How Zapier got $575m worth of SEO traffic, AI Overview data that will blow your mind, Google AI Overviews showing less often, with less Reddit, data shows

0:00So Zapier gets$575 million worth of organic traffic. So you can run their traffic through Ahrefs, SEMrush, or, um, you know, Uber suggests whatever you want to use. And so those of you that can't just screen per month, per month, per month. Yeah. Yep. So if you look at what they're ranking for over here, um, you know, it says like 20 best Trello alternatives and competitors in 2024, um, 15 best JIRA alternatives, top 10 service now competitors and alternatives. And they just have a lot of these permutations, right? So you can look at the, the keyword, the top keyword, these pages are ranking for.

0:33So chat GPT alternative, Vizio alternative, TeamViewer alternatives, Miro, ServiceNow competitors. The thing about Zapier, everyone should understand if you don't know who they are, they basically help you. It's a no-code product that allows you to connect different software with each other. So, for example, if I have a lead that comes into my website through WordPress, for example, it can push that lead into HubSpot. It can also push it into Slack without me needing to know how to code. You can easily set it all up in there, and they're adding a lot of cool AI features. And so they have all these integrations with all these products over here.

1:05And their strategy is just, okay, well, if we integrate with all these products, then let's just put in all these alternatives and competitors and then put in a recipe for everything. And that's how they get their$575 million worth of organic traffic. And it works well for them because as far as I know, they just raised that little – for Y Combinator, I think at the time, they were only doing like 50K checks or something. And they take 7 % of the company. And after that, they never raise money again. and they just been on there they raised money again did they yeah sequoia capital put in a big chunk of money but this is like recent very recent no no no this wasn't recent let's see let's see sequoia capital put in money my guess two years ago yeah that's recent that's not recent raising money in like six months is that is recent okay because they've been around for a very long time when i say recent they didn't raise for a very long time right um but to your point uh 2020 So you're right.

1:59So 2021, this is before they raised, actually. I'm looking at Forbes right now. Zapier reached a$5 billion valuation at$140 million in recurring revenue, despite raising just$1.3 million. And obviously that valuation has come down a lot since 2021, right? But Zapier fundraising Sequoia. Yeah, Sequoia buys shares in the elusive startup, Zapier. This was in 2021. So that's what happened. You're correct. at the five billion valuation yeah that's where forbes got it from yep but here's here's the kicker with zapier right if you had to guess how much revenue and i think that money was money off the table i don't think the company needed cash you're probably right on that too and how much revenue do you think zapier does a couple hundred million in arr so 575 million dollars worth a month in traffic okay times by 12 roughly 6.9 ish billion roughly 6.9 it's late for me i'm doing math in my head it's not probably great it's 9 20 p.m for neil right now right 9 20 it is 9 50 but yeah close enough um so let's say 6.9 billion dollars it's crazy how a lot of these tools evaluate traffic and say it's worth so much but yeah and i'm not saying zapier's doing a bad job i think they're doing a good job it's crazy how it's hard for them to even make a half a billion dollars in arr when they're getting a half a billion dollars worth of traffic per month or 6.9 billion per year, right?

3:26What is the value of the traffic? It's what someone's really willing to pay based on how they can monetize. But it's funny how people value traffic. And I went down this rabbit hole before too, because dude, we used to get SEO traffic for the most randomest terms, how to get more Instagram followers. What is discord? Like everything that you can imagine. And then there were some Twitter posts being like, Neil's traffic is down. He's losing at SEO. And little do they know, my revenue has more than double or triple since that. And everyone was celebrating your traffic going down. They're going down.

4:06And what we decided internally is to stop optimizing and creating content for these terms that were driving us traffic. And these calculators on SEMrush, Ahrefs, even Uber suggests, we're guilty of it as well, would say, look at how much value this traffic is and how much it's worth. Well, who cares how much it's worth? If it's not driving me any revenue, then I don't really care for it. So we stopped optimizing for traffic and we started optimizing for revenue. And a lot of the keywords that were driving us revenue weren't generating that much volume in traffic. And then on top of it, we started finding new keywords that would drive revenue.

4:42But a lot of them were really long tail queries that were like eight, nine, 10 keywords. They drove great revenue, terrible traffic but we just didn't give a crap and i think i'm not saying zapier is doing this on purpose or anything but i think a lot of businesses are guilty and i had to learn this the hard way i'm just saying oh seo i need more traffic you know feed the the addiction it's like a drug give me more give me more give me more i need more rankings but if it isn't driving you revenue who cares and i'm not saying seo is bad i think people got it really wrong where they optimize for visits instead of optimizing for revenue.

5:23Let me ask you this. How much do you think Neil Patel, your website right now is worth? Like how much would you sell your website for? It was funny because you reached out to me saying someone wants to buy my website. It was one of the SEO tools, right? And I just responded with no thanks, I think, or something like that. I didn't even care to discuss it. And I don't know who, but someone reach out to you to reach out to me because they don't want to come to me directly right and whether it was 10 million or 100 million i wouldn't end up selling it even if it was 200 million one is tied to my brand name two my business is big enough where don't get me wrong i would love to take hundreds of millions of dollars but my business is already worth a substantial amount so i wouldn't sell it for a few hundred million bucks um but the funny enough the website probably neilpatel.com probably doesn't drive more than 15 % of our revenue maybe 20 % max i don't know the number off the top of my head but i know it can't be more than 20%.

6:23would you sell it for a billion dollars? yes give me my everyone has a number everyone has a number i don't know if everyone has a number i've really met people who don't have a number but i definitely have a number yeah just the question The way to Neil's heart is have numbers. Have numbers prepared that make him happy. Cool. So look, that's on Zapier. I just Googled, by the way. I Googled Zapier ARR. Eight months ago, they're at 250 or 230 million ARR. They're probably, I don't know, we'll call it 250, maybe 280 or something now. Pretty good, but definitely not worth 575 million a month. But they're going to continue to compound.

7:01They're a very sticky product too. And not worth 5 billion anymore, right? It's just like, well, valuations have come down a lot too. So what are SaaS companies getting these days? The public markets are getting what? Seven times, six times, seven? Six to eight, which is seven. So yeah. Yeah. So let's say there were 10, even at 10 times, you're talking about 2.5 billion-ish and change, right? Yep. Yep. Yep. Yep. All right. What do you got on your side? We just went three in a row on me. On a side note, did you see the India oil example? They bought the Hooters Hotel in Las Vegas. and they renamed it like Oyo or something like that?

7:39No, no. What are you talking about? Is this in here? So this is like the Airbnb of India, right? Oh, yeah, yeah. Oyo, yeah, yeah, yeah. Oyo. So I'm saying the name wrong probably, but they ended up having a$10-plus billion valuation. Their latest round,$2 billion. And I'm not mocking them or I don't think it's funny, but it's something that we can all learn from. And then I looked at them and was like, wait, you guys raised more than$2 billion. and they're trying to be like an Airbnb of Asia or whatever, the rest of the world. And some of the properties they own, some of them they don't. They're for long-term stays.

8:16And one of the big reasons that they got crushed is the economy and valuations were overinflated. The other big reason that they got crushed, and people tend to forget this because this can affect your marketing so much is reputation and customer service. People were just really frustrated with them and the experience that it just tanked their brand. And it doesn't matter how much SEO traffic you have, how many paid advertising you do, how much money you have in the bank. If people really despise your brand and they're over it, you're screwed. That's pretty much the end of the business. It's really hard to turn things around and change people's perception.

8:53And that's why like Warren Buffett always says, you know, he said it before in one of his annual letters. If you have the choice of making a quick buck or not making it and protecting your brand, he always says, choose protecting your brand. And he said, it takes 10 years to build a reputation. It takes 10 seconds to destroy it. Something like that. We're paraphrasing. Yes. And it doesn't matter who you raise money from. You could raise money from air. I think they actually took some money from Airbnb or Sequoia or some of those guys. But still, it's just like you script your reputation. That's it.

9:26It's hard to come back. I got to take a minute to tell you about the agency owners association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Alian, he says, the ability to really post whatever I want and need and the group responds. Great experience members, getting a lot of insights from conversations with other members, getting a lot of value from sessions from Eric, getting advice from others as well.

10:00And so if you wanna grow your agency faster and you wanna peer group to do so, just go to marketingschool.io slash agency. This is a group that both Neil and I created. And our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io slash agency and we'll see you inside. All right. So we are going to talk about some AI overview data that will blow your mind. But before we do, we're going to give a quick reminder or overview, I should say, on AI overviews. And so the beauty of AI overviews is it was just SGE rebranded, so search generative experience.

10:35This is the AI generated answers that you get when you're using Google search results. It kind of looks like perplexity if those of you that have used perplexity AI. It'll give you an answer and then it'll cite a couple of different examples. And it used to be, I think 80 plus percent or so a couple months ago. And now it's come down a little bit. And then I wanted to share some data and then we can react to this data from Alayda Solis. So she's an awesome SEO. And so she says AI overviews research by search engine ranking, which is a tool I believe for SEO. So comparing pre and post rollout results on a hundred K keywords, only 8.71 percent of keywords have ai overviews versus 64 before release so anyway a lot before a lot less now longer queries tend to trigger ai overviews more with 10 word queries triggering 19 of ai overviews which makes sense long trail keywords are also less risky for them to get in trouble on because they're continuing to test this and then the average ai overview text link it text length is approximately 4 4 300 characters you can read more uh just search se ranking ai overviews research.

11:40And then if I click on this graph over here, this will be the last thing is if you look at the data as of January 30th, 2024, you can see 63 % and then 8.71, 63 % had AI overviews, right? Presence in search. And then now the blue is 8.71%. And then you can see now, you know, before it was 12 % AI overview, no AI overviews. Now it's 91 % almost no AI overviews. So anyway, that's some more food for thought as Google continues to roll this out. So we did an interesting study where we looked at the SEO traffic for 400 of our clients within the United States, Google Organic, specifically United States, because that's where AI overviews rolled out.

12:25Before the AI overviews rolled out, our clients had that 400 had 43.92 million impressions. after it dropped down to 43.05. So it was a decrease of 1.98%. The total clicks though, went up from 942 ,000 to 955 ,000. This is week over week comparison, but impressions went down 1.98%, but total clicks went up 1.32 % and click-through rates went up 3.25%. Negligible, but at least it's not backwards. Yep. So yeah, I mean, you know, the, I think this, they'll continue to roll this out over time, but I'm glad, I'm glad that they pulled it back. Cause they got, we talked about this before. There's just a lot of random answers with the AI overview stuff.

13:19So anyway, some food for thought for you. The number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation that also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would have in the last couple of years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing.

13:49They've been a great asset for us, and I believe that they will be a great asset for you. All you have to do is go to marketing school dot IO slash hire. Again, it's marketing school dot IO slash hire to learn more. You can fill out the form there and we're going to place you with the best marketing hires that we can help you find. Google's AI overviews are showing less and less, which you talked about already in that tweet. But Reddit is now actually not a top 10 answer provider for the AI overviews. It was one of the most popular answer providers for the AI overviews. overviews. But according to some research that was released by Search Engine Land, they ended up breaking down how Reddit is not one of the top 10 contributors to the AI overview answers.

14:33And I think this is really important because, dude, I was just at an event this morning, and someone's like, should our business just spend tons of time responding on Reddit so we can get into AI overviews? And I'm like, well, it doesn't work as well as you think, because if you just go and respond to all the stuff that could be related to your space. It's Reddit getting the traffic, not really you or anyone going to your website from it. Yep. That's interesting. I mean, yeah, we're, we're actually, I mean, I'm sure you're getting this too from, from prospects, but we're getting a lot of people asking, Oh yeah, we don't know about our SEO strategy anymore.

15:07We think we want to go into Reddit and Quora. And I just think it's too early to make any moves like this. I mean, there was, there were some clients or prospects, I should say, they were previously heavily relying on their search engine rankings and they were relying on their affiliates and both their pages and the affiliate pages got pushed down. And what is Google actually favoring more now? And I actually have a link on this too. Google's now, if you're an SEO, if you're in e-commerce and you're doing UGC, which is like community content, like Reddit, Quora, those communities tend to work a lot better.

15:39So again, e-commerce and UGC work really well right now. Whereas when you have ad-based websites or affiliate-based websites, those are all getting pushed down now. So food for thought. Yeah. So real question is, is this Google really prefer opinions over, you know, websites, because a lot of these sites are just more opinion-based and they're quick and dirty answers more than anything else. I also think the problem that you have is if you start pulling this stuff into a overviews, a lot of people on Reddit have like sarcastic humor or unique humor. Like, should you jump off a bridge? Yeah, why not go kill yourself, right?

16:16Like, of course, you and I don't mean that we would never recommend that. But where are they getting this from? That's that was one of the responses in the AI overviews. They're getting it from some sites that have dark humor. Yeah, I mean, again, I think the good thing about AI is it's a side note here is it's going to force people to think for themselves a little more. And I don't think enough people know how to think for themselves, especially in today's day and age. All right, everyone. So that is it for today. Please don't forget to rate. Go ahead. Yes. Make sure they go to marketingschool.io slash agency.

16:50I was going to do that. So please don't forget to rate, review, and subscribe first. And then if you're an agency owner and you want to grow faster, go to marketingschool.io slash agency. That's where we help agency owners grow faster. A lot of people have been saying the community has been great. that they've actually got a lot of resources, templates, and a lot of coaching that's helped them sidestep mistakes. So that's the group Neil and I have. Please join it if it seems like it's fit. And there's no long-term commitment. That's the cool thing about it. So that being said, we will see you tomorrow.