I keep hearing the same thing from business owners lately. They’re doing the SEO work. They pay someone to keep the website in shape, they rank decently on Google, and they still don’t show up when someone asks AI for a recommendation. The competitor down the street does. (I’ve written about that gap before.)
If that sounds familiar, Google’s latest earnings report explains a lot of it.
Google told Wall Street the quiet part
On October 28, Alphabet reported its third quarter numbers. Revenue came in at $127.6 billion, a little under the $128.2 billion analysts expected, and the stock dropped about 10 percent after hours, according to Reuters.
Search was the sore spot. It still grew 12 percent, to about $63 billion, but that was less than Wall Street wanted. On the earnings call, Google’s chief business officer Philipp Schindler said something I didn’t expect to hear out loud: “the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”
More people are getting their answers from Google’s AI, and Google makes less money on those answers than on the old page of ads and links. Schindler said currency swings were the biggest factor, so AI wasn’t the only reason. But it made the list.
People are still searching. They’re just not clicking.
Google search is busier than ever. The company says searches grew faster this quarter than at any point in the last five years, and its AI Mode passed 1 billion monthly users this summer.
What’s changing is what people do after they search. AI Mode questions run about three times longer than a normal search. People ask the whole question, read the answer, and a lot of them never click through to a website. We wrote about how much AI Overviews cut clicks back in May. Now it’s showing up in Google’s own numbers.
So think about where your customer’s eyes land. If the top of the page is a written answer, the businesses named in that answer get noticed. Everyone else is further down the page, where fewer people look.
So who gets named in the answer?
For local questions, Google’s AI leans hard on Google’s own data. A Steady Demand study of about 4,000 AI Mode searches across 50 US cities found that 80 percent of the local citations pointed to Google Maps and Business Profile pages. Only 13 percent pointed to the business’s own website. For dentists, the Maps and profile share hit 88 percent.
Rankings still matter too. A UK study of AI Mode answers found businesses in Google’s local top three got named 54 percent of the time. Businesses ranked 11 through 20 got named just 8 percent of the time. The businesses that got named also had more than twice the reviews, a median of 140 against 61.
Please don’t cut your SEO budget over this
I get the temptation. If AI is where search is headed, why keep paying for SEO? Because the AI answer is built on the same things your SEO already works on: rankings, reviews, your Google profile, and a website that clearly says what you do. Cut those and you shrink your chances in both places.
When I look at businesses that do SEO and still don’t show up in AI, the gap is usually one of these:
- A Google Business Profile that’s only half filled out
- Reviews that stopped coming in a year ago (here’s why that matters more than you’d think)
- Service pages that list what you do but never answer the questions customers actually ask (how to fix that without a developer)
- Nobody checking what AI actually says about the business (how to measure it)
Keep the SEO going. Add these on top of it.
Ads are coming to the answer too
Google says it’s adding more ads to AI Mode and rolling them out to more countries. For now, the businesses that get cited have that answer mostly to themselves. As more ads roll in, they’ll be sharing that space.
If you’re doing the SEO work and still not showing up when people ask AI, I’m happy to look at it with you. Book a free 30 minute call below and I’ll tell you what I see.