Your Business is Invisible to AI (How To Fix it)

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0:25Neil Patel:So a little about me, I'm Neil Patel. He gave you a bio. I've been doing marketing for quite a while now. I'm 41. So roughly 25, you know, 26 years, somewhere around there. And I've seen a lot of data. So I've worked with a lot of e-commerce brands all over the world. And we see what's working, what's not. We've won awards. We were just named Performance Marketing of the Year of Ad Age. This doesn't mean I think I'm the best or anything like that. I still believe I have a lot to learn. I could always improve. But the tactics, the strategies, they work. If they didn't, I wouldn't have a lot of these awards.

1:06Neil Patel:And the reason I point this out is today when I share data with you, if you just take one or two of those things and implement it in your e-commerce business, you'll do much better. As you guys already know, there's a new e-commerce landscape and things have changed. The first way it's changed is there's a lot of players in the space. So when you guys think of a search engine, you guys typically think Google, sometimes chat GPT. Am I correct on this statement? How many of you guys think here is Instagram as a search engine? Raise your hand, be honest, other than trying to find a friend, right?

1:45Neil Patel:Or creep on someone's profile. I don't have to do any of those things. I have two kids. and back in the day, I don't think, yeah, there was actually Instagram when I was dating, but I don't think there was apps like Tinder or whatever they're called. Now, when you think about these search engines, Google has 13.7 billion searches a day. To put it in perspective, they control 27 % of the market share. YouTube has around 3.3 billion daily searches. Instagram, 6.5 billion daily searches 6.5 You know what's booming? When my mom tells me she buys stuff on Instagram And also Timu I haven't bought anything off of Timu yet She's ahead of the curve At least when it compares to me and her But you need to be optimizing for search engines beyond just Google And social platforms have a lot of search volume.

2:48Neil Patel:Even TikTok gets over a billion searches a day. There's a lot of awareness that you can drive from these platforms from the search feature that causes direct purchases. And your customers are searching for answers all over the web, including social media. As you can see here, 9 % of people get their answers to questions today from the social web. Okay? That's a lot of people. Anyone want to guess how many social sites people use on an average month? Zero? Zero is close. Not really. Eight is close. Let's check this room out, okay? How many of you guys use at least more than one social network a month?

3:39Neil Patel:Only one, okay? Only one. Everyone's starting to put their hands on. Only two. It could be Instagram, Facebook, or Instagram and TikTok, only two. Okay, a few. Three, four, starting to see more hands go up, five, six, very few. The real answer is this gentleman right here. The average person uses more than six social networks per month. This is according to Sprout Social. They're actually logging in on a monthly basis to six plus social networks. And this is why the average person has 94.4 % or 94.4 % of people have multiple touch points before they purchase a product. That means they're interacting with you on Instagram or TikTok or Google or ChatGPT, but it's more than one.

4:35Neil Patel:And if you look at the percentage, search is a huge one, social is a huge one, store visits are big, marketplaces, reviews, ratings. these are all touch points. A lot of people, and I definitely do this, I'll see products on Instagram, I go run to Reddit to check out reviews, and then if I like what they say, because Reddit, users usually don't have their username as their actual name, so they're more likely to give the honest feedback, then I run to Amazon and I buy it because I know I'll get it the next day. Right? And it works well. And the purchase journey runs through four behaviors simultaneously.

5:15Neil Patel:When you look at the behaviors, they're streaming, they're searching, scrolling, and shopping. The best performing brands don't treat each of these behaviors as separate, right? They're not really a separate funnel. When you treat them as one and your marketing campaigns are more integrated, we see performance go up typically by 11 plus percent. I know that doesn't seem like a big percentage, but every little bit adds up. And all of these changes with AI and social and being able to buy has changed behavior. And if you think about behavior in today's world, Klarna just posted earnings, they're booming.

6:03Neil Patel:Klarna, you know, the buy now, pay later company. Why is one of the reasons that they're booming? Economic uncertainty. One of my friends works for one of the biggest retailers in the world. All of you guys have shopped there. Maybe not all, but when I say all, at least 99 % of you in the room. It is that big, okay? And they're all over the US and even in some other countries. He was telling me they integrated with one of these buy now, pay later companies. His big fear is they've seen a huge spike of people buying groceries and other items with buy now, pay later. It sucks. The world is tough.

6:49Neil Patel:That just shows there's a lot of economic uncertainty. People are delaying purchases. Some people are buying normally, but a lot of people are seeking deals. And a good chunk are also cutting spending. so what you need to do is make sure that you're giving people what they want if you have deals and promos run them if you can you know appeal to buy now pay later I don't recommend doing it with things that are that people need right if they can't really afford it don't push them because I think it'll help set them back even more. But leverage funnels that have elements like buy now, pay later, or doing deals and promos, especially if you're doing upsells, and that'll just help you generate more revenue.

7:42Neil Patel:We're also finding it where people are prioritizing spend differently. So for example, here, as you can see, Gen Z is big on spending on experiences. things like travel and there's certain generations like my parents generations well they'll spend on everything but dining they don't and I know this is true because my mom doesn't like eating out even Taco Bell she doesn't let my daddy eat there all the time because she feels it's too expensive and they bought their house back in the day in California Southern California and it's been paid off forever and I don't think she's struggling that hard.

8:25Neil Patel:I don't think she's struggling at all, really. But doesn't spend on dining? Well, spend on travel, spend on a brand new kitchen, you know, spend on retirement. I don't even know what that means, but that is a big category. I forgot where we got this data from. It's from quite a few different sources. But, you know, things that just make their lives better. And people are also starting to have a mindset shift. If you look at Gen Z and millennials, I would rather enjoy life and live in the moment than worry about the future I can't control. I saw this firsthand. A lot of my Gen Z friends, we're gonna die.

9:02Neil Patel:We're gonna go to war. COVID, everything is over. I'm just gonna live life to its fullest. Who cares if I have credit card debt, right? My parents, on the other hand, eh, I'll survive. Saved on my money. I don't go home. I have enough food in my kitchen and in my garage and in my extra freezer in case something wrong happens. I buy toilet paper from Costco, as my mom says. I bought it on sale the other day. I have enough for a year, right? They don't worry. And if you look at each generation and how they prefer to shop, it varies drastically. Gen Z, they love TikTok and Instagram. Baby boomers, right?

9:46Neil Patel:In-store, Amazon. I should have Timu up in here as well. Timu's booming. you need to think about what generations you're going after with the products you're selling and make sure you're on the right channels. The same goes with how you convince these people to buy. Not only do some prefer one channel over another, but one thing's been consistent. All generations want to trust the product that they're buying. Testimonials and reviews are huge, easy returns and fast shipping Number one way to build consumer confidence Those three things Trust is a real conversion lever It's why I told you I look for products Or sometimes I discover them on Instagram I then go to Reddit for real reviews And then I go to Amazon to buy them I'm not the only one Amazon's made our life convenient And Gen Z needs 11 brand interactions before following a brand.

10:49Neil Patel:Boomers, on the other hand, only need three. The reason I point this out is if you're trying to build trust, you're trying to get people to know you, you need to be consistent. You need to consistently crank out content on multiple platforms. The more times people see you, the more likely they'll follow you, the more likely they follow you, the more likely they are to buy something from you. It's just a question of when. And with all these changes, we're really seeing that discovery is reshaping buying decisions. So for example here, when you look at AI, it's causing a lot of people to buy. And you can see it in this chart.

11:33Neil Patel:AI doesn't make up that much traffic from chat, GPT, perplexity, Gemini. But when you look at purchases, 5 % is, you know, percentage of the sales is 16, or is it AI traffic is 5 % versus 16.94. I get that's roughly a 3x difference. But look at the traffic difference, 0.58 % versus 21%. That's roughly a 19, 18, 19x difference. That's huge. And when you look at LLMs by market share, the second one is what no one's talking about. Everyone talks about Chad GPT for traffic, and everyone talks about Claude for getting stuff done. You guys agree with this statement? How many of you guys talk about meta AI?

12:21Neil Patel:Raise your hand. One person. You're my new best friend. Because what? There you go. over a billion active users a month. I know Gemini talks about how they have 750 million, but if you look at Gemini's numbers, they talk about monthly active users. ChatGPT talks about weekly active users, two very different things. And Meta, I believe, talks about monthly as well. But Meta's growing at a really fast pace because they integrated their AI into WhatsApp. into Instagram, into Facebook, and it's causing us to all use our products. And it's getting better by the day. And it can drive a lot of purchases.

13:14Neil Patel:And visitors who are using AI, again, don't think just ChatGPT, also think Meta's AI, they stick around longer. They're more likely to buy than traditional search. You got to optimize for it. Everyone talks about, oh, we want our product to show on chat GPT. The amount of companies that are hitting us up in the e-com space on a monthly basis saying, hey, can you make sure when someone searches on Instagram or TikTok, our products show up? It's huge. And we're actually seeing real revenue impact. For companies that are sub$10 million in annual revenue, if you have really good rankings, when you optimize for meta and TikTok, we're seeing around a 13-14 % growth in revenue.

14:01Neil Patel:That's massive. Again, every little bit adds up. And a lot of your conversions that you're going to get from AI are invisible. You see something on ChatGPT, they buy somewhere else and they don't always go to a website. But a lot of conversions are AI influence. As you can see here, the conversions all aren't tracked. And that's okay. but just check your visibility and not just on chat gpt or claude or gemini also on metas platforms because here's something that's interesting did you know for every 100 chat gpt searches roughly 14 are buying you can see it here in the data 6.5 direct 2.9 in store 2.6 google uh 2.1 direct right and direct is split up in different categories because of different funnels.

14:57Neil Patel:But the point I'm getting at here is 14 out of 100 is large. Just because you don't see the numbers directly of people buying within ChatGPT, it doesn't mean that people aren't actually buying. And GEO is already profitable. If you're not leveraging it yet, you're making a huge mistake. If you look at 24 to 2025, ROI has popped up. It is the highest converting traffic channel we've ever seen. It's ranked number one. The second most highest converting channel, anyone want to guess what the second highest most converting channel is? I'll guess for you, SMS. Number three, anyone want to take a guess?

15:40Neil Patel:It's similar to SMS. Email, DM, email. Number three. Number four, paid search. because someone will type in affordable laptop. They click, they buy. Want to guess the conversion difference between SMS and AI traffic? AI traffic converts more than 2x higher compared to paid search more than 3x higher. It is the highest converting traffic channel I've ever seen being a marketer for 25-ish years. you can't ignore it. And things are shifting and changing, right? We're seeing the purchase path change drastically. And you can see it right here. Which social platforms are adults most likely to buy from?

16:39Neil Patel:Instagram? TikTok? And the last one is, I don't shop based on social media. But here's what's interesting that doesn't show up on this. Do you know what social channel they trust the most when they see a product recommendation?

17:00YouTube.

17:02Neil Patel:Shockingly. And I get why. They may not have the most short form views, but they have really long in-depth videos. I know you also have long in-depth videos on Instagram and TikTok and LinkedIn, but it's not as common on compared to YouTube. So when people really watch an end-up video on YouTube, they're much more likely to purchase. And I see it all day long. My dad grows his own food because he doesn't like paying for food at a grocery store. So he grows a lot of food. He has a tiny backyard, but the backyard's full with plants. Watches a YouTube video on how to get squirrels to stop eating his food.

17:46Neil Patel:And he has a really bad problem. So much so he made my sister buy him a squirrel trap Doesn't hurt the animal It puts him in a cage And then every day he takes a cage And goes to the park and lets the animal loose Okay And he records videos So I think he's caught in I think it's like something like 30 something squirrels now In a short period of time And I'm like Dad This is a lot of time He's like well I have nothing to do The squirrels are nice I talk to them while I drive them. And I'm like, okay. I'm like, I hope you're not going crazy. He's like, no, no, no, no, it's fun. He's like, the other day I caught a bird.

18:25Neil Patel:That one, I didn't have to go to a park. I just let it free. So he watches a YouTube video. I'm like, you should go check to see if there's any other solutions. There's these cages that you can put around your fruit, like avocados and stuff like that. So they're less likely to buy them. So he's like, yeah, yeah, you're right. I think it works. So then he now has cages around every single one of his fruits based on some YouTube videos instead of having a cage so that way he doesn't have to drive to the park every day. And he tells me he wants to remove the cage, remove the little things around the fruit and go back to the cage because he misses talking to the squirrels.

19:03Neil Patel:But that's for a different day. But that's what happens with YouTube. People genuinely trust what they see on YouTube. And we're also seeing social commerce habits vary drastically by generation. And you can see it here when it looks at current abandonment due to trust issues. Look at baby boomers versus Gen Z. Gen Z is ready to bounce more than anyone else. Millennials, not as much. Product discovery? Millennials, Gen Z, it's very popular. Baby boomers still discover products Not as much on social networks, but it actually is kind of social. Anyone want to guess what channel I'm talking about?

19:50Neil Patel:Someone said it earlier. WhatsApp. That is correct. They have WhatsApp groups with their friends and they share products within there. So it is social, but a different kind of social. It's more like the old school word of mouth, just in a different way than we all expected. And anyone want to guess what price points do really well with social commerce?

20:20Neil Patel:Look at this data. $10 and below, how likely someone is to buy your product after discovering 9%, 7%, 4%, and then it drastically drops down.

20:34Neil Patel:Just keep that in mind Because if you're selling something It's not just about optimizing profitability You got to look at profitability And total revenue scale And the lifetime value of your customer And optimizing for overall business economics Not just one single transaction

21:00Neil Patel:And look at TikTok shop sales volumes by price point. $5 to$15 really does crush it. $16 to$30, and then it drastically goes down. All right? And if you want someone to purchase from you from any of these social networks, leverage influencers. Look at this data. Awareness. this is time saved. If you leverage influencers for the awareness stage, you save 6%. For interest phase, you save 39%. For decision phase, you save 12%. And purchase phase, you save 22%. Influencers have amazing impact, but most people do it wrong. They leverage influencers that aren't relevant. Just because someone has a lot of followers doesn't mean that they're the right type of influencers.

21:58Neil Patel:They need to be well-known ideally in the space or more so cover that topic. And you don't want to spend all your money on one influencer. You need to bombard the social web with a lot of influencers.

22:12Neil Patel:You can see here as well, customer decisions, purchase confidence. With influencers, it goes up. Return rate goes up. Repeat purchases because influencers go up. Recommendation likelihood goes up drastically because of influencers. Influencers have a big impact. Now let's talk about the customer journey and applying AI to tailor it for you. When most people think about AI, this is where they currently use it for. Content generation, email optimization, SEO and keyword research. The real use of AI that helps with commerce that a lot of people can use outside of generating more ad creatives is personalization.

22:58Neil Patel:Personalization and data analytics, those two things go hand in hand, use the data to personalize more, have a nice lift for conversions. And you need this because the market's getting more and more competitive, ad costs keep rising. Right? And here's a prime example. The cost to create a video ad, AI versus humans, you can see, of course, AI is the cheapest. But when you look at conversion rates and ROI, you tend to make the most ROAS from AI plus human. Humans cost them more, of course. But AI combined with humans does cost you more money, but we typically see a higher return on ad spend. So just keep that in mind.

23:42Neil Patel:It's not all about saving money. It's about saving money while maximizing your revenue and of course, maximizing your profitability. Your offer also matters more than your strategy. When you look at pay-per-click levers, offer is number one, then creative testing, then audience signals, right? You guys get the audience signals. It's like you uploading a list of all your emails of past customers and then looking for more similar types of customers. But your offer beats anything. Everyone always tells me it's in the creative. That's the key. Well, if you're selling a car that is$30 ,000 for$20 ,000 and you had a promo sale, you would sell more than you can imagine.

24:28Neil Patel:If you sold the car for$10, people would think that you're scamming them and you would actually not really get any sales. But that's an example of an offer Tesla has an amazing offer I put a deposit to buy a Tesla I haven't decided if I'm actually going to buy it But I put the$250 down I don't want to spend the money And when you look at Teslas It's pretty much 0 % financing Right, or it's 1 % It's almost free money That's really good The reason I don't know if I want to buy the car is my Honda Odyssey doesn't have a loan on it and it's paid off and it works well and it's only six years old. It's a great car.

25:11Neil Patel:Even has a built-in vacuum if your kids fill chicken nuggets or french fries in there. Right? But it's all about the offer. And creative really does help. Doesn't beat the offer, but when you look at CTRLift, and this is all creative versus like bidding changes for CPA reduction, ROAS improvements, conversion improvements, creative tends to win hands down. And you need to also send more emails. When you send more emails, your repurchase rate increases, in which people are more likely to repurchase from you in a shorter time window. You want to send emails. I know everyone's like, oh, no one checks emails.

25:57Neil Patel:AI summarizes emails. It still works. Now let's put it all together And then we'll hop in with a session with Eric and I So first, bundle Bundling is super important How many of you guys are not bundling yet? Raise your hand, it's okay if you're not bundling One, how many of you are bundling? It's probably a better way to ask Alright, maybe 20 % of the room If you bundle, it's an easy way to make more money And it makes your ads more profitable The second thing is, when you're leveraging different marketing channels, when you combine them, organic and paid, you're going to do better. You can see the data for e-commerce and retail.

26:43Neil Patel:Paid only versus only organic, it works better when you leverage all the channels because people see you multiple times. Remember the stat I talked about? People interact 94.4 % of the time, multiple times with a brand before they purchase. That's a lot. That's why you need to leverage paid and organic because it increases the likelihood that people interact with your brand. In addition to that, match your channel mix with your growth stage. If you're a startup, typically the highest converting channel for an e-com business is paysearch. then social media, then content and SEO. If you're a mid-sized business, call it 10 plus million, paid search is still the most effective, then content and SEO, then paid social.

27:33Neil Patel:If you're enterprise business, brand advertising is most effective than paid search, paid social. That's how people are scaling their marketing channels based on their corporation size. Adjust your marketing channels. What works today may not work tomorrow. You may need to adjust. And you also want to align your messaging. If you're leveraging all these channels and your messaging isn't consistent, your conversion rate won't be as high. This is hard for a lot of companies to do that leverage social media and sell through social. But messaging is super important and you want that messaging to be consistent.