounding Paramount right now," he said. "They can think big."

Many questions lie ahead, including how its streaming strategy will play out, what the company might keep and buy, and how it'll navigate potential political headwinds.

Paramount is attractive for its new senior management that's well-liked, massive pool of capital, and willingness to look at different structures for the streaming business, Raymond James wrote in a July 31 investor note. "Still, Paramount faces significant exposure to the declining linear TV business, high leverage, and for now a sub-scale, not yet globally profitable streaming business."

Paramount didn't immediately respond to requests for comment for this story.

Here are some of the key questions and challenges facing the new Paramount Skydance.

Can tech save Paramount?

Ellison made a tech-heavy pitch for combining Skydance and Paramount, invoking Steve Jobs as he explained how he sees technology and the arts working hand in hand. Describing the combined company as equally a tech and media enterprise, he talked about upgrading the Paramount+ algorithm to give users better recommendations and using AI to improve content creation. He also described how Skydance worked with his father's company, Oracle, to create a cloud-based animation studio, which it used to produce part of "Spellbound," a 2024 animated film, increasing efficiency and cutting costs.

But changing user behavior takes time, and Paramount+ needs more than better recommendations to make it a must-have for entertainment seekers, starting with more must-see shows. Hollywood is gradually embracing AI, especially to lower production costs. The tech and its adoption are still relatively new, making it hard to precisely quantify how much it could actually cut expenses (or make movies better, as the glass-half-full people like to say).

How can Paramount+ compete?

Paramount+ counts 78 million subscribers, helped by the NFL, CBS shows such as "NCIS" and favorites like "Star Trek" and the "Yellowstone" universe. And Paramount has started turning a profit. But Paramount+ ranks fourth among the major paid streamers by subscriptions and accounts for just 2% of TV streaming viewership, according to Nielsen.

In addition to the aforementioned tech enhancements, Paramount+ needs more must-see shows to drive subscriptions. LightShed has noted that Skydance struck deals to make movies for Netflix and Apple, so those won't be available to Paramount for a while. But in a sign it means business, Paramount just did a $1.5 billion deal for the global streaming rights for "South Park," and will look to Cindy Holland, hailed as the architect of Netflix's original content business, to give its streamer a shot in the arm.

Hollywood insiders are excited for Holland to get going and for Paramount to kick-start the marketplace for new shows, which has slowed since the end of Peak-TV.

One agent said talent is saving pitches for shows that they think could be a fit for Paramount, confident it'll soon be a big customer again.

A second agent said industry chatter is that Paramount will ramp up its movie output. "What it means is a very healthy new buyer," the person said, referring to Ellison's deep pockets compared to the former cash-strapped company. He also expects Ellison will be looking for high-minded fare in addition to the broadly appealing titles Skydance is known for, like the "Top Gun" and "Mission: Impossible" movies.

How will Paramount solve the linear TV problem?

The old linear TV business is going away in favor of streaming, especially as companies put more of their live sports on streaming platforms, taking fans with them.

Growing the streaming arm while managing a declining linear business can go two ways: Paramount can continue to milk its linear channels for the income they're still generating, or spin them off to generate cash. Lately, companies like Comcast and Warner Bros. Discovery have chosen the latter strategy.

Christopher Vollmer, managing director at ad industry consultancy MediaLink, thinks Paramount will take a similar route. "They'll do as much as they can to raise cash," he said. "If you're committed to building a streaming business, you have to put as much firepower behind them as you can."

It's not necessarily an all-or-nothing game, as he sees it. "They'll want to keep CBS to keep their leverage with the distribution world, and with the NFL, the consumer value the network brings is really important." Others, like BET and Showtime — that Paramount tried to sell before — could go.

What about Trump?

Anxieties have been running high for some people in and outside CBS's news division, with President Donald Trump repeatedly targeting the news media. Paramount agreed to a $16 million settlement over a lawsuit filed by Trump over routine editing of a "60 Minutes" segment that many legal experts said was meritless — a settlement that was lambasted in journalism and political circles as a concession to get the Skydance deal through.

Paramount has disputed this, saying the settlement was "completely separate from, and unrelated to, the Skydance transaction." Skydance went on to agree to conditions to get the merger done, including having an ombudsman and committing to an "unbiased" editorial direction. CBS also canceled the late-night show of Trump critic Stephen Colbert, drawing scrutiny for its timing ahead of the FCC approving the deal. (Paramount has said the move was "purely a financial decision against a challenging backdrop in late night.")

Ellison hasn't given a lot of clues about his politics. His father is close to Trump and also has looked at buying Bari Weiss's right-leaning outlet, The Free Press, The New York Times reported. So some insiders are on edge about what role Ellison could play with the news.

It might not take long to find out. Trump just this week ripped CBS News star Gayle King as having "no talent" and questioned her future at the network. For now, "60 Minutes'" recent appointment of an insider, Tanya Simon, to lead the newsmagazine has raised hope for some.

"I have no doubt that she and the excellent corps of correspondents will keep '60' on a strong and sure and independent footing, and I think the new corporate bosses are smart enough to know that's the right call," former producer Rome Hartman said.

Politics aside, it's also not hard to imagine Paramount using CBS News to help get to its $2 billion in cost cuts, given it's already trailing the other news networks.

Could games jump-start Paramount?

Skydance has two video game studios, and Ellison sees games as one of the ways Skydance can kick-start Paramount's business.

Video games are a conundrum for Hollywood companies; they're expensive and risky, but ignoring them means missing a big opportunity to extend their IP to a hugely popular pastime.

WBD and Disney have taken stabs at games with mixed success, and Netflix is building out its games, but has yet to show meaningful results.

If Ellison could figure out how to leverage Paramount's well known IP into games success, he'd accomplish something few others have.

What's the endgame?

Paramount Skydance still isn't considered big enough to hold its own among bigger media and tech giants, and industry observers expect more consolidation will follow.

Analysts have said Paramount Skydance could be a good pairing with Warner, with HBO Max's prestige shows nicely complementing Paramount's sports and Taylor Sheridan's Western soaps. Such a deal would create more exposure to linear TV, though, and it could be hard to fit CNN and CBS under the same roof. And there's the question of whether Comcast's Brian Roberts will get to WBD first. WBD didn't comment, and Comcast didn't immediately reply to a request for comment.

Or, Paramount and NBCUniversal could form an alliance that could take on Disney, but it would require casting off one of their news networks to avoid antitrust concerns. Of course, all these scenarios would mean either Ellison, Warner's David Zaslav, or Roberts would have to go away, which none seem ready to want to do.

Then, more interestingly, there's the TikTok wild card. Oracle has already been involved in both TikTok and Paramount as its cloud services provider. It's also a potential bidder among a group of US firms looking to buy TikTok's US operations and save TikTok from a US ban, Bloomberg and other outlets have reported.

If Oracle ended up owning TikTok, it would put the Ellison family behind one of the biggest content companies and one of the biggest tech platforms, with more than 150 million active monthly US users.

• Linda Yaccarino was named CEO of EMed, a telehealth company, a month after leaving X.
• Yaccarino's tenure at X was turbulent and involved doing a lot of damage control for Elon Musk.
• The new role could help her bolster her CEO chops in a company outside the media world.

It didn't take Linda Yaccarino long to get a new job after leaving Elon Musk's X, where she was CEO.

On Tuesday, just a month after exiting her high-profile job, she was named CEO of EMed, a telehealth startup that sells weight-loss drugs.

It might seem like a right turn for an executive who's made her name selling advertising for big-name companies. Before X, Yaccarino was the head of ad sales for NBCUniversal.

But if you look closely, it's not that surprising. Yaccarino told confidants for years before taking the X job that she wanted to be CEO of a company. And despite Yaccarino being X's CEO, Musk continued to manage major parts of the company, including product design and technology. She hadn't yet gotten a full shot.

After X, landing atop a media company might have been an uphill climb after a turbulent tenure that included the social-media company suing several prominent advertisers, including Nestlé, Colgate, and Shell.

EMed, on the other hand, gives her a chance to establish her CEO bona fides outside the blast radius of Musk.

"She finally gets to be a true CEO that I don't think Elon let her be. It's an opportunity to rehabilitate her reputation," said Lou Paskalis, a longtime ad industry figure who's been close to Yaccarino.

For EMed, it's a chance for a little-known company to leverage Yaccarino's connections with business leaders and CEOs as it looks to expand.

"They're capitalizing on those relationships," Paskalis said.

EMed cited Yaccarino's time at X as an asset in announcing her hire, calling her a "hands-on visionary" whose experience will help it expand to develop employer and government partnerships.

"Her ability to forge game-changing partnerships and navigate complex markets will position the company to become the definitive global leader in population health solutions," the company said in a statement.

Yaccarino, for her part, said in the statement that she saw an "opportunity to combine technology, lifestyle, and data in a new powerful way through the digital channels that impact consumers directly in ways that have never been done before."

When Musk hired Yaccarino at X, many in the industry had high hopes for her success, given her strong relationships with the ad community. Instead, she had to spend a lot of time doing damage control for Musk, as Business Insider previously reported.

The EMed role might just be Yaccarino's chance to get what she wanted all along.

• Disney's quest to make Disney+ a streaming super app has some employees wondering about Hulu's future.
• Analysts say they expect the Hulu app to eventually disappear.
• But insiders say several obstacles stand in the way of phasing out Hulu.

Disney is on a mission to make Disney+ its one-stop shop in streaming, prompting some employees to wonder: Where does that leave Hulu?

Nine Disney streaming staffers tell Business Insider that it's become impossible to ignore the company's increasing emphasis on Disney+ over Hulu.

"Internally, the Hulu brand isn't a priority," an employee on the ads side of Disney's streaming business said.

The Mouse House has been steering bundle subscribers to the Disney+ app by loading it with most Hulu movies and shows and some ESPN content. Unbundled Disney subscribers can also watch some Hulu and ESPN shows free of charge on Disney+. But Disney+ content isn't available on Hulu.

Disney CEO Bob Iger said in May that these changes are "definitely having a positive impact" on the streamer's engagement and cancellation rate.

Disney is also making changes internally. It's discouraging Hulu-only ad buys and merging the platforms' ad servers, employees said.

Two sales-side employees said they need special permission to sell a Hulu-only ad spot, excluding certain interactive ads that only work on Hulu. They said the sales team is pushing advertisers instead to buy across both Disney+ and Hulu, as part of what one of the staffers called a "massive" companywide push "to prioritize Disney+ over everything."

And last week, Disney moved to a unified ad server for Disney+ and Hulu. This shift, known internally as "Mission Control," was labor-intensive and at times painful but necessary, the employees said.

"Everything going through one ad server makes a lot less work for everyone involved when it comes to getting ad campaigns live," the first ads employee said.

Disney's changes show the Hulu brand is now decidedly on the back burner, this person said. They viewed the shift as mostly positive and said further unification of Disney+ and Hulu would give consumers a better experience while simplifying the ad sales process.

Hulu fans' migration to Disney+ is off to a slow start, so far.

Two Disney streaming employees with access to viewer data said the overwhelming majority of Hulu viewership still comes directly from the Hulu app, not through Disney+. Hulu has centered its identity on dramas and comedies for adults and next-day TV.

Disney is seeing some progress, though: One Hulu-focused streaming employee said the "Hulu on Disney+" section has been starting to get more engagement as subscribers start to discover that they can use Disney+ as an all-in-one app.

However, the Hulu-focused employee, who's familiar with the service's analytics, said many Hulu subscribers don't pay for Disney+ and aren't necessarily interested in its family-friendly content dominated by franchises like Marvel, Star Wars, and Disney animation.

Several media analysts support Disney's direction, though, in going all in on Disney+.

Further integrating Hulu into Disney+ could save the company about $3 billion through "the elimination of duplicative technology and administrative costs," MoffettNathanson's Robert Fishman said in a mid-July note.

UBS media analyst John Hodulik told BI in July that Disney fully consolidating Hulu into Disney+ is "one of the steps they need to take to Netflix-ify their streaming business."

Disney didn't respond to requests for comment.

Impacts on Hulu's business

Although Hulu still gets most of its viewership from its stand-alone app, there are signs Disney's emphasis on Disney+ could be affecting its ad business.

According to analysts at MoffettNathanson, Hulu generated the most US ad revenue of any paid streaming service in the second quarter, thanks to its mature ads business, which launched in 2008.

However, Hulu's ad revenue fell an estimated 0.3% last quarter, MoffettNathanson said. Hulu was the lone paid streaming service that didn't grow ad revenue in the second quarter, according to the firm. Meanwhile, Disney+ saw its advertising revenue soar 67% year-over-year in that same span, MoffettNathanson said.

Despite that, Disney+ has a long way to go to catch up. Hulu's ad revenue was more than four times that of Disney+ last quarter, MoffettNathanson said.

"Hulu having slightly lower ad revenue year-over-year while Disney+ has seen a huge increase makes perfect sense to me," the first employee on the ad sales side said, considering the company's continued emphasis on Disney+ over Hulu.

Another Disney+ employee said that "eyeballs are shifting into the Disney+ interface," in line with what one of their Hulu-focused colleagues said.

Both Disney+ and Hulu have seen gradual subscriber growth, even though Disney hiked prices of each service's ad and ad-free tiers last October.

Hulu is well ahead of Disney+ in how much money it makes per subscriber in the US. Hulu brought in $12.36 per subscriber in the first three months of this year, while Disney+ only generated two-thirds of that sum. But Hulu's average revenue per subscriber has fallen in each of the last three quarters, while Disney+'s has steadily risen.

Life after Hulu?

The idea of shuttering the stand-alone Hulu service has been raised internally as a thought experiment, an employee on the business side of Disney's streaming division who had been involved in those discussions said.

"Every time we go through that in our long-range plan, these things come up," this person said. "You're looking at, 'Alright, what would happen if we did this? Could we cut this? Could we merge? What would happen?' So you do those analyses in the background, but not all of them ever come to see the light of day."

A longtime Hulu employee said that Disney's focus with streaming has been on a "unified platform." They added that Hulu's tech had "serious degradation" issues and could feel outdated, given that it's one of the oldest streaming services.

Still, one potential issue with shutting down Hulu as a stand-alone app is that it's emotionally intertwined with the brand for staffers, sometimes called "Hulugans."

"Old employees have an affinity for it," a second veteran Hulu employee said.

• Netflix is quietly searching for an exec to lead its video podcast efforts.
• The streamer is chasing YouTube, which has cemented itself as a video podcast titan.
• Podcast listening and advertising are on the rise, and media giants are investing.

Netflix is quietly searching for a podcast leader as it looks to bring video pods onto the streaming platform, two people close to the company told Business Insider.

Netflix had previously explored potential deals with podcasters as it sought new areas of growth, as BI first reported. The hunt for an exec to lead a video podcasting effort shows how seriously Netflix is taking the space.

The streamer's interest comes as rival YouTube has cemented itself as a living-room fixture and video podcasting powerhouse.

Netflix has also shown interest in creator content more broadly.

"We're really excited about 'The Sidemen' and 'Pop the Balloon' and a wide variety of creators and video podcasters that might be a good fit for us, and particularly if they're doing great work and looking for different ways to connect with audiences," co-CEO Ted Sarandos said on the company's second-quarter earnings call this month. "The Sidemen" and "Pop the Balloon" are two Netflix shows that began in the creator realm.

Netflix has not publicized a podcast lead job opening and declined to comment for this story.

One person who had conversations with Netflix said the company wanted someone who could make video-first podcasts for a big audience.

Many of today's biggest podcasts started as audio-only endeavors and later added video as audience habits changed and YouTube gained prominence. The lines between video talk shows and podcasts have increasingly blurred, and newer podcasts often now start with video in mind.

It's not clear where the podcast role would sit inside Netflix.

A second person who had conversations with the company said they believed it would sit in Netflix's TV and film licensing arm under Lori Conkling rather than the original content side. That could signal that Netflix might look to license existing shows, as it's done with some YouTube creators like preschool entertainer Ms. Rachel, as well as make original shows with hosts. Separate content-side hires could follow.

Edison Research has charted the continued rise of podcast listening. In a new report out this week, the firm said 73% of people ages 12 and over in the US listen to or watch podcasts, up from 55% in 2020.

Video is on the rise, too, with 51% of people 12 and up saying they've watched a podcast, according to Edison.

Podcast advertising grew 26.4% to $2.4 billion in 2024, according to the IAB. EMARKETER projects it will top $2.5 billion in 2025.

Other media heavyweights have made big moves to chase the podcast-listening audience and the advertising that can come with it.

In February, Fox acquired Red Seat Ventures, which produces Tucker Carlson, Megyn Kelly, and others. Amazon paid $300 million for podcast company Wondery in 2020, The New York Times reported at the time, after snapping up audiobook company Audible in 2008.

• Cindy Rose, a Microsoft executive, will become WPP's new chief executive in September.
• Insiders see Rose's tech background and board experience at WPP as assets for the role.
• WPP issued a profit warning this week, and the ad industry is beset with problems.

As advertising giants try to shed their analog roots, WPP has raided one of the world's biggest tech giants to find its next leader.

The UK-based ad giant on Thursday announced that Microsoft executive Cindy Rose, 59, will succeed Mark Read as chief executive on September 1.

Insiders and shareholders told Business Insider they were hopeful Rose would steady the ship after a rocky period.

The appointment was announced the day after WPP had issued a surprise profit warning on Wednesday, saying cautious clients were spending less and less keen on pitches.

Three company insiders expressed relief to BI that the CEO search was over just a month after Read announced in June he would exit the company after 30 years. WPP said it considered both internal and external candidates. Rose was a surprise appointment to most observers BI spoke to and wasn't on their lists of probable candidates.

One WPP insider said they were "very optimistic" about the hire, adding Rose was both a fresh face and knowledgeable about WPP, having sat on its board since 2019.

American-born Rose is a former lawyer who switched to corporate roles, worked a long stint at Disney before joining Microsoft, where she is chief operating officer for global enterprise. She is a dual UK-US citizen and will split her time between both countries, which the insider said was another plus for a company listed on both US and UK stock markets.

Her tech background would put her in good standing to lead WPP to capitalize on the newer and more profitable parts of its offering to clients, the insider added.

"She doesn't come from a 'media' or 'creative' background, so won't see the company through that lens either," the WPP insider said.

WPP chair Philip Jansen praised Rose's experience building "enduring client relationships," having led multi-billion-dollar operations. At Microsoft, she's helped large enterprises harness AI.

Jansen said in a statement her expertise would be "hugely valuable to WPP as the industry navigates fundamental changes and macroeconomic uncertainty."

A US to UK import

Rose studied at Columbia University and New York Law School before relocating to the UK.

She worked at the Allen & Overy law firm in London and later joined Disney as legal counsel for Europe.

Ian Twinn, former director of public affairs for UK advertising trade body ISBA, told BI that Rose's legal background would help her navigate the PR highs and lows of running a large public company.

"In terms of being a public affairs guy, you do rely on people with a good legal background — it makes a big difference," said Twinn, who briefly interacted with Rose while she was at Disney. "She was very receptive and very focused."

Just after the turn of the millennium, Rose became Disney's UK managing director, leading thousands of employees across film, TV, and retail, and launching huge movies like "Finding Nemo" in the market.

Andy Bird, former chairman of Walt Disney International, told BI that Rose's experience as a custodian of several different brands in her time at Disney positions her well for understanding the needs of WPP's marketer clients.

"How you stay relevant to consumers is going to be very important to WPP moving forward," Bird said.

Rose was senior vice president of Disney's Europe, Middle East, and Africa interactive media group when she left after nine years to take senior leadership roles at UK telecommunications companies Virgin Media and Vodafone.

In 2016, Rose became chief executive of Microsoft UK. Joshua Graff recalls first meeting Rose at this time, when he was UK country manager at LinkedIn, which Microsoft acquired in December of that year. They worked together at Microsoft for almost 10 years.

Graff described Rose as "direct, empathetic" and "super funny," with an ability to create energy in the teams around her.

"No doubt she will be a talent magnet for WPP," Graff told BI.

Read previously credited Rose with putting Microsoft on the map among UK business leaders and politicians. She also championed diversity, both within Microsoft and in encouraging people from different backgrounds to take up careers in tech. She will be the first woman to be chief executive of a global advertising holding company.

Bringing a touch of Microsoft to WPP

The American-accented Rose was made an Officer of the British Empire, an honor conferred by the UK government, and received it from Queen Elizabeth in 2019. Rose was promoted to become president of Microsoft in Western Europe during the pandemic and rose to her most recent position in 2023. In this role, she was responsible for helping huge blue-chip businesses understand and use technologies like AI to transform their businesses.

WPP, too, is attempting to retool its business as it looks to pick up more lucrative work than simply creating and placing ads. It's investing hundreds of millions annually in AI and other technologies as it hopes to win lucrative contracts in areas like customer-relationship management and digital transformation, areas where Rose has firsthand experience.

Matt Atkinson, former chief customer officer of The Co-Op, worked closely with Rose as the grocer transformed its tech stack, from data infrastructure to the in-store customer experience. It was a big, competitive process, and Microsoft won the pitch, beating out Snowflake, among others.

"She had created an environment where we were able to creatively and technologically collaborate for mutual benefit," Atkinson told BI.

He added she had the "technology chops, emotional intelligence, and a way of being," which made her a good choice to run WPP.

A peacemaker

Rose will join as the ad industry faces a reckoning. Economic and geopolitical uncertainty is making marketers cautious about taking on big projects and launching new brands. Meanwhile, Big Tech players are increasingly touting AI-powered tools that can create entire ad campaigns and lure eyeballs away from the sites that host the ads agencies make.

With WPP's share price hovering at lows not seen since 2009, investors will look for signs Rose is ready to make big swings to attract new business. Insiders are hoping she will boost morale after a series of restructures, layoffs, and the institution of a strict return-to-office policy that has rattled many in the internal ranks.

Claire Enders, founder of media and telecommunications research company Enders Analysis, said Rose "epitomizes the reasons women have increasingly succeeded to these roles."

"She's a peacemaker, she's very non-confrontational, very thoughtful, and she works very well in very large organizations," Enders added.

• Perplexity AI is cautiously growing its ad business.
• Its main ad product is 'sponsored follow-up questions,' and it recently introduced a perks program.
• Perplexity has a revenue share program with publishers, but its ads business is still nascent.

Perplexity AI is taking a softly, softly approach to building its ad business.

The AI company had a low-key presence at last month's Cannes Lions ad festival in France. Amid the huge multimillion-dollar beach structures erected by tech giants like Meta, Amazon, and Google, Perplexity sent just a handful of executives to meet with current and potential business partners.

Perplexity, a conversational AI-powered search engine, began testing ads last year. Brands such as Whole Foods and Indeed have bought "sponsored follow-up questions," which appear alongside an answer to a user's prompt, encouraging them to dig deeper into the topic. Advertisers themselves don't write or edit the sponsored questions, which are generated by Perplexity's AI.

It's a contrast to traditional search engine marketing, where ads typically appear before the organic results.

Speaking to Business Insider at Cannes Lions in June, Ryan Foutty, Perplexity's VP of business development, said the company is still figuring out which advertising model will work best.

He described sponsored follow-up questions as "a really incredible brand advertorial."

"It's additive because you're helping users figure out the next question they need to ask to make a better decision or figure out what they're trying to do versus just trying to put something in your face," Foutty said, adding that 40% of its users click on related questions.

Perplexity advertisers pay on a CPM, or cost to reach a thousand impressions, model. A Perplexity spokesperson said advertising currently comprises less than a tenth of a percent of the company's total revenue, and declined to comment on the company's current ad prices.

In recent weeks, Perplexity has also introduced a perks program, where it provides subscribers to its Perplexity Pro service with offers and discounts from brands including Turbotax, the smart ring company Oura, and hotel booking service Selfbook.

Both Perplexity ads and perks are only active in the US. Foutty said the company was also considering more ways to monetize Perplexity's shopping and travel booking features, which could theoretically include further ad formats.

"It's very manual today," Foutty said, "But when we find something that works for everyone, then it's very easy, naturally, for us to scale it."

Perplexity hasn't released its user numbers, but its CEO, Aravind Srinivas, said the company received 780 million queries in May, up 20% from April. But compare that to Google's AI Overviews, which the search giant said reached 1.5 billion monthly users in May. Google recently brought advertising to more areas of its AI Overviews product, and it's testing ads within its AI Mode, a newer feature where users can conduct deeper research.

With its relatively small scale and only one specific ad format available, Perplexity's advertising offering is only getting tepid interest from marketers for now, said Eric Hoover, director of search engine optimization at the digital marketing agency Jellyfish.

"I don't see strong adoption by users," Hoover told BI. "People rarely click out of 'regular' AI results; I don't see them being eager to click on sponsored ones."

Perplexity wants to build 'long-term incentive' deals with publishers

Perplexity shares a portion of its ad revenue with the publisher partners it uses to help source its answers, which include Time, Fortune, and Der Spiegel.

The company doesn't cut up-front licensing deals with these publishers because it isn't building foundational large language models that require content for training, Foutty said. It does offer these partners access to its enterprise product and APIs that can help publishers embed Perplexity's tech, like conversational search, into their own sites. (Disclosure: Business Insider's parent company, Axel Springer, has a multi-year content licensing deal with Perplexity rival OpenAI.)

"The model that we're creating on the revenue share side is a long-term incentive," Foutty said. "It's not a one-and-done."

When asked whether any publishers were making serious money from the program, Foutty said it was still early days. The publisher program launched in June of last year.

"We're focused on building the right product before we scale it to everyone," he added.

The relationship between AI companies and publishers can often be fraught, and many are locked in legal battles. Rupert Murdoch's Dow Jones and the New York Post filed a lawsuit last year alleging that Perplexity engaged in copyright infringement by scraping and using their content. Perplexity said last year that the facts alleged in the complaint were "misleading at best" and that it planned to defend itself.

This week, the content delivery network and security provider Cloudflare announced it has begun automatically blocking AI crawlers from scraping the websites it powers unless site owners explicitly opt-in or the AI companies pay.

• "Apple makes great ads" is a thing people used to say all the time.
• New thing people say: "Apple keeps pulling its ads. What's up with that?"
• No seriously. What's going on?

Apple is justifiably famous for its marketing.

You could even argue that the company's ad campaigns are as well-known as its products: Think Different. Dancers with iPods. And, of course, the 1984 Super Bowl ad for the Mac.

But now, for some reason, Apple is developing a different reputation in adland: the company that pays for ad campaigns and then pulls them.

Last year, Apple rolled out an ad for its iPad Pro and then apologized and yanked it, after online complainers complained that the vibes were off.

Earlier this spring, Apple axed an ad promoting an AI-powered version of Siri, once it became clear that version of Siri wasn't going to be available for some time.

And now Apple has disappeared another ad campaign, though I don't have any idea why.

This one features Martin Herlihy, the "Saturday Night Live" writer and actor — he's part of the "Please Don't Destroy" troupe that specializes in pre-recorded videos, like this one with Taylor Swift. And the premise is that he's going to teach kids how to convince their parents to buy them a Mac for college. The campaign also came with a kinda clever "Parent Presentation," which you could theoretically download as a PowerPoint and customize in order to close the sale with mom and dad.

The ad went up on YouTube and Apple's site last week, and then disappeared in the last few days.

But you can still see it, for some reason, on the site we used to call Twitter.

I've now watched this thing a few times, and I can't imagine what part of the ad offended or worried someone in or outside of Apple. (And yes, I've asked the company.)

If you love conspiracy theories, you could imagine that maybe this is actually a galaxy-brained viral campaign, and that Apple pulled the ad so typers like me would give them free publicity by typing about it. The way some political campaigns will make an incendiary ad that's designed to generate coverage, even if it only runs once.

But I'm not a big conspiracy theory person — the truth is usually much dumber than the theory. And in any case, this doesn't seem like Apple's style, at all.

So. You tell me: What's happening here?

• AI and sports were hot topics du jour at the ad industry's annual confab, Cannes Lions, this week.
• The bustling streets suggested AI isn't decimating the ad industry yet.
• Brand safety was the elephant in the room.

The scorching hot sun is setting on advertising's annual shindig in the south of France, Cannes Lions, for another year.

At the sprawling event, there was a level of thematic whiplash. In the span of an hour on the main stage in the Palais you go from hearing about the creation of the iconic Snickers "You're not you when you're hungry" campaign to hearing a speech from human-rights activist Sonita Alizadeh on the humanitarian crisis of child brides in Iran and Afghanistan.

There was also a whole lot of partying. Spotify's beach concert stage hosted rapper Cardi B and indie rockers Royel Otis. Diplo was spinning the decks for Yahoo. Talent agency UTA's annual VIP "dinner" at the luxury Hôtel du Cap-Eden-Roc had no sit-down meal but instead a punchy set from comedian Sebastian Maniscalco.

Business Insider was on the ground — and occasionally the yachts — to get the inside look on the big topics that are top of mind in an industry undergoing seismic changes. Here were the key themes.

The AI of it all

If the advertising industry is losing people to artificial intelligence, it certainly didn't look like it at Cannes this week. The streets were bursting with lanyard-wearing, hungover Lions attendees trying to figure out which opulent branded beach setup their next meeting was located. Still, AI was the talk of the town.

With AI spinning up thousands of ads cheaply and in seconds, the business model of billing clients for time is under threat. Meta CEO Mark Zuckerberg ruffled feathers ahead of Cannes when he said AI will essentially automate the ad business.

"You tell us what your objective is, you connect to your bank account, you don't need any creative, you don't need any targeting demographic, you don't need any measurement, except to be able to read the results that we spit out," he said in a May interview with the tech newsletter Stratechery. (Is that the sound of Don Draper dropping his glass of rosé, we hear in the distance?!)

In an interview with BI, Meta's chief marketing officer, Alex Schultz, said his boss was talking about small businesses, not Fortune 500 brands.

"I don't see myself fully automating my ad campaigns and not using my agency at any point," Schultz said.

(Donny D! Come back, you're safe!)

For all the promises of AI, advertising still appears to be a people business. Cannes showed people in the ad industry believe that relationships matter. It's how attendees convince the finance department back home that the $5,000 festival pass, flights, Airbnb, meals, and a 2 a.m. expense receipt for a Jéroboam of Rosé at the Carlton Hotel was all worth it.

Marketers are racing to sports

If you haven't got an F1 sponsorship deal, are you even a CMO in 2025?

Sports was a pervasive theme at Cannes Lions this year, and athletes were out in force. Take a stroll down the famous — and exceptionally hot — Croisette promenade, and you had a good chance of bumping into tennis champ Serena Williams, McLaren Racing driver Oscar Piastri, or Kansas City Chiefs tight end — and Taylor Swift beau — Travis Kelce. Advertising company Stagwell's "Sport Beach" had some of the longest lines in town, some for the star-studded panels, others for the bragging rights of trouncing a colleague at pickleball. (Disclosure: BI hosted an event on Sport Beach, too.)

With traditional, or linear, TV viewing in decline, sports is one of the last destinations where marketers can guarantee getting their brands in front of large audiences.

"It's a way of being involved right in the moment, live," Michael Lacorazza, CMO US Bank, told BI. US Bank is involved in numerous teams and recently announced its partnership with the Premier Lacrosse League.

It's not just about placing 30-second spots or slapping logos on jerseys. Marketers talked up how they're enhancing the live experience in stadiums while people are in a joyful mood. Uber Advertising was pitching clients using a case study from beauty brand La Mer, which sponsored rides to and from the Miami F1 Grand Prix, stuffed with skincare goodies.

F1 is having a moment. According to the research firm Ampere Analysis, sponsorship spending on F1 and its teams is expected to reach $2.9 billion this year, up 10% on 2024. With viewership boosted in part by the popular Netflix series "Drive to Survive," brands and media partnerships are helping extend its reach beyond the race track.

"Seeing the new fans come into the sport, we needed to show up in their worlds and be meaningful in their worlds," Louise McEwan, chief marketing officer of the McLaren Racing F1 team, told BI. "Only one percent of fans ever go to the track in their lifetime."

Putting consumers in charge

The power of the consumer is stronger than ever.

At the Tubi cabana at Cannes, we spoke with its chief marketing officer, Nicole Parlapiano, who shared how the streaming platform is super-flexible in how it's marketing its titles. Streamers like Tubi can't easily test shows and movies before they acquire them, so they relentlessly monitor social chatter to determine how much and where to market a show, Parlapiano said.

Daniel Lawrence Taylor's hit show "Boarders" got a billboard in New York City's Times Square. And that's down to Parlapiano's team being flexible, pouring extra marketing dollars into "Boarders" after seeing the social media reaction, she said.

Laurie Lam, chief brand officer of E.l.f Beauty, said at a BI event that its product pipeline is often driven by what consumers are saying on social media.

"They're telling us exactly what they want and we're then putting it into the market for them," Lam said.

"And they're not polite about it, by the way," she added. "It used to be like, 'Hey, I would really love it if you can make this primer.' Now it's like, 'Make that primer now. Where is my primer?'"

Brand safety becomes a brand risk

Amid all the talk of AI supercharging creativity, and humanity being the ad industry's "super power," there was a big topic execs on the Croisette went super out of their way to avoid.

People noticeably squirmed as we asked questions about the current debate around brand safety — a catch-all industry term to describe how advertisers avoid platforms and media that don't align with their brand. A few years ago, you couldn't move for panels on the topic at Cannes, with speakers calling on big platforms to do more to protect brands. This year, with the US government questioning the propriety of those decisions? Crickets.

Barely anyone at Cannes wanted to discuss this enormous elephant in the room. Even the term "brand safety" has become a kind of Voldemort, "He who should not be named" word. One exec told us that the industry is more comfortable talking about "brand assurance" instead, whatever that really means in practice.

Perhaps nobody wants a target on their back. The turnabout shows how Cannes Lions holds a telling mirror into the industry, where sometimes what's not being talked about can also speak volumes.

• An AI-generated ad for Kalshi, where you can bet on real-world events, aired during an NBA Finals game.
• PJ Accetturo, a self-described AI filmmaker, described his process for creating the ad.
• Here's how he used Google's Gemini chatbot and Veo 3 video generator to make the "most unhinged" ad.

A farmer floating in a pool of eggs. An alien chugging beer. An older man, draped in an American flag, screaming, "Indiana gonna win baby." The chaotic scenes are all part of a new AI-generated ad from sports betting marketplace Kalshi, which aired Wednesday during Game 3 of the NBA Finals.

"The world's gone mad, trade it," the commercial's tagline read, following the 30-second collection of surreal scenes.

In a recent thread on X, the ad's director explained how he made the clip for just $2,000.

"Kalshi hired me to make the most unhinged NBA Finals commercial possible," PJ Accetturo, a self-described AI filmmaker, wrote on Wednesday. "Network TV actually approved this GTA-style madness."

Accetturo said he made the ad using Veo 3, Google's latest AI video generator. A Kalshi spokesperson confirmed to BI that the company hired Accetturo to make the ad and that it was generated entirely using Veo 3.

"Kalshi asked me to create a spot about people betting on various markets, including the NBA Finals," Accetturo wrote on X. "I said the best Veo 3 content is crazy people doing crazy things while showcasing your brand. They love GTA VI. I grew up in Florida. This idea wrote itself."

He said that he started by writing a rough script, turned to Gemini to generate a shot list and prompts, pasted it into Veo 3, and made the finishing touches in editing software.

To write the script, he said he asked Kalshi's team for pieces of dialogue they wanted to include, then thought up "10 wild characters in unhinged situations to say them." Accetturo said that he got help from Gemini and ChatGPT for coming up with ideas and working them into a script.

A screenshot he posted of this stage of his process showed dialogue like "Indiana gonna win baby" and "I'm all in on OKC" alongside characters like "rizzed out grandpa headed to the club" and "old lady in front of pickup truck that says 'fresh manatee' in a cooler behind her."

Accetturo said he then asked Gemini to turn every shot description into a Veo 3 prompt.

"I always tell it to return 5 prompts at a time—any more than that and the quality starts to slip," he wrote on X. "Each prompt should fully describe the scene as if Veo 3 has no context of the shot before or after it. Re-describe the setting, the character, and the tone every time to maintain consistency."

Accetturo said it took 300 to 400 generations to get 15 usable clips.

"We were not specifically looking for an AI video at first, but after getting quotes from production companies that were in the six or seven figure range with timelines that didn't fit our needs, we decided to experiment, and that's when we made the decision to go with AI and hire PJ," the Kalshi spokesperson told BI. "Given the success of this first ad, we are absolutely planning on doing more with AI."

The spokesperson said the video went from idea to live ad in three days, cost roughly $2,000 to make, and is on track to finish with 20 million impressions across mediums.

Accetturo told BI that he was "paid very well for the project" and now makes a "lot more as an AI director" than he did for live action contracts, which often involved weeks of work before and after the shoot compared to the few days the Kalshi ad required.

"The client got an insane ad for a great rate on a blistering timeline, and I got paid really well, while working in my underwear," he said.