Google's Revenue is EXPLODING. But Are Brands Winning Too?

Heat. Heat. Hello and welcome to the dojo, a search marketing podcast by Exposure Ninja. My name is Dale Davies and I am the head of marketing at Exposure Ninja. I'm joined by Charlie Martin who is our CEO and speaker extraordinaire. How you doing, Charlie? Oh, thanks. Yeah, I'm very well, thank you, Dale. Nice to be podcasting. And this is a pretty special podcast for one of the worst reasons, which is because it's your last podcast with Exposure Ninja, you are off on your next adventure. And after over 10 years of working together, I can hardly believe it to be honest. I wasn't expecting that. Okay. Sorry. I was like I thought that was going to be something you were going to mention at the very end of the podcast now. Okay. And now I'm going to carry this these emotions all the way through. So this is going to be an interesting one because we need to know it's special up front. Indeed. Yeah. Okay. Well, that's caught me off guard. Okay. Uh yes, indeed. Yeah, it is the last podcast but from me, but it isn't the last podcast from Exposure Ninja. So, you're going to be getting a lot more um from us. There's going to be more podcasts coming out. There's going to be a lot of coverage of all the things that are changing this year. We're going to be introducing some new people to the podcast as well. And you also got some fantastic guests lined up as well, have you not? Absolutely. I cannot wait for our guest series to come out because we have some of the biggest marketing growth leaders out there on a short interview series coming out soon. I saw like her first uh draft, her first preview of one last night and it's looking really good. So, if you do love learning how to, you know, scale up your business or how to succeed with search or search marketing, AI, search, all these things, make sure you stick around and listen to the podcast because you're going to get some fantastic episodes lined up. But this week, we're talking about something else. It's not 21% of ChachiT's clicks go to Google. I need to change that background, but whilst I do that, we're actually going to be talking about Google's earnings call and some of their announcements around some of their successes. Is that not right, Charlie? Yeah, absolutely. And this is pretty pretty fresh news. What happened in Google's earnings call? And they have had a fantastic quarter. Um, if we look at some of their headline numbers, search and other advertising is up 19% yearonear this quarter compared to last quarter, which is absolutely huge to be honest. Cloud is up 63% which is breaking 20 billion for the first time. and paid subscriptions hitting 350 million. Big numbers. Big numbers. Um, and revenue from products built on Gemini and Cloud grew over 800% year-on-year. So, across the board, they're they're pretty much shoveling out excellent figures for them. It's a phenomenal amount of uh, you know, high percentage increases across the board, but very much tied into the AI products like Gemini. Yeah, absolutely. And I think it's this monetizing of AI point from their earnings call that's that's so impressive, right? Like they are growing so much across these AI areas. And they're also talking a lot about how AI overviews and AI mode are expanding search quite significantly. Queries that apparently Synindar says are at an all-time high and AI overviews he says grow driving the uh overall search growth that they're seeing as well. which I think is probably the most important point for everyone listening to this podcast is that that kind of doomish narrative that chatbt and perplexity and AI overviews is just completely gutting Google search isn't really what's showing in these numbers that Google search is still growing. It's still huge. It's still a big part of the search journeys that we all go on. And actually, even though there are people who have a somewhat, I'm gonna say light distaste for AI overviews, the number of people actually using and interacting with them is is going to be high. Yeah, it's really interesting just the the journey that Google has gone in the last three or four years since Chat GPT was released. So we've obviously been at the forefront of that and kind of when Chachi was released trying to figure out how these things work and you can predict that people are going to love it and that they're getting millions of views sorry users at this point. I don't think anybody had really predicted that ch Google could respond at the rate and you know the level of quality of uh AI over well AI response or AI product in which you know they're now rolling out pretty much almost every search I do has an AI overview or is pushing me to do AI mode. Yeah. And I think one of the biggest myths that people hold about AI search is that chatbt is bigger than AI overviews, which is not the case. Even though chatbt is the biggest of the the chat bots, it's more popular than Gemini for now anyway. And by quite some margin, the number of people who actually use and interact with AI overviews is still significantly larger, which is of course because the number of people who search on Google is still significantly larger. So even though chatbt kind of exploded onto the scene when it comes to like AI chatbot apps that we use on our phone and those kinds of interactions, Google is still very much dominating in total share of the search market and of course significantly with ads as this huge 19% increase in the ad revenue is is showing and ad revenue of course being Google's biggest revenue source as well. So, what's your understanding of like that growth in ad revenue? Is that from AI overviews are leading to more ad clicks or is there something else at play? I think the other big thing that's probably going to be at play is people being scared about losing clicks because of AI overviews, feeling like they're seeing organic traffic drops. quite a lot of businesses and websites are experiencing that feeling of clicks are down even though impressions might be up or might be stable and even though that doesn't necessarily in uh impact negatively the conversions I think there's very much a a line of thinking that is in order to get more conversions you need to have more organic traffic and therefore you need to show up in more organic rankings and get enough clickthroughs from those and I think there is a resurgence of using Google ads as a way to mitigate the effects of organic being different to how it used to be and making sure that those businesses are still getting clicks. There are sectors where they rely so heavily on Google ads because of how volatile those organic search results are and because I think there's a fear of there's a lot going on here with AI overviews AI mode but also with chat GBT and Plexity and Claude and all of the other AI chat bots and how people search. It means that actually understanding and being on top of organic search and the strategies that you need to do well in it is now a much broader, more difficult game than it was a couple of years ago. Do you think brands have have reason to be scared of AI overviews at this point? You know, they've been in play for quite a while. Um, you they came out of beta a year ago at this point. Do you think that they should be scared or they should embrace it? I mean, I think you have to embrace it because it's definitely not going away. AI overviews has been around for ages, but still some of the most popular webinars that I speak on are for topics of things like what do we do about zero click search? How do we manage AI overviews eating the clicks? What's the plan of action? And from my perspective, this has been the situation for about two years now, very very much so in 2025, last year as well, that if people are still scared in 2026, it's because they haven't yet shifted their SEO strategy to understand how AI overviews and other AI platforms are part of that search journey. And some of that reaction will be, okay, let's dump more into Google ads. It feels more secure. But also we have to remember that because Google experiments with how the search engine pages look sometimes Google ads positions can be very volatile and change quite a lot as well. And on some of the searches we even know that Google ads is one of the reasons clickthroughs have dropped. It's not all down to AI overviews even though AI overviews has a a lion's share of responsibility in that phenomenon. But this is all just about how the search engine results pages are changing how search journeys are changing. And I think if the response is fear and panic, like that's super unhelpful. That's not going to help anyone. There's no need to respond with fear and panic. What you actually need to respond with is uh maybe some excitement that things are changing and they're interesting. And then a really solid plan based on research, based on your customer journeys, based on all of the information, you know, from the types of people who buy from you and where they come into, where they check out, where they send inquiries on your website. Do you see the the search product continuing to evolve or do you think the AI overviews are the kind of you know the final thing? Oh, we are definitely going to see much more evolution than this. I don't think AI overviews are the the final thing by a long way. I think they're more like a testing bed for getting searchers used to using AI and it becoming a normal part of the search journey because you have to remember 2 3 years ago AI just wasn't in our search journeys and now this use of AI when it first happened there was a lot of trepidation. There's still people now who are like I don't really trust it. I'm not sure about it. Google has to get everyone to a place where they feel really comfortable using AI. But I think long term and we know from things that that Sundar and that Google have announced that their long-term vision is actually going to be that search is much closer to how AI mode works and operates and what that looks like than the traditional 10 blue links that we see. Now the thing that we don't know is what that final version will look like because there of course AI mode is is still fairly new when it comes to search and we don't know exactly how that's going to evolve. I don't think it will look exactly like it looks like now, but we know that's the direction of travel. We just don't yet know the timeline. Like I've seen more recently AI overviews have been changing their appearance very slightly where there's a larger dialogue box at the bottom. Whereas previously you would have to click a button to well previously there never used to be a button on the bottom at all. You'd just have to scroll down and you'd see just you the linked results underneath. And then they added like you an ask AI button I think is there. And now it's just a forward dialogue box that you would get if you were going into AI mode already. And I don't know if that's visible for everyone or that's just my my thing. I'm not really sure. Um yeah, I've seen this as well. I think it's also because there's a move towards making the search experience more interactive. Like a lot of what consumers have loved about chatbt is it feels like you're in conversation and it's personalizing. over time it starts personalizing to you if you if you have its memory switched on as well. So I think that experience making the search journey feel personal to the person searching and giving answers that are much closer to what they want, what their intent actually is, I think is part of this evolution of search and Google have tried to quite rightly stay objective enough about the answers that they're giving because they hold a huge amount of responsibility in terms of giving accurate and representative and fair answers. when they do in a way that I think some of the scrappier startups perhaps have not uh been as by the book shall we say and I think Google's trying to find the right line something that engages and is interactive and personal without feeling like it's biased. I saw somebody making uh a prediction just yesterday that Google is turning more into a marketplace where you don't need to visit e-commerce stores anymore. you can do a lot of like the category searching and you know the product kind of sifting within the chat product within AI overviews AI mode let's say let's just say that they combine in some fashion if you're running a brand or running an e-commerce store and you do have you know thousands of products and Google's going to be like the main destination where people shop how do you make a decision on how much you invest into optimizing your site to appear in that shopping um marketplace versus I just want to get people through to my website. And the comparison I would say is for brands who've often had to compete against Amazon is do I, you know, do I fight them or do I join them? Do I, you know, just try and figure out like how to get my website ranking or do I just put my products on there and take the hit on the margin? Yeah. Yeah, I mean it depends on the scale of the business, how much opportunity you have to do that. And that's true for so many spaces as well. Same with things like uh restaurant bookings, accommodation and hotel bookings, you know, sites like Booking.com or Airbnb take such huge fees in comparison to booking directly. So it's it it affects so many different types of businesses, this type of thing. Going back to your original question, which is what what would you do? I think the thing not to do is pretend that agentic experiences aren't going to become part of what's normal because they are. Things like restaurant bookings, things like uh shopping agents, they're going to become more and more normal as people pick them up. So, it's it's not like going to be an overnight change as we know already, but we know that things are moving in that direction. So I think you have to at some stage admit defeat to the fact that Google has dominance here and that there are industry giants and depending on the scale of the business you're not always going to have the uh resource the money the resource the ability to overtake those platforms. So optimizing to shop in the right places, running ads in the right places, integrating with agents, I think is all going to become part of an e-commerce strategy over time. And I think we're already seeing big e-commerce retailers move in that direction. I'm think I'm going to press you a little bit further because I experience this just the other week where there's a family of squirrels that live in my garden. Um where is this going? I have like a little squirrel um feeding box that I have to put like monkey nuts in and then they like climb inside and they have to get them and stuff. But I get through monkey nuts pretty quickly as you can as you can probably imagine. Um so I asked as a test AI mode whether it could find me the cheapest place to buy a kilo of animal um edible um monkey nuts. and it went through and it found four or five different places and one of them was eBay and it was like the cheapest per kilo and so on and I just wanted to click a button that would just complete that checkout for me and just buy it. I instead I had to go through to eBay. I had to like log in if I didn't have an account to create an account so on. And what the point I'm getting to is ideally Google wants to just finish that transaction within search without me having to go there. And as a consumer I couldn't be bothered to complete that purchase. So I just didn't do it. So I still still going and buying them, you know, from the local supermarket from the store. But I wanted to just finish that. Just just let it go. just be like, "Yeah, go buy it for me." Whatever. As a consumer, that's what I want. It's less hassle. However, if you, Charlie, were leading up the organic team, uh, eBay, and you are aware the consumers just probably don't want to come through to your website, how do you optimize for that? Are you optimizing just to get featured or are you desperately trying to find any way to get people through to the website on the hope that they'll increase their basket size and purchase more products? I think a lot of this comes down to the trends that someone is seeing already. So if you're if you're eBay or any kind of e-commerce that's in a in a similar sort of situation, what you ultimately want is the most revenue possible and a lot of e-commerce get really caught up on fees even though they pay huge huge amounts into Google ads. So from my perspective, the the question you're really asking is how much drop off are you likely to have if you refuse to do certain things so that you are more likely to just get direct traffic and you're you're trying to make sure that that traffic that lands on your website ultimately does check out ideally, right? You want the conversion path on the website to be simple enough that they don't feel like, "Oh my goodness, I have to go around in circles to finally check out." And one of the worst things in my opinion is having to create an account on a website, especially if you're not going to check out there regularly. Like, no, Marks and Spencers, I don't want an account. I just want to buy this thing right now. And then the the other thing is understanding that you're is that drop off going to be worth it to you? Like, not everyone is coming to a site and then going to start adding more and more to their basket. Some shoppers might be in the mindset of like, I'm shopping and I've got things to do. Oh, that's lovely. I love this. Oh, the next thing that I've seen. But a lot of shoppers like you, Dale, and I am a similar type of shopper. It's just trying to get the task done and I'm not interested in spending more money on various related products for whatever it is that I'm shopping for. I just want to check out. So, I think there's going to be a trade-off for all businesses in this new world of Aentic. in the new world of admitting that actually some portion of revenue is going to have to be sacrificed in order to ultimately get the revenue from certain customers. But I think it so much depends on the types of customers that you actually have, the setup that you actually have. things like eBay. I would never join like an email marketing list for eBay, for example. But there's going to be other types of brands where you love the brand, you know it, you want to know what the new product releases are going to be. That's going to be things like shoppers in the beauty and cosmetic space, things like skincare, things like makeup, where actually they have, I don't want to call them a cult following, but they have fans. They have fans and they want to know what's coming out. They want to be in the email flow. So in those situations, that's wonderful. Those brands are going to be significantly more likely to convert, get higher order average order values and longer lifetime values from those types of customers. But there's going to be other more transactional types of purchases where that's not going to happen. Things like something you just need to order every month, like your pet food, your toilet roll, whatever it is. the staples where someone isn't actually looking to shop around for all other sorts of different things. So for me, a lot of this comes down to what your specific business is, how your margins actually look and how much you can sacrifice from there and what percentage of your goal is around just growing the revenue rather than optimizing the profit for what you're doing. And I suppose it just indicates just how important it is for brands to be interlaced and integrated together and that they're you know working with hopefully in an omni channel way that let's say you do see high transaction volume in one product line or category via aentic search. You're then like feeding that information back to your other team. So they go, "Okay, we need to prioritize this category for our on on-site shoppers because we're seeing a lot of interest elsewhere. We're not seeing that on the website. Is it that our category is hard to find or hard to navigate or hard to maybe the product descriptions aren't strong enough for people who are on site? And you know, if there's some interest in aentic shopping there for this product line, what are we doing uh with the advertising, you know, the the 10 50 ft away from the the from Boots, for example, in the walk up to there, they're getting a a reminder that The Ordinary has a new product line now and you should pop in and get it. you know, you're kind of working all together rather than seeing, you know, a aentic or AI mode or AI over uh transactions being completely independent and different to everything else. Mhm. Yeah, I completely see it like that. I think it's all part of an ecosystem and I don't think it's all or nothing. Like I don't think it needs to be that you only sell on Amazon so you spend absolutely no time thinking about your own website or you're so closed off to the idea of selling on resellers or aggregate sites or using a gentic that you have kind of boxed yourself in to just using your own website. I think it's about deciding where are your customers, where are they most likely to make a purchase and what are the touch points that need to happen in the ecosystem to push them ultimately to drive revenue to you. Yeah, like I love the idea if you are getting a delivery from eBay for whatever product it is that it comes with some kind of leaflet or activation thing that gets you back onto the eBay website and you start looking for, you know, here are five other things you might like or here's a QR code to scan to, you know, find an exclusive offer which then pulls you into the marketing ecosystem in some way. Like, you know, just because it's um the shopping is happening a different place doesn't mean you can't still pull people in. Um, for sure. Were there any other findings in the earnings call that you spider that might be uh interesting for marketing leaders to know or would you like to make some recommendations on what they should be doing going forward? I think the one thing that I do also want to mention that uh Pichai drew attention to is that personal intelligence he says means people are getting responses uniquely relevant to them. that those were his words. And it for us marketers means it's going to mess with how we think about rankings and it's going to get more difficult is what I think about this. Two users searching for the same thing. You and I searching for the same thing might see different outputs now that personal intelligence is is rolling out. And it's going to mean that there's going to be struggles with keyword rank trackers. There's going to be concerns about whether they're less meaningful. And it's also going to mean that things like strength of your brand, how well optimized your website is around using its schema, how well it's seen as an authority for what it does or a trusted source, shall we say, so that AI recognizes the areas where it's strong and the areas where you want to show up, I think, are all going to become more and more important. They're already important, but I think even more so, and ultimately at the end of that, understanding who your customer is. I don't think this means like it's the death of keywords. We don't need to go over the top about it, but it does mean that the data we're using isn't perhaps as exact match as we felt it was a couple of years ago. And that's going to continue to be the case as experiences become more personalized to each each searcher. On the topic of you know the fighting for position James Cadwald from profound I think two or three days ago put a a very simple image which was like from Claude and it was if you haven't used Claude sometimes it will prompt you with some um answers sorry like a question you have to click one of four options so you you ask uh to help you with some task and it'll say would you like me to do this that or whatever the question that there was that was being posed was about some product purchase and then the prompt from Claude was would you like to know more about this brand, this brand, this brand or none of these? And therefore, it's created a brand new ranking system where you have to be one of those three brands that's that's popping up. Okay, it may not be a high um you know um high percentage of conversations that come up with that, but it could increasingly be the case. It may even happen through, you know, Google's own system as well where it says, "Here are the brands that you actually know and you like, but would you like to see one other?" We don't know for sure. It's definitely going to recommend another one just yet. So, you are fighting for one of three positions instead of what we so used to four or five years ago of you want to be the, you know, in the top three of rankings, but you were one of 10 initially. Um, it's quite a change. It is quite a change. And I think the other part of this is that everything that gets shared in the earnings call is of course polished in its own way, right? It's Google's story that they want to tell about what's happening. So it doesn't touch on things like how websites and publishers are actually affected by AI overviews. A healthy Google search growth doesn't necessarily directly translate into a healthy ecosystem of people coming through to websites. It means Google is doing well and it means people are using their ads for sure. Um, they don't mention of course the uh DOJ antitrust case that's still ongoing at the moment for Google which could change things significantly. And I don't believe they also mentioned their their competitive pressure that they have from ChateBT uh Anthropic Claude's parent company perplexity. They are still very much in the race with those AI chat bots and Gemini though significantly better than it once was is still somewhat of an underdog compared to Chat GPT right now. You put them in the underdog category. Do you know I would put them in the underdog category and Gemini specifically, not Google. Google has all of the all of the uh chips that it wants to have, right? But I would with Gemini because I think the marketing strategies whether they're intended or not from chat GPT from OpenAI around making that a mass market consumer product means that it's going to be hard to get people back onto Gemini. And I also think Anthropic has been incredibly competitive with Claude and Claude becoming a workplace tool not just for developers but for those using co-work. I think Gemini is going to have to really start pulling some things out the bag to get users back on there and to actually grow it rather than just do okay with it. Interesting. I kind of see uh Chachi BT falling into that Microsoft territory of like everybody kind of is forced to use it because they have to whereas you got this lovely like more friendly Google and you're like just their products feel nicer and you know they're just simpler and they just work you know they're not as as buggy as a lot of Microsoft products are. I feel the same between like Claude and and Chat GBT. Claude just feels nicer and that does have like a better functional like functionality and tool set as far as I'm concerned for the moment. But yeah, I do wonder if the Claude is like uh this generation's Google, the friendly friendly uh nice. Oh, I see. I think it's different for the uh average marketer in our sector who knows these tools significantly better and is probably tested across multiple different ones though compared to the average searcher whose head is not in the marketing and AI world for their for their job. you know, they're teachers, nurses, doctors, they're not spending their days, but well, they they have other significantly more important priorities than messing around on different AI platforms as part of their day job. So I think that's where the the big difference is for me is the strategy that Gemini would have to get going in order to attract people beyond this specific field who are you know Google lovers and enjoy the Google ecosystem. I think that's that's what makes them a little bit of an underdog at this time. Okay, last question before we wrap up for this week. Um, if you are in a marketing leadership position, you're you're responsible for strategy and and delegating out, you know, which team what the team's focusing on and where the budgets are allocated. Are you suggesting people go, you know, 80% into organic, 20% paid, paid just to bring the clicks in and 20% organic, or are you running things in a different way? Depends on the business and the need. To be honest, from my perspective, if I was a marketing leader, it's always coming back to what's the strategy for the business and what's the analysis of what's performing well for you and what's not. And it's always 80% of your budget and your resource is to make sure what's performing really well for you continues to perform as best that it can. and 20% on the experimental things that could be potentially growth areas for you, could be new channels, or are just something different that you think, you know, our competitors aren't really spending a lot of time there, so is there a lowhanging fruit opportunity for us? Or I think my customers are probably over there on that space. I think the biggest danger is doing something just because it feels trendy and not thinking about where your customer actually is. And so my biggest piece of advice for marketing leaders who are thinking there's like a million different things to do here is focus on where your customer actually is. And if you don't know, find out before you start investing significant amount of team time and marketing budget on something that might be a non-starter. That fantastic advice. Okay. Well, this is the last one from me. So, thank you so much for joining uh myself and Charlie for, you know, the last year or so of the dojo. There is going to be more from us going forward. So if you'd want to get more episodes of uh search marketing podcast into your ears, you can go to exposinginja.commpodcast where you get hundreds of episodes including the new series, the growth leaders series which is going to start publishing I think in the very near future. And for all things search marketing, just head over to exposioninja.com where you'll find blogs, videos, podcasts, webinars, you've got it all covered over there. And I very much encourage you to go to youtube.comexposinja where you'll find up totheminute for leadership, strategic advice, everything you could possibly need on AI search, traditional search, technical SEO is covered, um p digital PR is covered, content, paid media, everything you could possibly need. Just make sure you head over there and hit subscribe. And uh thank you again once uh again for joining us this week. and Dale, thank you for being the most wonderful co-host to the Dojo podcast since its very beginnings and since I joined it as well. There is no greater pleasure for me than podcasting with you every Friday. I am very much going to miss this. I I must admit you don't all see the little giggles and fun that we have before and after. Maybe the sub emojis are coming behind the scenes or you know uh dark series. Um magic. All right. Thanks everyone. Take care. Bye. Bye.