Search Engine vs Answer Engine, Marketing & Advertising News, ET BrandEquity
Google has become the single most important gateway to information in our times. It revolutionised how we access knowledge and navigate the world. Being the most widely used search engine is just a part of its vastly bigger footprint in the digital world.
In 2023, world advertising revenues reached the US$ 1 Trillion mark, of this, roughly $700 Billion was digital advertising. Within this ,if you sum up and keep aside the China trio – TikTok, Tencent, Alibaba and then count advertising revenues for Amazon, X, LinkedIn, Snap and Pinterest altogether, even then roughly $400 billion was left to be divided between Alphabet and Meta.
This is why disruption is such a lucrative deal.
Google is an advertising powerhouse, such as the world has never seen before. This allows it to drive innovation and technology, technology, AI, and data analytics. The information organisation it has created spans education, e-commerce, services (Gmail, maps, photos, etc.)
Its promise of allowing easy means for a diverse range of businesses to reach their intended target audiences is reliant on driving eyeballs to search results. Now, that near monopoly status may be challenged by a fledgling boot strap organisation with an employee strength of 35 working working out of a shared office facility on San Francisco‘s market Street.
Is this the stuff of Silicon Valley legend? Perhaps yes. Only time will tell. But it is HOW they have challenged Google that points to a tectonic shift under way, entirely enabled by AI.
When I search for “ Shubhranshu Singh” in Google, I get familiar output – popular articles, LinkedIn site, an assortment of recent images, related search output in links, et cetera. But, when I search at Perplexity, I get a very neatly parsed out result with self prompted sections. The articulation, summarisation, and cogent packing of the information is a wow experience. This is why perplexity is winning. User experience,ease, finesse and delightful specificity.
Only 18 months from launch, it is a product on fire. Gen AI was first experienced on scale via chatGPT and its manifest conversation ability.
Perplexity is now taking that to the core of the digital universe – search.
Think of it like this – when hungry, Google gives you directions to a field of potatoes; perplexity gives you a carton of Pringles.
To be fair chatGPT, meta AI and perplexity – and there are more – are all examples of AI native modalities that have disrupted search of late.
Gartner projects that traditional ‘blue links’ search will drop by 25% by 2026. That is a quarter out of the $300 billion ripe for the picking.
Already, Perplexity is on the verge of acquiring Unicon status even whilst it is finalising the C round of Funding
Google is taking meaningful action. In mid May it first announced the roll out of a retooled search engine that will frequently favor responses crafted by artificial intelligence over website links. At first live in the US , with search results that had goof ups as well, hundreds of millions of people will start to periodically see conversational summaries generated by the company’s AI technology at the top of the search engine’s results page.
It’s Google’s technology that determines if an AI summary will be the quickest and most effective way to satisfy a user’s curiosity
To set things in context and remind ourselves of the warp speed of development – open AI only released the public version of ChatGPT in end 2022. Aravinda Srinivas – Co-founder and CEO – of Perplexity was a researcher at open AI till 2021. He worked on the image generator, Dall – E3
In 2022, he linked up with AI maven Dennis Yarats (formerly of Facebook) , Andy Konwinski Co-founder, data bricks and top programmer, Johnny Ho.
These four partner joined hands to launch Perplexity.
Often, when one door gets shut, another opens. The quartet were keen on a B2B enterprise search offering, but soon realise the top corporations would not let them anywhere near owned data. So, they went to the public internet and soon were ready with what they brilliantly termed as the “answer engine”
Perplexity AI was launched in December 2022 – just weeks after Chat GPT.
Coming to the impact – Google perforce has to stick to keyword search. One cannot kick the ladder one is standing on. No one has a ready model to monetise conversational search. But only Google has so much to lose.
It is important to recap the process: advertisers bid on commercial queries or keywords. They bid for how much would be paid upon the ad being clicked. Google then directs the traffic. Sponsored links get presented in your search feed based on relevance and the bid amount. Such presentation has therefore become a filtered and presentation. Relevance is not evident, except that one gets to see “sponsored links”.
In 2023, search linked advertising revenues totally $175 billion for Google. Google’s enterprise evaluation is more than $1 trillion.
There is another weighty consideration for Google forcing it to think hard about adopting AI search. The issue is that publishers will get stranded. For Google its status as a gateway is as important for its business model as providing the best results.
And then there is hope. Others have tried disruption in allied areas and failed. This includes Neeva, inflection AI, etc.
In net terms, while the disruptors have the potential to disrupt , Google may have challenges to resurrect its Ad model once that happens.
Perplexity’s model is currently subscriber based charging 20$ per month for the full stack pro option. There is currently zero revenue. A Netflix like evolution of the revenue pie seems quite likely.
Finally, when technology arrives, marketing must do what it can to make the new familiar. Awareness and consideration – the two horses of customer acquisition – must do the trick for publicity.
If Perplexity as a brand becomes synonymous with AI search, El Dorado may finally be found.
Artificial general intelligence has now emerged fully into global public consciousness. Till date, its presence is guided or even controlled by leading tech corporations.
There is massive existing business that stands ready to be disrupted. Of these Google with its near complete control over search has the most to worry about.
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