Should You Stop Paid Search for AI Optimization?

NOTE: This blog is a transcript from a podcast and therefore may contain errors.

Shannon Allen: Welcome to Digital Marketing ROI. I’m Shannon Allen, your host, and I’m joined by Krystal. How are you doing?

Krystal Vivian: I’m doing great, Shannon. How are you?

Shannon Allen: I’m good. We’re almost to the witching hour. My beautiful Zoom screen… Do you like my Halloween-

Krystal Vivian: I do … decorations? I like your pumpkins, and it just, it looks very spooky and cozy and fun.

I love Halloween. I’m very excited.

Shannon Allen: I do, too. I got word today that there… my house has been TP’d twice now, What? Yes, in the last six months.

Krystal Vivian: Oh, my

Shannon Allen: goodness. That’s what you get when your daughter’s a freshman in high school, I got word from one of Ava’s friends that there might be a plan to TP my house for a third time on Halloween evening.

Krystal Vivian: Oh, my goodness. So are you gonna sit out there in the dark and wait-

Shannon Allen: Oh, yeah …

Krystal Vivian: for them

Shannon Allen: and scare them? Oh, yeah. I’m gonna pay somebody to wear a Jason mask. Yeah. And I already looked up Walmart, and I’m gonna have sirens go off from a motion- Yeah … point. So yeah, ’cause I have cameras up, but I don’t have them on the side of my house, which is where most of the trees are from a…

My house has a lot of pine trees, right? So-

Krystal Vivian: Yeah …

the one trees they can do are on the side, and they got it pretty good last time. So yeah, I’m gonna scare those little kids. When I say little- teenagers … that’ll be fun.

Shannon Allen: Yeah. It’ll be a Halloween- Halloween event.

I’d rather they just leave me alone, but So yeah, that’s always coming up

Krystal Vivian: Yeah this time

Shannon Allen: So yeah, today we’re gonna talk about how search is changing in 2027, Really about why the old SEO is being replaced.

Krystal Vivian: Yes,

Shannon Allen: and how AI recommendations are now in place, and that SEM really isn’t going anywhere.

Krystal Vivian: No. No, it really isn’t. And I feel like we’ve been talking about this off and on throughout the year, but as AI grows and evolves, and very quickly, It’s not just how AI is evolving, it’s about how people are using AI that’s evolving. And all of that changes what we do in digital marketing.

Let’s start off by just going really broad. What’s actually changing in how people find local businesses online?

Shannon Allen: Right off the bat, people are getting answers without clicking, right?

We are in a no-click era, 68% of US Google searches ended without a click in early 2026, so we know that’s only has grown, as we’re rounding out 2026. AI overviews show up on more than 20% of searches, and when they do, clicks drop by nearly 60%, which is huge.

And then people are asking AI who to call, right? The share of consumers that are using AI to find a local business went from 6% to 45% in one year. But very much again, they’re very location-driven and where they are at, The way that consumers search, some AI is being used more than others, right?

Krystal Vivian: Yes.

Shannon Allen: And then AI is now the third most used way to find a local business behind Google and Facebook. It goes Google, then it goes Facebook, and then it is AI when it’s about finding a local business.

Krystal Vivian: Yes.

Shannon Allen: Does that surprise you at all?

Krystal Vivian: No, because that’s what I do, and I think that’s what my extended family does.

Most of them are using ChatGPT. I use Google still but will go through the AI overview answers, and I use Claude, obviously. That’s our AI of choice here at FDS, but I use Claude to look up information or to ask about who to recommend for this service. I wanted to see a dermatologist for, and I was like, “What dermatologist specializes in this condition?” And so it doesn’t surprise me at all. I think people are doing that.

Shannon Allen: What I want our listeners to realize is that what we’re talking about, where it’s really affecting search more than ever before, has a lot to do with mapping and locations, okay?

So there are so many different levels, like what you’re talking about with Claude and the research you’re doing, you weren’t asking specifically, “Where’s my dermatologist to go to?” You were doing your research. So take that aside, and let’s just talk about location. So to me, the big takeaway is where AI is really making a change in search is more about SEO and the way that mapping comes up, right?

I’m not saying it’s only, but as we talk about this and the changes in search alone, the big changes have really come out of name, address, and phone number, right? To make sure people know where you’re at. And even a year ago, the way maps came up versus the AI-generated information, it’s changed and evolved the way the search page looks, right?

Krystal Vivian: Here’s a better example that I should have used that’s more recent. Last week, I was in New York City, and we were ready for lunch. So I opened up Claude and I said, “Hey, Claude, we just left MoMA. We’re looking for lunch. Where should we go? This is the kind of food that we like, but we want something within a five-minute walk of here because then we’re gonna leave and take the subway across town to go somewhere else.” And Claude came up with name, address, phone number of several different businesses, but then checked itself on different- on some businesses that, “Oh, this place might be closed,” or, “This place has…

This place has good reviews,” things like that. It was very helpful.

Shannon Allen: Yeah. And that kind of takes me to part two of this is think of some of that as very much location driven.

And then think of this. The reason for some of this, this AI recommended, is your customer may never see your website if they don’t need to, right?

They see what AI says about you, which brings us to very much how do you become AI recommended, right? So let me ask you a question here. So in 2026, you were a huge part of the evolution of what we grew at FDS, which is we built out a package with things that we already had in-house, but we called it AI Location Concierge.

So from the campaign side of of that, why don’t you explain what this actually means for a client?

Krystal Vivian: Yeah. So what we found is, it’s really more about how do we optimize a business for AEO and GEO, which is the new SEO. It’s answer engine and generative engine. When people are asking Google and getting an AI overview answer or when they’re asking Claude or ChatGPT, is your business going to be recommended?

And we base this on three signals that really matter to AI. One is location, your name, address, phone number, making sure that is accurate. One is your reputation. So what are people saying about you online, especially on your Google Business page? What reviews are people leaving you online? And then the third is when people are doing deeper research or asking specific questions- ChatGPT and Claude and Google AI Overviews are pulling information from business websites.

And if your business doesn’t have information that is helpful to consumers on its website, your information is not gonna come up. You’re less likely to be recommended. And so we put together our location concierge services, which covers the location, the name, address, phone number, and the reputation, and then layered in our AI answer blogs, which is AI-optimized content for AEO and GEO that we write and publish on a business’s website, so that when somebody asks, “Where’s the best place to get an oil change for my Nissan Murano?”

That your dealership comes up, and that your dealership is able to answer specific questions For that consumer.

Shannon Allen: I think you said something that I wanna clarify for our listeners. You talked about, number one is your name, address, and phone number. Why don’t you explain a little deeper, how do we do that through directories?

Because I think not every business owner understands how… the value of being, what directories are and how there’s so many of them and how there are so many that could be inaccurate.

Krystal Vivian: There’s dozens that could be inaccurate, potentially- Thousands- … hundreds plus- … yes. Yeah.

Depending on your business, ’cause some directories are specific to a certain business. Yes. So a lot of people think- Yes … if it’s correct on my website and correct on Google and correct on Facebook, then I’m good.

Shannon Allen: Then I’m good, yeah.

Krystal Vivian: Absolutely not. So AI is looking for pattern recognition, and they’re looking on how your business is listed on yp.com and on Yelp and on easylocal.com and and,

Shannon Allen: and we- I don’t-

hundreds … I’m sorry. I don’t mean to interrupt you, but we talk about hundreds, but the part we don’t always talk about is some of those hundreds that we use, other smaller ones are being powered by those hundreds. Yeah. So it could end up- Yeah,

Krystal Vivian: was getting to

Shannon Allen: that … being thousands, right?

Krystal Vivian: Yes, 100%. That’s what I was getting to. You have to get all of your information and make sure that it’s accurate on these websites that you have never even heard of before and that you might not use, but aI finds them, Google finds them, and they power other third-party websites.

Foursquare is a great example. People think Foursquare retired 10 plus years ago. That’s not a social media app anymore. No, but Foursquare had a lot of really valuable location data, and I believe now it’s Hilton uses it to power their concierge app. So it’s incredibly important that this is accurate. How we do it is we use a vendor where we are able to use AI to automatically update it with the information that we say is accurate. So we can control. You don’t have to log in to- hundreds of these websites you give us the correct information.

What are your Thanksgiving hours? What are your Memorial Day hours? When are you closed throughout the year? What services do you offer? What’s different about your business? Have you moved in the last three years? Your data might be outdated. We make sure our tool and our team correlates that data, makes sure that it’s accurate, and then pushes it out to all of these directories.

And then we use AI to do it to make it faster, but then we manually check them all the time and make sure that everything is updated, especially as things change. Google changes their policies pretty often on what is best practices for Google Business Profile, and other directories do too, so we make sure to follow those latest rules and stay up to date on those.

And then we report every single month on what information we did change and what information is out there. A lot of times businesses will have duplicate listings, and that is really confusing to AI because they’re like there’s two different listings, but one has this address and one has this phone number and they’re totally different.

Which one’s correct?” So we make sure- Yeah … that those patterns are completely, everything is suppressed that it should be suppressed and then everything that is public-facing is accurate.

Shannon Allen: Yes …

Krystal Vivian: and then we’re also able to see how AI is seeing your business. This is a new reporting layer that we were able to add on with this vendor this year, is how are businesses showing up?

How is your content showing up when people are using Claude or Perplexity or Google AI Overviews? And where is that information coming from? Is it coming from your website? Is it coming from your business listings? Is it coming from news stories about your business? and then we can give recommendations on how to adjust your strategy accordingly.

Shannon Allen: Yeah. In the end, what I tell the sales reps to talk to their clients about is we can dive into AEO and GEO, but what they really need to think about right now is- … do you know if your business is AI recommended? Most do not. Correct. So that’s the- conversation starter. Yep.

Krystal Vivian: Yes. And you can’t just search in one conversation in your AI of choice and think that is in any way indicative of how your business actually shows up- Exactly.

Yep … across time or across searches, because when I am typing in a question into Claude, Claude knows me and knows my preferences, so I’m gonna get answers that are custom to me. Shannon, you’re gonna get very different answers in Claude. If you type it into Google, same thing. Whether if you’re signed into Google or not, it’s gonna have information about you.

It’s custom to you. So you don’t wanna ever judge your AI performance or AI recommendability based on one search, ’cause it changes day to day and it’s so personalized. Yes. But you do wanna track trends over time, and that’s what we’re able to do.

Shannon Allen: The old school way of SEO, nobody ever knew the rules and regulations of SEO, and a lot of it was a guessing game. I feel like the way that we’re doing it now, we have a better understanding of here’s the clear signals, right?

Krystal Vivian: Yes. Yes.

Shannon Allen: And that’s why we created AI Location Concierge as a service for our clients to help them with that.

Krystal Vivian: Yes and even with SEO, there’s some standard signals, but there’s still some variations. We will get there with AEO and GEO, but while that is all getting figured out, businesses really need to focus on their name, address, phone number, their online reputation, and their content on their website being optimized so that those platforms can pull answers from there.

My next question for you though is speaking of SEO, this is a question that we get all the time. If AI is giving us all of the answers that we need, is SEO dead?

Shannon Allen: It’s not dead, but it’s old. So I guess that’s the best way to put it. The old way is being replaced.

That’s the fact, and, this is the first time ever in, since we started this business in 2013 that we have not put SEO into our capability stack because it’s changing and evolving, right? So knowing that the old way is being replaced, the old way ranking in the blue links mattered when people clicked through 10 results.

It was about online optimization and offline popularity contest, and a lot of that isn’t valued anymore. It’s not done the same way. Yeah, what’s on your website is important, but the very specific content on your website has been becoming more and more important, which is why we do more of the, the thousand AI answer, word and AI answer blogs and the frequently asked questions, right?

the way that it used to be done with SEO, the answer shows up before any SEO can show up, with the AI overview. And being the business that comes up is what’s replacing the old SEO organic But AI isn’t replacing search as a whole, it’s just making search bigger and more evolved, right?

Total search usage across search engines and AI combined is actually up 26% worldwide, and 16% specifically in the US, right? So no, it is not dead. People who started using chat and actually search Google more, that did grow 10 and a half to 12 and a half sessions a week.

The best way to tell a client is the old SEO is definitely being replaced. It’s not dead, but I would use the word yet. So if you are a client that is spending a lot of money and a lot of time in SEO, make sure whoever you’re working with knows that when they call it SEO, that they’ve really evolved it more into AI recommended and understanding how

to handle things from an AEO and GEO perspective.

Krystal Vivian: Yes, agreed 100%. SEO is all organic, but let’s talk about paid search because we’ve heard from clients who wanna stop their SEM and they wanna put that entire budget into AI because they think it puts them ahead of the game. And obviously we offer both, but from a strategic point of view, what is actually right for a business to do?

Shannon Allen: So first and foremost, right now, the way it currently stands, SEM is a paid search, right? You pay to show up, you pay when somebody clicks. Being AI recommended is a service that is provided right now, similar to the way SEO always was. Back in the day when I would do training, you would have two types of search.

You have search engine optimization or, organic search, and you have paid search. One is a service we provide that you cannot control, which is SEO, and one is a paid search that we have much more control over. Nothing has changed. AI is still falls in that same category, right? It is a service we provide to help businesses become more organically found, whether that’s through an AI overview, an AI recommend, and then SEM is still very much paid.

And most searches are still happening on Google. So this is a great stat to tell your clients that think they’re smarter than the system. Google still handles about 70% of US desktop searches. AI tools as a whole is handling about 3.2%.

The rest is like you got, Bing and Yahoo

You got 2% on DuckDuckGo. There’s a lot of different search engines out there, but AI is growing and we know it’s growing, but it is not in any… If you just said, “I’m gonna stop SEM through my Google and my Bing,” your- … website traffic would take a nosedive. And I can control SEM.

I cannot control AI recommended. There’s too many unknown factors out there. And there’s still a lot of people that still aren’t even using AI at all. I tell people all the time that are my age that I’m like, “Why aren’t you using more of AI?” But the truth is only about 42% of adults use an AI chatbot to gather information.

That means most don’t. And by the way, that doesn’t mean they’re using it to get all their answers. They’re using it for very deep research or some of them are using it as their therapist or to create a logo, there’s a lot of different uses for it.

Krystal Vivian: Yes. Yes.

Shannon Allen: And if you think about this even AI users go back to Google.

It’s still our crutch, right? 60% search Google right after getting an AI recommendation, so they’re still living- … on that page, which is why Google hasn’t made a decision yet what they’re gonna charge for, but they will.

Krystal Vivian: They will. Google is embedded in our daily lives.

Shannon Allen: one of the things I found that was very interesting is big decisions still go to Search versus AI. So 57% prefer traditional search for topics like money and health topics.

That’s credit unions, healthcare, big purchases like cars. They’re not leaning 100% in, and here’s an even crazier thing: the trust in AI is slipping because, I even had an employee that was like I was using Claude, but it gave me wrong answers, and so I haven’t been back.” That’s because you and I know these platforms improve daily and make changes constantly.

But there’s a share of them that have tried it, and they got inaccurate answers, and so they didn’t go back.

Krystal Vivian: They also… I also think it has to do with what did you input into it because-

Shannon Allen: Yes …

Krystal Vivian: we forget, we call it AI, and so it makes everybody think that it’s this intelligent thing.

These are large language models. They are not here to give us the most accurate information. They are spitting out words in a pattern that makes sense based on the billions and billions of words that have been fed into it. Google even put this into an update that they made a couple of weeks ago on their AI standards that AI platforms do hallucinate, quote-unquote, but it’s because they are spitting out language.

And so it’s up to us- as humans, and that’s what we always talk about, is we have to review it. We have to edit it. You have to double-check that the stats that it gave you are verified and are correct and sourced.

Shannon Allen: Yep.

Krystal Vivian: That’s just how the tool is. It doesn’t make it a bad tool. You just have to know what the tool is and how to use it.

Yes.

Shannon Allen: And let me end with this. Google isn’t giving up its moneymaker, right? SEM, or search ad revenue, grew by 17%, which is 63.3 billion in quarter two of this year, and that’s not going anywhere anytime soon, and the risk is if you drop SEM and you disappear, you’re going to disappear from the majority of those consumers who are still searching at the exact moment that they’re ready to buy.

So that would be a very huge mistake from a marketing standpoint and a business standpoint. So the real answer is you need to have SEM. SEO, not as much. You need to evolve it, and you really need to be looking at how to become AI-recommended, okay?

Krystal Vivian: Yes. Absolutely. Let’s bring it back to the topic of our podcast.

Where’s the ROI in search for businesses in 2027?

Shannon Allen: Listen, the ROI is gonna come from doing both. You don’t want to be behind the eight ball. You wanna be very much conscious of it being AI recommended. The good news is it’s much more affordable than SEO ever was. That’s the truth. It’s based on per location that you have, and it’s very affordable to help move that needle along, and it’s gonna continue to evolve.

And if you do something very simple like what we do with AI Location Concierge, you’re gonna be a lot farther ahead of the game than probably most of your competitors, right? So the things that you wanna be measuring is, your listings that are accurate and match everywhere. You wanna take a look at your review count, your ratings.

You wanna look at how good your frequently asked questions, or you just work with a company that can help you with that. But last but not least, continue to do your SEM. Look at your conversions. What are you getting? What’s your cost per click? What’s your ROI on search engine marketing? ‘Cause I can really measure SEM ROI, and if the marketing agency you work with isn’t showing you ROI on SEM, then y- you’re probably working with the wrong person, because it is the best measurable way that we can show the return on investment. And at FDS our goal is we tie it all back to the clients’ businesses.

That’s why we call this, Digital Marketing ROI, right? Yeah. And in the next couple weeks we’re gonna do a podcast on where we’re at with our new ROI attribution tool called Journey One that I’m so excited to launch and talk about to any of our listeners out there on how we’re finally evolved on what is the whole point of this podcast, which is- really being able to identify your return on investment.

Krystal Vivian: Love that. Can’t wait.

Shannon Allen: Thank you for today. I think this is great information as people are planning out their budgets, and we’re rounding out the end of October here. So thank you, Krystal.

Appreciate your time today. Thank you. And thank you to our listeners for tuning in, and join us for our next episode of Digital Marketing ROI.

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