Google AI mode for small business: what to do now

Google says its own AI answers are eating into the money it makes from search ads. That was the headline from Alphabet's results this week. It matters if you pay for Google Ads or rely on customers finding you through search. Here's what Google AI mode for small business owners comes down to, and what to check now.

What happened

Alphabet, Google's parent company, published results on Wednesday. Revenue grew 25% to $127.6bn for the three months to the end of September. But it earned less than analysts expected, especially from advertising.

By the end of Thursday, shares had fallen more than 12% to a six-month low. Just over $500bn (£374bn) came off the company's value, according to the BBC.

The reason: Google's chief business officer, Philipp Schindler, said "AI mode" was cutting into ad income. AI mode is where Google answers questions conversationally, instead of showing a list of results with ads alongside. Schindler still said he felt "very good about our trajectory".

Kim Scott, who used to lead Google's advertising business, described it as a long-term play. "I think they're making a long-term bet on AI," she told the BBC.

Why this matters if you run a small business

Traditional search ads appear next to normal results. If more people get their answer from an AI summary, fewer of them will see or click those ads.

That's our reading of the situation. Google hasn't given figures on how much traffic is moving, and the article says nothing about how individual advertisers are affected.

The article also notes that millions of people now use tools like ChatGPT and Claude instead of Google. So the route from "customer has a question" to "customer finds your business" is splitting across more places.

Google is choosing to hurt its own ad income in the short term for this bet. It isn't likely to reverse course quickly. Expect search and advertising to keep changing.

What we don't know yet

The source doesn't say how widely AI mode is available in the UK or Ireland. It doesn't say whether your clicks or costs will change either. Don't assume it's already affecting you, and don't assume it isn't.

The sensible move is to look at your own numbers.

What to do this week

Check your ads against enquiries, not just clicks

Open your Google Ads reports and look back over the last 6 to 12 months. Check clicks, cost per click and, most importantly, the calls, forms and bookings that came from them. If clicks are falling but enquiries are steady, that's a very different story from both falling together.

Make sure you know where enquiries come from

If you can't say which channel brings in work, fix that first. Ask "how did you hear about us?" on the phone and in your enquiry form. Proper tracking on your website is better still. You can't make good ad decisions without it.

Don't panic-cut or panic-spend

A big Google share price drop isn't a reason to pause your ads. It isn't a reason to double them either. Change your budget only if your own results move.

Tidy your Google Business Profile

Check your opening hours, services, photos and recent reviews. This is often the first thing a local customer sees. It's worth keeping accurate whatever happens to search ads.

Look at how you show up

Search for what you do, in your area, on Google. Then try one of the AI tools. Are you mentioned? Is the information correct? You don't need to fix anything yet. You just need to know where you stand.

Get a quick health check on your site

Your website is what all of this points to. Our free website check looks at security, speed, SEO and AI-readiness, so you can see if anything obvious is holding you back.

How we'd think about it

The lesson isn't to abandon Google. It's still where most local searches start. The lesson is not to depend on one source of customers.

A healthy mix usually includes a clear, fast website, a well-kept Google Business Profile, steady reviews, and some content that answers real customer questions. Paid ads sit on top of that, and you track whether they earn their keep. That joined-up approach is what our Growth retainer is built around, but the principle applies whoever looks after it for you.

Next step

If you'd like a second pair of eyes on your ads or search visibility, book a free 30-minute call. We'll tell you plainly what we see, including if nothing needs changing.