Perplexity, the generative AI search engine, is planning to implement brand-sponsored queries as follow-up suggested questions to ongoing AI conversations. These related questions, which account for 40% of Perplexity’s queries, will allow brands to influence users towards specific products. The AI engine will launch suggested sponsored queries in the upcoming quarters, marking a new approach to using ads in AI conversations. This move comes as the rest of the generative AI industry is moving towards a “freemium” model, offering a free version with the option to upgrade for a monthly cost.
The cost of running AI chatbots is currently high, with each query costing up to 10 times more than a traditional Google search. Companies like OpenAI, which was paying $700,000 per day last year, are looking for ways to monetize free queries to ensure sustainability. Perplexity offers both a free and paid version, positioning itself as an “answer engine” that combines AI chat and search functionalities. With investors like Jeff Bezos and former YouTube CEO Susan Wojcicki, Perplexity has a valuation of $522 million as of January.
Perplexity differentiates itself from competitors like ChatGPT by integrating AI chat with search links and images, as well as linking to external sources like Reddit posts. It advises users to double-check information from its answer engine and acknowledges that the introduction of advertising will require users to filter the answers they receive. The move to integrate brand-sponsored queries will provide a new avenue for companies to promote their products through AI conversations, potentially influencing user decisions.
As the technology and systems behind generative AI improve, the cost of running AI chatbots is expected to decrease over time. However, companies will need to find ways to sustainably monetize free queries to cover operational expenses. Perplexity’s approach to incorporating ads in AI conversations represents a novel strategy within the industry, offering brands the opportunity to steer users towards specific products. The development of brand-sponsored queries in Perplexity’s ongoing AI conversations marks a significant shift in the monetization of AI technologies.
