Pod Insights Marketing School - Digital Marketing and Online Marketing Tips Cloudflare CEO: AI Is Killing The Business Model Of The Web, SEO On Safari Has Dropped For The First Time In 22 Years Because..., Are SEOs F**cked? About this episode In episode #2969, Eric Siu and Neil Patel discuss how AI is reshaping business models and digital marketing. They examine shifts in search behavior, the decline in website traffic, and the rise of platform dominance. The episode also highlights Google’s challenges and the need for marketers to innovate and adapt. TIME-STAMPED SHOW NOTES (00:00) The Impact of AI on Business Models (02:54) Shifts in Search Behavior and Platform Dominance (05:59) The Future of Search and Social Media Integration (08:57) The Innovator's Dilemma and Google's Position (12:12) Adapting to Change in Digital Marketing Prefer single topic episodes? Head over to our YouTube channel. To suggest a topic, go to https://www.marketingschool.io. For more content from Eric and Neil, check out Eric’s Leveling Up with Eric Siu YouTube channel and Neil’s Neil Patel YouTube channel. Connect with Us: Single Grain << Eric's ad agency NP Digital << Neil’s ad agency X @neilpatel, @ericosiu Instagram @neilpatel, @ericosiu Drop Us a Review If You Enjoyed the Episode!
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0:37 Speaker 01 According to the Cloudflare CEO, AI is killing the business model of the web.
0:43 Speaker 00 Okay, so what's the backstory with this one? Because I think we have so many threads that are related to this. So let's give some context.
0:50 Speaker 01 There's no real backstory. It was more so an article on Search In The Land, I think that was quoting him. And he's pretty much just saying that AI is killing the model that we're familiar with. And I don't know if AI is actually killing the typical web-based business model. But I would say that technology, not just AI. Actually, I would go back. Let's not even say technology. I would say platforms are killing the traditional business model of the web. Because if you look at all the platform providers out there, whether it's Facebook, or Instagram, or TikTok, or LinkedIn. Everyone's goal these days is to keep people on platform.
1:33 Speaker 01 I think it was YouTube last year that had $24 million in US commerce sales on their platform.
1:39 Speaker 00 Twenty eight, you said million?
1:42 Speaker 01 Yeah, twenty, yeah, 24 or 28 million, something like that.
1:44 Speaker 00 Users?
1:45 Speaker 01 No, dollars, dollars of transactions.
1:47 Speaker 00 Okay.
1:48 Speaker 01 In platform commerce. They're not really focusing on it, right?
1:51 Speaker 00 You mean it's new, it's nascent?
1:52 Speaker 01 Yes. You look at Instagram, TikTok, of course, they have much more. But the traditional model of the web is you get people, you send them off to your website. You do marketing, you get clicks, you send them off to your website, and then you go from there. I think the thing that's really shifted is AI is making it where it's more brand-related, kind of like television. But they're bringing that to the web, right, with the brand mentions. And I think the second one, and the second one's bigger than the first one, is platforms are trying to keep people. On their own platform all the time for every single thing. In essence, they're copying the Asian model of the all in one app.
2:31 Speaker 01 The US apps have not gotten there yet, and I don't think they'll be fully quote unquote all in one due to monopolistic laws and rules. But I do believe, you know, Facebook is added commerce there. Why won't they and you know, you can collect leads on Facebook. Why can't you talk to someone from a company through their WhatsApp application integrated with an Instagram? And now all of a sudden you're talking to corporations, you're hiring them and you're communicating. You start cutting out tools like the slacks, the teams, and they start building all this stuff within platform.
3:04 Speaker 00 So the other thing too is agents are ultimately going to be making a lot of decisions. So for example, if you want to code an app from scratch, let's say you use Replit or something. Ultimately, you and I don't want to figure out where am I going to host this? How am I going to deploy this? What am I going to use X, Y, and Z? So the agents are going to be making that call. And so I don't know how that's going to look. Maybe there's agents marketing to agents, but there's going to be, there's going to need to be something there that makes the decisions for you. And we've kind of talked about this already, but we believe that website traffic is going to continue to decline over time. Not saying you should abandon your website right now. I think you should still have a website no matter what. But it is changing. I mean, just earlier this week, I was just talking to just multiple different meetings. There was, I met with my YPO forum, so that's was just called out a CEO group, right?
3:47 Speaker 00 And I think yesterday I was FaceTiming with, with one of my friends who you know. And he's like, yeah, I haven't used Google this week. And then earlier, when I was talking to that CEO group, most people are you, they, they tend to be defaulting to L L M's more, right? Now that being said, I was at a coworking place yesterday and I saw like an older dude, you know, with Google pulling up and I saw his behavior. I'm like, it's, it's just, but behavior is evolving over time. And then this actually brings us over to the fact that Apple said first time ever in 22 years that SEO on SEO traffic, more specifically, Google traffic on Safari has dropped for the first time in 22 years.
4:20 Speaker 01 They've seen Google traffic drop in twenty two years.
4:23 Speaker 00 Correct. First time ever in twenty two years.
4:25 Speaker 01 But according to Dados, more people are starting to use Google. And if you look at the numbers, Google has released. Google has thirteen ish, or let's let's use annual. They went from, or actually, let's use daily. They went from eight ish billion searches a day, eight point five to around thirteen point six to thirteen point seven billion searches a day.
4:46 Speaker 00 I believe it. I I think um I just, I don't think they're gonna be as dominant as they once were. That's that's that's what I believe.
4:52 Speaker 01 I I agree with that. And when I say, and I think we're saying the same thing when it comes to dominance. We're not saying Google's declining. We're saying that people are using multiple platforms to get the answer.
5:03 Speaker 00 Yeah, I think I I just, maybe you can speak from your your your back. I I think I think you have said that you still continue to use Google quite a bit. For me, I'm defaulting a lot more. I mean, if you look at my home screen, I've had it like this for a while. But my home screen does have Claude on the left side, which I actually never opened. But the one I open the most right now is ChatGPT. Because it's it's getting better. I think it's doing a better job, at least for me, in terms of searching things and and finding solutions for me. And there's just, I I don't know, it just keeps getting better and better. So I'm getting, and humans are lazy. We want things done for us.
5:36 Speaker 01 Yes. The big thing that I'm seeing right now is forget how you use Google and and traditional search. If you look at your patterns right now for search, they're drastically different than two years ago, for sure. And I think that's a big thing that no one talks about because everyone's like, Google's dying. The data we're seeing, if you even look at their earnings and their ad revenue, they're not dying, like their numbers are actually going up and to the right. But the thing that is dying for Google is they're not getting the new type of searches that people are typing in on, let's say, ChatGPT as frequently as Google would hope that they would adapt to Google search, right? If you're typing in specific questions related to sleep or whatnot, or trying to get research done.
6:21 Speaker 01 Your search queries aren't two, three word question or keywords. They're so whole sentences and some of them may be twenty, thirty words. A lot of people are not typing in those queries into Google. That's where they're missing the boat.
6:33 Speaker 00 Yeah, I actually have this, this graph over here. So what we'll pull this up, but this is just from similar web. This is April twenty twenty five versus March of twenty twenty five. So you can see the blue over here, the only one that's gone up month on month thirteen percent is chat GPT, obviously, right? But everyone else down here is declining. So Google down three point one eight percent. YouTube's down two point one three percent. Facebook down three point five percent. So anyway, that's not to say chat GPT is going to be the big winner. Long term, I don't even have a prediction for that. I just think that these things happen slowly and then all of a sudden.
7:05 Speaker 01 They're saying Facebook and Instagram's traffic and TikTok is all down?
7:08 Speaker 00 Correct, yeah, Wikipedia is down six percent. Reddit's down three point seven seven percent.
7:13 Speaker 01 It's interesting stat, the only problem I have with that, because we look at a lot of similar web data. And we find that. And it's not just similar web, whether similar web, SEMrush, Uber, SaaS, Ahrefs, a lot of their traffic estimations are just off. And they're off substantially. Because we have so many people that authenticated with Google Analytics. A lot of times we see chat GPT. We see similar web showing traffic declines when we're actually seeing traffic increases. The big thing for me is I look at earnings calls. Because earnings calls end up revealing data from the corporation. Because these are publicly traded companies. I don't know for certain if Google's traffic is dying or not. But their revenue is going up and the number of people performing searches are going up.
7:58 Speaker 01 That could be the people who are searching are searching more, but they're getting drop offs. But my hypothesis is if they're getting more daily searches, in theory, their traffic is going up. I do think chat GPT is growing faster from a percentage wise, though, when it comes to traffic.
8:12 Speaker 00 So this is interesting. This is what you just touched upon. So in platform clicks over here, this is the, the green line is Google. So it's moving up, right? This person that, that put, that put this picture, his name is Thailand, uh, Enberger. So he said, credit growth is likely happening because Google is making users click on more in platform links. So increasing pages per visit for Google dot com is an indicator that users are spending more clicks within Google's search results. Since most of their actions like paging, refining searches or clicking images, change a URL, but keep visitors on Google's domain. Higher numbers suggest Google's capturing more clicks internally rather than users quickly leaving for other sites.
8:48 Speaker 01 Yes, but that doesn't necessarily mean Google, based on that chart, it doesn't mean that Google's necessarily getting more traffic or less traffic. It could be users clicking more with an app, making up for traffic downfalls. I don't know.
9:01 Speaker 00 I think, look, I think Google's still gonna be a fine business long term. They've got a lot of data. I mean, they have YouTube, they have, they have Android, they have, they have all these things. Who knows if the DOJ is gonna break them up? But I, I've got something interesting for you, and then we can give everyone kind of a practical take on what to do here, but what I've noticed this week. So from the SEO world, yesterday I talked to a couple of people from a big agency, okay? And funny enough, I'm interviewing a couple of them right now. They were passed over to me. These are SEO directors at these, I was like, how come all of you are looking to leave this agency right now? They're all from the same company. He's like, they're like, oh, haha, because we aren't closing any more SEO deals right now, and it's been a while, right?
9:41 Speaker 00 So we can chalk that up to it's a poor economy, but we can also chalk that up to like, the fact that they just aren't doing innovative work anymore, and they can't charge those prices. The other thing I'll say too is, for the first time, yesterday I kind of half-assed the post on LinkedIn, like, hey, we're looking to hire some killer SEOs. This is the first time ever, I've had so many people hit me up. I've had people hit me up from like these well-known companies, and I'm just like, why are all these people hitting me up? I'm like, oh, the job market's a little shaky for SEOs right now. And there was a company that actually poached one of our SEOs recently, and I was talking to my, my guide that was poached, and then I was like, tell me about the company that you're going to now. And it is, let's just call it a very boring services company. I'm like, what do you think they're gonna have you do there?
10:21 Speaker 00 You're gonna be optimizing for traditional SEO, and they're scared that they're losing all their traffic right now, and you're gonna have to fix that. And I'm like, you should take the job because all you've known in single grade, I want you to spread your wings, you're gonna learn, right? And maybe you end up starting your own thing afterwards, or maybe you come back to us, like, I don't know, but I think you should take it, right? Just to see what else is out there, and he's gonna do that. But there are desperate poaching attempts happening, and on the other side, there's so many, first time ever, I've seen so many SEOs desperate to find like another home, because I think they see the floors very shaky.
10:51 Speaker 01 Yes, but when I look at search in general. Again, I like looking at data. In 2022, Google's revenue grew to $282 billion. It was a 9.78% increase over the previous year, 2021. When you look at 2023, Google's revenue increased to $307 billion. It was an 8.68% increase in revenue. You look at 2024, Google's revenue increased to $350 billion with a 13.87% growth rate. So they're actually starting to increase in growth rate again. And it just goes to show, yes, a lot of things are shaky in digital marketing, but these platforms are doing better than before.
11:35 Speaker 01 It's just that the attention is getting spread to multiple platforms instead of just one platform. But the data is clearly showing that none of this is dying anytime soon.
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12:19 Speaker 01 Do you, are you familiar with The Innovator's Dilemma?
12:21 Speaker 00 Uh, no.
12:22 Speaker 01 Okay, so Clayton Christensen, so he wrote this book called The Innovator's Dilemma. It basically describes the paradox where successful companies fail by doing everything right because they have to focus on sustaining what they have right now. Um, and they have to almost ignore disruptive innovations because it screws up their business model because they had this cash printing monopoly, right?
12:40 Speaker 00 Yeah.
12:40 Speaker 01 Um, let's call it what it is, and I think it's a great business. Um, and then it's like, because they have to decide what to trade off on, they, they could potentially miss the next wave, right? So you think about Kodak, they ignored digital photography. Um, Blockbuster dismissed Netflix, right? Or Nokia missed the smartphone shift. Um, Microsoft missed mobile, right? And they, they kind of got into a little trouble there, right? Um, the point is, Google's in that innovator's dilemma right now. The good thing is, they've got a lot of data.
13:05 Speaker 00 Gemini is a great model. They've got a lot of great products, YouTube and all that. So I think they might try to ride the wave where they, once they see it really start to switch, maybe that's when they turn it on. But I still think that's a long ways away. But I do think we're starting to see the, the cracks in the model.
13:21 Speaker 01 Yes.
13:21 Speaker 00 I think there, they have enough smart people. They have a lot of smart people at the company to help them figure out maybe how to land a plane here. But I, I don't think search just dies overnight, which, which is, people like to blow this stuff up. So.
13:32 Speaker 01 They do. I, I think search is going to change and it already has changed. It's a question of who will be the leader. And I don't think one person is going to be the leader anymore. I think search is going to turn to social media or be very similar to it.
13:47 Speaker 00 It's the search everywhere optimization thing.
13:49 Speaker 01 Yeah, but if you look at social media, Facebook is no longer the dominant player. I understand Meta as a company definitely is. But Facebook, YouTube, Instagram, TikTok, LinkedIn, X, they all are pretty popular. And in certain segments, some are more popular than others. Like I would say there's more political information on X that I see left and right than I would on other platforms. That could just be user behavior, but in general, I do believe people on X are more vocal about politics than some of the other platforms out there. Now, if you look at search, it has been, Google has been the leader for a very, very long time. And they've controlled the majority of the market share when it comes to a traditional search.
14:32 Speaker 01 But now people are searching on social media because if you're looking for a handbag, a lot of times people just want to see inspirational images of who has the latest handbag on Instagram. And which celebrities are wearing them because a lot of people copy these celebrities. That's not really traditional search, although traditional search has deals like Google has deals with TikTok. So they're pulling in information. They own YouTube, of course, so they can pull that in. But I think the same thing's going to happen with search in which it's going to be, you use Google for, call it. 10 or 20 different use cases, use chat GPT for three main use cases and then the list goes on and on where you're like, oh, I'm gonna use perplexity for this and that. And next thing you know, it's like social media where you have seven or eight platforms and they specialize in different things.
15:14 Speaker 00 Dude, I'm gonna cancel my perplexity right now. You just reminded me. I never use it and I pay 20 bucks a month for this thing.
15:20 Speaker 01 Dude, that adds up. That's $240 a year.
15:22 Speaker 00 Dude, it's too much money, man. But I think this is net, a net positive because in my mind, when marketing gets harder, it's more of an opportunity for people that adapt. Or people who adapt. And so if you're willing to adapt, you're willing to learn. And this is what this podcast has always been about. We've been doing this for seven, eight years now. And the thing that this podcast forces us to do is to stay up to date. And it forced, like in business, not even just marketing, in business, you've got to be a relentless learner. And the one thing, the one knock I have on the traditional SEO industry is that they complain instead of trying to get better, instead of trying to adapt. This forces them into that and I'm glad it forces them into that.
15:58 Speaker 01 Yeah. And one other note is when you're adapting, you gotta really look at the data. Like when Eric and I go to events and we ask people who use this Facebook, majority of the room doesn't raise their hands for Facebook. You agree with this, right? I experienced that at most conferences. But if I look at Facebook's stock, I understand they have WhatsApp, which doesn't really make them that much revenue. It really is mainly Instagram and Facebook. I don't think Oculus generates so much revenue either. But in 2022, their growth declined 1.12%. They're at 116 billion in revenue. In 2023, 134 billion in revenue with 15% growth. In 2024, 164 billion in revenue with 21% growth.
16:43 Speaker 01 Even though people are saying like, oh, Facebook is dying, the numbers and the revenue is showing that it's not dying. It's still being used and they're making a killing from this cash cow. So just because certain people have opinions on what they think is what's working or what's not working, the data in most cases will tell you the true story.
17:02 Speaker 00 Yep. Well, I'll tell you what, I just canceled my perplexity account. So
17:05 Speaker 01 That's awesome.
17:07 Speaker 00 Yeah. Here's another thing. I just like, we had a demo from this demo request from this company. It's like, oh, can you, can we not do the demo? And then can you just send us the deck instead and send us the pricing? And I was just like, sorry, we don't do that. So you have to sometimes just put your foot down when people try to do this and they try to change the thing on you.
17:26 Speaker 01 Why won't you do that?
17:27 Speaker 00 Because one, this guy seems like a tire kicker. He works for a big company, but then it's, we couldn't find any information on him, right?
17:35 Speaker 01 Is his email address at that big company?
17:38 Speaker 00 It's a company in Mexico. I'm just looking at it right now, but
17:41 Speaker 01 They don't use LinkedIn a lot in Mexico as FYI.
17:44 Speaker 00 They don't, yes. But when they start to ask for all these things upfront, I'm just like, oh, you're just trying to change a lot of this stuff in the beginning. And it's like, this is how it's going to be working with you versus when you talk to like, you know, a couple of companies signed recently. They're just, they just follow the process and they're just very easy about it. We just like, it's going to be easier going in the beginning and we're only doing a limited amount of pilots right now. So that's not to say we won't entertain these in the future, but generally right now, we just don't want to deal with people like this who try to change too many things in the beginning.
18:12 Speaker 01 Even if he's trying to change some things in the beginning, if you really believe he works for that corporation because he has that company email address and you don't, you know, he's not working for a competitor, you're better off just sending him the deck and the pricing because what's the worst that's going to happen?
18:27 Speaker 00 We don't have a deck.
18:28 Speaker 01 Oh, you don't have a deck. Okay. Now I understand.
18:30 Speaker 00 Exactly.
18:31 Speaker 01 If you had a deck, I'm assuming you would have sent it.
18:33 Speaker 00 Yeah, yeah, yeah. It's like, that's two seconds, but now I'm just like, I'm like, I'll come back to you.
18:37 Speaker 01 I agree with you because you have enough leads to go focus on the ones that fit the framework that you're selling right now.
18:42 Speaker 00 Yep.
18:43 Speaker 01 But eventually have AI help you create a deck.
18:46 Speaker 00 Anyway, that's it for today, guys. We'll see you tomorrow.
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