Lesson #369: Artificial Intelligence 'Avalanche' Looming for Search Engines

I have been a serial entrepreneur for over 25 years now.  Each of the businesses I built included a healthy dose of search engine marketing, anchored by Google, the “big dog on the block”.  Google controls over 90% of all searches completed on the internet worldwide, a market share it has held for the last decade.  It was never imaginable that anyone could ever take Google down off its perch.  But with all the progress the artificial intelligence (AI) companies are making in the search world (e.g., ChatGPT recently launching SearchGPT), it may not be long before there is a “new sheriff in town”.  And that could be really bad news for most of us digital marketers that have grown to be dependent on Google over the years.  This post will help you get in-front of this pending avalanche on the cusp of happening.

How Search Engine Marketing Works Today

If you are new business trying to get off the ground, most do so on the backs of companies like Google where millions of people are searching for things each and every day.  You simply needed to piggyback on their huge audience.  And you either did that by trying to get free organic traffic as Google indexed pages on your website, which you would try to manipulate through search engine optimization efforts (e.g., content creations, sourcing backlinks, optimizing the page code).  Or you would do it the quicker, easier and often more costly way of purchasing pay-per-click advertising through Google Ads.  This latter effort meant you always had an immediate way to get your business exposure with 100% certainty.  As long as you had advertising money to spend, Google would find you an audience.

How Artificial Intelligence Changes This

First of all, these AI companies are in their infancy and they are solely focused on winning the “technology war” up against their competitors to prove they have the best AI search product in the market.  Which means they are not focused at all on how to monetize it yet.  Secondly, there will be a handful of players that rise to the top of this race.  Which means it is unclear who the winner will be that you need to focus your marketing efforts on, which will result in a much more splintered marketing efforts across multiple sites to manage (no single “big dog” yet).  Thirdly, there is no “handbook” written on how you can “game” the AI companies to include free organic links to your company.  It took decades to learn how to “manipulate” the Google algorithm, and it is unclear what needs to happen to manipulate more conversational AI robots.

This doesn’t even speak to the biggest point—AI can do things that were never even possible or imaginable with Google, making it a “better mousetrap” which will capture a lot of attention from users looking for solutions.   For example, if you are looking for a vacation on Google, you better have your “keywords” ready (e.g., whitewater rafting trip,  best things to see in Florida, best hotels in New York).  With AI you can layer in a lot of different things into a single search.  I was amazed when ChatGPT could quickly answer this question I posed: when you combine the cost of air, hotel and concert ticket costs, which of the 20 cities in Taylor Swift’s European Tour is the cheapest place to see the concert with me starting from Detroit.  In less than a couple seconds it pulled all the airline cost options, hotel cost options, concert ticket options by city, and made a well-researched and detailed recommendation.  WOW, was all I could say!!  This is a game changer, and Google should be really worried.  But more importantly, us digital marketers need to be shaking in our boots right now.

What This Means for Digital Marketing

First of all, it is going to be a “wild ride” for the next few years.  Most likely two things will happen, in this order.  First, people will experiment with all the new AI engines.  And they will gravitate to the ones they like better than Google, and Google will start to lose its stranglehold grip and market share.  This means you will see a lot less traffic coming from Google to your website, or the cost of that traffic will materially increase as you and your competitors will be fighting over less-and-less traffic over time.

The second thing will happen is the winning AI companies will finally turn their focus to revenues and monetization and launch advertising options on their websites.  It is not exactly clear how they will do that (e.g., keyword based like Google or something completely different), so it will be a learning exercise for all involved.  Which means there won’t be an immediate replacement for your lost Google traffic, and there will be this “middle period” of waiting to learn how to replace that lost traffic from the new AI engines.  That will put a lot of strain on your financial results—losing traffic from Google, waiting for new solutions, learning new solutions from AI engines.  It could result in a material “shake-out” for undercapitalized companies that don’t have a big pile of cash with which to “weather the storm”.

Closing Thoughts

Hopefully, all the search engine optimization companies shift their focus from Google to the new AI engines to help us more quickly navigate this new “Wild West”.  Or better yet, Google protects its search turf with its own AI and acquires one of the big AI engines so it can quickly transition its advertisers from the legacy Google search engine to the new AI driven solution that users are migrating towards. Until then, protect your businesses in the coming years.  It most likely won’t be all “wine and roses” for immediate marketing positions that you can easily control.  Which will make it a really bumpy ride for your income statement, requiring you to have a healthy cash reserve on hand.  I can’t wait to see where we end up in the next five years—as digital marketing will look a lot different to what it is today.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Tips for Eliminating 'Friction' in Your Customer Journey

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how how to remove "friction" from your customer journey.  You will learn how to study each step of your sales and marketing funnel to ensure a poor customer experience is not having them looking for the exit.  I thought this video turned out great, and I wanted to share it with all of you to make sure you have the highest odds of converting every lead into your business with no customer hurdles in the way. I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick, Shyann Malone and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Not All Buyers of Your Business Are Created Equal

 

When your shareholders have decided that it is the right time to put your business up for sale, it is very easy to say, "Great, let's sell it to the buyer with the highest valuation."  But that would be a mistake. There are several other factors that go into finding the "right" buyer for your business and your specific situation. This article will help you think through those various consideration points and provide some warnings for things you need to look out for to avoid known potential pitfalls when it comes to picking the right buyer for your business.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Strategies for Creating Successful Sales & Marketing Plans

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how how to create a successful sales and marketing plan for your business.  You will learn everything you need about the building blocks needed for scaling your revenues.  I thought this video turned out great, and I wanted to share it with all of you to make sure you have properly "done the math" to ensure your revenue goals will actually be hit. I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick, Shyann Malone and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #368: Pending Tariffs Creating Paralysis for Businesses

 

When businesses are unclear on what the future will bring, it often results in a “wait and see” approach before making any material investments.  We see that leading into most presidential elections, as different presidential winners could have different impacts on the economy based on their promoted policies.  The winner of the most recent election is touting his plan to levy up to 25% tariffs on China,  and potentially other countries where he sees an imbalance on trade levels.  The result of that has most business executives very worried about the future impact of any tariffs on their businesses, and hence has “paralyzed” many companies, resulting in them pushing off any material investments until the situation becomes more clear.  This post will better educate you on why business executives are worried, and what this may mean for your businesses.

Why Tariffs are Generally Bad for the Economy

Tariffs are not penalties paid by the country they are being imposed upon.  Instead they result in a 25% increase in the cost of those products which are imported from those countries.  And guess what, when the costs of importing goes up, the importing companies in the U.S. typically raise their prices to cover the higher costs of those products. And if the U.S. importers raise their prices, it is ultimately the U.S. consumer (you and me) that end up paying higher prices at the retail stores where we purchase these products.  Rising costs for consumer goods will decrease consumption, hurting the sales and profits of those products, which in turn lowers the success of the U.S. based importers, hurting their ability to re-invest in their businesses (creating new jobs), and in turn hurting the U.S. economy.  It is a vicious cycle.

To try and scope the size of the potential impact, here are a few stats.  Imports represent around 14% of the U.S. GDP and around 17% of total imports come from China.  That in itself does not sound too bad, but U.S. GDP includes a lot of huge industries like oil and food that are not sourced from China.  When you study consumer spending behavior on the goods they are most often purchasing, things like apparel, shoes, toys, electronics and textiles, around 40% of those products are coming from China.  If consumers see a 25% increase on 40% of their spending, that will result in a 10% immediate impact to their spending power, further straining their ability to effectively make ends meet.  As consumers will be spending the same 100% budgets they have to spend, it will only go 90% as far, forcing them to make difficult decisions on which products are kept in their monthly budgets and which products are cut.  The manufacturers or importers of the “cut products”, will see an immediate impact on their revenues and profits, hurting their businesses, their ability to create new jobs and the economy overall.

A Case Study

This is not the first time the Trump administration has imposed tariffs on China.  He imposed 10% tariffs on Chinese sourced products during his first administration (2016-2020).  We saw the impact of this on the restaurant furniture industry.  The retail cost of these products ultimately increased 10%, and the U.S. importers went looking for other sources of product (e.g., Vietnam), in an effort to try and get their prices back down.   Our business was fortunate enough to pass through a 10% price increase to our B2B customers, without a material impact on our demand or profit margins.  

But a 25% price increase would create much bigger headaches.  First of all, customers may be unwilling to pay 25% more for those products (which could impact margins and profits), or they may push off any discretionary spending entirely (hurting revenues and demand).  But in the restaurant industry, there will be a greater worry:  if consumers are seeing 25% higher prices on their everyday purchases like apparel, shoes and textiles, they will feel a squeeze on their personal checkbooks, which is turn may have them spending less on discretionary purchases like going out to dinner at restaurants, which in turn will have the restaurants seeing less sales and profits, and a general inability for them to reinvest in their businesses in the form of new locations (creating new jobs) or upgrading their old locations.  So, let’s hope that doesn’t actually happen.

What This Means for 2025

I think there is generally going to be a “wait and see” approach this year before companies make any material investments (creating new jobs), which in turn will stagnate the economy until the business executives feel more confident they have their arms around the situation.  Trump took office in late January, and tariffs on China may not be known until the end of his first 100 days in office.  Which means It could be the end of April before business executives have a clearer understanding of what actions were taken by the Trump administration and what the estimated impact of those tariffs on their businesses could be.

Then, one of two things could happen.  One, the news is not as bad as they thought, and they get back to growing their businesses normally, per their original plans.  Or two, they react negatively to the news, and they start to “batten down the hatches”.  That could result in a decrease in spending, a decrease in investments (job growth creation), or worse, they don’t have enough cash on hand to weather the storm, and they start laying people off to lower their expenses.  Once people start losing their jobs, that would negatively impact consumer spending, and in turn, further hurt the U.S. economy.  I am sure rooting for path number one over path number two.

Closing Thoughts

Many of us are already seeing a general softness in our businesses, largely due to our customers employing this “wait and see” approach.  Material purchases are getting “back-burnered” until business executives can get more clarity on the tariff situation.  That includes both for their normal day-to-day purchases (e.g., new store growth, major remodels, big capital expenditures), and for things that can materially move their businesses forward, like mergers and acquisitions.  Business buyers are more nervous right now and banks which fund these deals are being more cautious than ever in their lending decisions, making it harder for business buyers to access the needed capital. 

So, if I were the man sitting at the Resolute Desk in the Oval Office, I would think long and hard before implementing tariffs.  Yes, it may sound like you are punishing China and that could get you some short term sound bites with your voting base or generate additional revenues for the government.   But, if you put on your long-term glasses, you could end up putting the U.S. economy into a tail spin (which we are already seeing nervousness in the U.S. stock market).  Proceed with caution, both at the government level and in your own business forecasts!!   

For future posts, please follow me on Twitter at: @georgedeeb.

Why Pending Tariff Uncertainty is Creating 'Wait and See' Approach

When businesses are unclear about the future, they often take a "wait and see" approach before making any material investments. This is especially true in most presidential elections, as different presidential winners could have different impacts on the economy based on their promoted policies.  The winner of the most recent election is touting his plan to levy up to 25% tariffs on China and potentially other countries where he sees an imbalance in trade levels. The result has most business executives very worried about the future impact of any tariffs on their businesses and, hence, has "paralyzed" many companies, resulting in them pushing off any material investments until the situation becomes clearer. This post will better educate you on why business executives are worried and what this may mean for your businesses.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.