Perplexity reveals its ad monetization plans
Perplexity reveals its ad monetization plans
Plus: ChatGPT is stealing jobs, Instagram finally solves a UX issue, Apple Intelligence is going viral
Hi product people đ, Rich Holmes here with the weekly briefing. I hope youâre well!
Coming up this week, we take a look at how Perplexity plans to monetize - and differentiate - its ads offering from traditional search.Â
Plus, as the AI coding startup space starts to get a little saturated, a new startup raised $150 million this week with its alternative approach to software development that puts designers and PMs center stage. And Instagram finally solves a UX issue that a lot of us find extremely frustrating.
As always, if you prefer to listen or watch this, you can watch the briefing on YouTube and if you like this, hit the like button or leave a comment.
Enjoy the rest of your week!
Key reads and resources for product teams
New from the Department of Product Substack this week
Deep - New AI Assistants and Agents Explored
How top companies like LinkedIn, Atlassian, Webflow, Slack and more are building new AI assistants and agents to transform user experiences. Understand the key differences between AI assistants and the emerging âagentic AIâ trend, learn How Slackâs internal engineering assistant will save engineering teams 10,000+ hours annually.
Analysis - Why did Stripe spend $1.1bn on a stablecoin business?
Crypto markets are surging this week, but most US citizens donât trust cryptocurrencies. In this analysis, we explore what stablecoins are and more importantly - what Stripeâs acquisition could mean for product teams and the payment industry. Why product teams should care about stablecoins: scenarios explored from the perspective of B2B SaaS, ecommerce and B2C products. (Department of Product)
Design - How to build design systems for the AI era
In an AI-first design system, verbs and actions take on a new level of importance. Weâre designing for interactions that go far beyond âclickâ or âdragâ; weâre creating interfaces that support verbs like âsummarize,â âautomate,â âcreate,â and even more nuanced actions like âmake it friendlierâ or âgo deeper. Microsoft explains how its building its new design systems for the AI era. (Microsoft Design blog)
Skills - Rituals for great product decision making
Codaâs CEO shares 4 rituals for great decision making:
Asking the Right Questions
Following the Right Decision ProcessÂ
Choosing the Right Forum
Engaging the Right Stakeholder
(Codaâs CEO via LinkedIn)
Strategy - A Masterclass in user activation
According to Headspace, 96% of their users feel less stressed after using the app. Their sign-up flow is a masterclass in how to set a goal, control the narrative and create the perception of success. (Built for Mars)
New product features and innovation this week
A new startup called Tessl has entered the AI coding space race. This week the company announced it has raised $150 million for its coding tool. But the big difference with Tessl is its target segment; instead of strictly targeting engineers, it is also designed to help other product team members (product managers, designers) build applications by simply writing up specifications. They call this approach âspec-driven developmentâ and the idea here is that specs are written and maintained to create software with direct edits made to the specs, rather than the underlying code. Watch some examples here.
MeanwhileâŚ
A new demo from Google has leaked on social media which shows a new type of âconversational Searchâ where users ask follow up questions and get updated answers. It continuously listens to your voice and updates answers accordingly. Itâs not clear if this will ever make it to market but Google is clearly doubling down on experimental approaches to search in the face of competition from Perplexity and others.Â
Perplexity's CEO also confirmed this week that they're planning to introduce ads that will take a slightly different form: ads will appear as sponsored follow-up questions, rather than within the answer itself. âWe would rather give brands a transparent way to advertise through Perplexity that â rather than attempting to manipulate answersâ, the CEO said. This certainly feels like a more palatable, less invasive approach to ads and itâs definitely subtle than traditional ads which embed themselves directly in search results. But is this approach possibly a little too subtle? Letâs see how it works out.
Snowflake has unveiled what it calls âdata agentsâ - a series of autonomous agents designed to help folks without SQL skills get the data they need. Agents can extract data from multiple sources including databases, APIs and Google Workspace and then query it using natural language.
In other newsâŚ
Instagram has rolled out a subtle - but important - UX improvement: the app will no longer automatically refresh when you open it, unless a user scrolls down. Hurrah. Even Instagramâs CEO Adam Mosseri admitted he found this very annoying during a live Q&A.
DeepL has launched a new AI translation service which targets B2B clients and allows users to have real-time conversations with each other in different languages. Itâs currently only supported by Microsoft Teams but it could eventually be rolled out to Zoom and Google Meet. The feature essentially enables businesses to talk to each other in real time in different countries - which could fuel international growth. B2C companies like Spotify, like Reddit are leaning heavily into international markets to fuel their growth. B2B products may be next to follow suit if sales teams are able to speak to each other with real time translation capabilities.Â
YouTube is testing a new feature that will let creators use AI to ârestyleâ licensed songs for their Shorts.
Apple has started rolling out its Intelligence features and theyâre starting to go viral - for all the wrong reasons.Â
Tools you can use
Blurs lets you blur out specific parts of your screen when youâre screensharing or recording.
Raycast Notes is a âfrictionlessâ note-taking experience specifically designed for engineers and product designers which works with native shortcut extensions for products including Spotify, Linear, Slack, Google translate and more.
Butter combines the power of Miro engagement with the simplicity of Google Slides to help you create engaging presentations.
đ Product data and trends to stay informed
The impact of ChatGPT on jobs is already being felt. A new study found a 21% decrease in the number of job posts for automation-prone jobs related to writing and coding compared to jobs requiring manual-intensive skills after the introduction of ChatGPT.Â
Writing jobs were affected the most (30.37% decrease), followed by software development (20.62%) and engineering (10.42%). Within a year of introducing image-generating AI tools, demand for graphic design and 3D modeling freelancers decreased by 17.01%. The figures are a pretty stark eye opener for folks who suggest that AI will augment - rather than replace - jobs done by humans.
Gen-Z now make up around 40% of all mobile users. According to new analysis, the top 3 apps used by Gen-Z are Temu, TikTok (which is also preferred as a search engine over Google) and YouTube.Â
VR funding has slumped to just $758 million this year so far down from almost $4 billion in 2021. 2024 is on track to become the lowest annual total for VR funding so far.Â
TikTok revenue increased 60% to ~$17bn in the first half of 2024, which makes it around half the size of YouTube.
Europeans spend 575 million hours per year clicking on cookie banners.Â
Spotifyâs latest earnings have impressed investors. Monthly active users grew 11% to 640 million and paying subscribers increased 12% YoY to 252 million, helping the company achieve revenues of 4 billion Euros, up 19% on the year. Internationalization played a key role in its growth with the rollout of AI DJ in Spanish and Daylist which is now supported in 14+ languages.
48% of workers say they feel uncomfortable telling their manager that they use AI.
Other product news in brief
đ OpenAI has lost another safety leader, Lilian Weng
đŚ Klarna is preparing for an IPO in New York - snubbing European alternatives
đ˛ Square parent company Block is scaling back its investment in TIDAL
đ¤ Big tech is reportedly struggling to build more advanced AI
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