Episode 35
The Paid Search Easy Button Broke on a Google Earnings Call Yesterday
I will start with the main point: Google’s Q3 2026 results show AI search is reshaping discovery, and that will force banks and credit unions to change how they acquire accounts in 2027. Google says search queries are growing at their fastest pace in five years, yet search revenue growth slowed from 19% in Q1 to 17% in Q2 to 12% in Q3, paid clicks grew 8% in Q3 versus 11% year to date, cost per click rose 4%, and the stock fell about 10% after hours. Philipp Schindler pointed first to currency and then to “the lower monetization we were seeing in AI Mode,” meaning AI summaries are reducing ad visibility and clicks. External studies back this up: a 5W study found 22 of the top 75 U.S. banks effectively invisible in AI answers, naming Fifth Third, KeyBank, M&T, Huntington and Regions, and Shon Aguero of StrategyCorps found ChatGPT omitted the local deposit leaders in Columbia, Missouri. My recommendation is a three-legged stool for 2027: earn the answer with AI optimization, buy the answer as sponsored AI responses open up, and go around the answer with proactive omnichannel outreach that creates the priming moment of truth. The institution that aims best beats the institution that spends most; send this to whoever owns your 2027 media budget. I lay out the strategic risk and the counterplay for marketing leaders at $5B to $50B institutions. Google reports search queries rising at the fastest rate in five years while search revenue growth slowed to 12% in Q3 after 19% in Q1 and 17% in Q2. Paid clicks in Q3 grew 8% compared with 11% year to date, and cost per click rose 4%. Philipp Schindler pointed to currency and the lower monetization we were seeing in AI Mode. The net result is a shift in who controls the shortlist at the top of the funnel. People using AI tools increasingly research banking products; Deloitte found 58% of AI users used those tools for banking research. I propose a disciplined three legged stool for 2027. Leg one, earn the answer through AI optimization and plain text disclosure so machines can cite you. Leg two, buy the answer as sponsored responses expand; put a test line in the budget. Leg three, go around the answer with proactive, well timed omnichannel campaigns to create the priming moment of truth. I give examples you can run this quarter: publish rates and fees in plain text, run local ChatGPT searches to see who appears, and shift some click budgets into targeted outreach and follow up. I end with the call I use on the show: The institution that aims best beats the institution that spends most. Send the episode to whoever owns your 2027 media budget.
Takeaways:
- I note Google reports search queries growing at their fastest pace in five years, yet search revenue growth fell from 19% to 17% to 12%, and the stock dropped about 10% after hours.
- I warn that AI mode reduces ad opportunities because fewer ads are shown and fewer ads are clicked, as Pew and SEER data indicate lower click rates on results with AI summaries.
- I share evidence that AI answers make many banks effectively invisible: a 5W study found 22 of the top 75 banks missing, including Fifth Third, KeyBank, M&T, Huntington and Regions.
- I outline my three legged stool for 2027: earn the answer, buy the answer, and go around the answer with proactive omnichannel outreach and priming.
- I advise moving part of your 2027 media budget to tests for sponsored AI responses and to fund proactive priming; the institution that aims best beats the institution that spends most.
Companies mentioned in this episode:
- Alphabet
- Dispatch One
- Pew Research Center
- SEER Interactive
- Deloitte
- ChatGPT
- OpenAI
- Fifth Third Bank
- KeyBank
- M&T Bank
- Huntington Bank
- Strategy Corps
Transcript
Google's search business just did something it hasn't done in a long time.
Speaker A:It made investors nervous.
Speaker A:And if you run marketing at a bank or a credit union, you should be a little nervous, too.
Speaker A:Not panicked.
Speaker A: Nervous enough to change your: Speaker A:This is banking on disruption.
Speaker A:I'm Fred Cadena.
Speaker A:This is a Dispatch One story.
Speaker A:What it means for banks and credit unions in the messy middle and.
Speaker A:And what I'd do about it.
Speaker A:Reported from the trenches, not the keyNote stage.
Speaker A:On October 28th, Alphabet reported its third quarter revenue up 25%.
Speaker A:Cloud more than doubled.
Speaker A:Google says search queries are growing faster than they have in five years.
Speaker A:So why did the stock drop about 10% after hours?
Speaker A:Because search revenue growth slowed 19% in the first quarter, 17 in the second, 12 in the third.
Speaker A:Paid clicks.
Speaker A:The clicks advertisers actually pay for grew 8%.
Speaker A:They'd been running at 11% for the year.
Speaker A:An analyst asked the obvious question, if more people are searching than ever, why is search growing slower?
Speaker A:Google's chief business officer, Philip Schindler, blamed currency first.
Speaker A:Fair enough.
Speaker A:Then he said the strong growth in AI mode queries had an impact because of, quote, the lower monetization we were seeing in AI mode.
Speaker A:When people search with AI, Google makes less money.
Speaker A:At least for now.
Speaker A:Here's why that's your problem and not just Google's.
Speaker A:When Google makes less money on a search, it's because fewer ads get shown or fewer ads get clicked.
Speaker A:Usually both.
Speaker A:The outside data says the same thing.
Speaker A:Pew Research found people who see an AI summary click a regular result about half as often, 8% of the time, instead of 15.
Speaker A:SEER Interactive found paid ads get about a quarter fewer clicks when an AI overview sits on top of them.
Speaker A:Now think about how a new customer finds you.
Speaker A:For years, the playbook was simple.
Speaker A:Someone types best high yield savings account or credit union near me.
Speaker A:You bid, you show up, they click easy button.
Speaker A:Schindler said something on the call that should stop you cold.
Speaker A:Many AI mode queries are upper funnel.
Speaker A:In our world, upper funnel is, should I switch banks?
Speaker A:Where should I keep my emergency fund?
Speaker A:That's where the shortlist gets made.
Speaker A:And right now, it's getting made.
Speaker A:In a conversation where your ad mostly isn't.
Speaker A:Don't kid yourself that your customers aren't asking.
Speaker A:Deloitte surveyed about 2,600 bank customers this summer.
Speaker A:Among the ones using AI tools, 58% have used them to research banking products.
Speaker A:Quick round of hype or real Google's claim?
Speaker A:AI mode queries are mostly new incremental searches and they'll make more money over time.
Speaker A:My call Real for Google.
Speaker A:They're already scaling ads into AI overviews and AI mode, taking them international and launching ads that follow you through a multi turn conversation.
Speaker A:But read the fine print because this is where it gets real for you to show up in those AI placements.
Speaker A:You go through Google's AI Driven Buying Broad Match Performance Max AI Max from what agencies are reporting, you can't target AI mode directly and you can't see it broken out in your reports.
Speaker A:AI Max can write your headlines and pick your landing page if your compliance team reads every APY claim before it goes live.
Speaker A:Sit with that for a second.
Speaker A:My favorite moment from the call Schindler described how an AI agent might carry an ad and the example he picked was a financial product.
Speaker A:Here is the insurance product we found and here is another strong option.
Speaker A:They are currently offering a very special discount in that world.
Speaker A:The offer is the ad and if all you've got is rate, the agent will find someone with a better one.
Speaker A: So what goes in your: Speaker A:Think of it as a three legged stool.
Speaker A:Leg one earn the answer.
Speaker A:That's AI optimization and it's table stakes now and most banks are further behind than they think.
Speaker A:One study ran 31,500 prompts through five AI engines this year, 22 of the top 75 US banks were effectively invisible.
Speaker A:Fifth Third KeyBank, M&T Huntington regions not small banks.
Speaker A:Several only showed up when someone typed the bank's name in.
Speaker A:It gets worse.
Speaker A:Locally, Sean Aguero at Strategy Corps has been in banking for 30 years.
Speaker A:He asked Chatgpt where to bank in Colombia, Missouri, where he lives.
Speaker A:Checking ACD.
Speaker A:A first mortgage.
Speaker A:Nine recommendations.
Speaker A:Only two were banks with branches in town and together they hold about 5% of local deposits, the banks holding the other 95%.
Speaker A:Not one mention.
Speaker A:Meanwhile, plain old Google still showed the share leaders right where you'd expect.
Speaker A:Here's the flip side.
Speaker A:Most of his picks were small credit unions and mortgage shops, the ones with current rates and fees where a machine could read them.
Speaker A:Local is winnable.
Speaker A:Publish your rates, fees and eligibility in plain text.
Speaker A:Then run Sean's test on your own town.
Speaker A:Fresh chat three questions see who gets named.
Speaker A:Leg two buy the answer as it opens up.
Speaker A:Sponsored responses in AI are coming.
Speaker A:Google is scaling them right now.
Speaker A:OpenAI opened ChatGPT ads to deposit accounts this summer.
Speaker A:Case by case.
Speaker A: Put a test line in your: Speaker A:Leg three Go around the answer.
Speaker A:Paid search is reactive.
Speaker A:It waits for demand, then bids on it.
Speaker A:Proactive outreach flips that.
Speaker A:You pick the household first, people likely to move money in the markets you serve.
Speaker A:Then you reach them across channels on your schedule, not the auctions.
Speaker A:Mail and digital, off the same audience, streaming in the same weeks.
Speaker A:Your own team following up.
Speaker A:Remember those banks that only showed up when someone typed their name?
Speaker A:That's the whole point of leg three.
Speaker A:If the AI won't put you on the shortlist, the customer has to bring your name to the question.
Speaker A:I call that the priming moment of truth.
Speaker A:The preference forms before the search does.
Speaker A:Good omnichannel work is how your name gets there first.
Speaker A:And it's not just prospects.
Speaker A:Your own customers are asking AI where to put their bonus.
Speaker A:Sean has a great line for this.
Speaker A:Proactive is the new sticky.
Speaker A:You can see the bonus land the paycheck.
Speaker A:Change the CD coming due to get the right offer to them first and they may never need to ask.
Speaker A:And this isn't a case for spending more.
Speaker A:It's a case for moving some of the money that used to buy clicks into reaching the right people before they ask.
Speaker A:Paid search was the easy button because it let us skip the hard part.
Speaker A:Somebody raised their hand and we paid to stand next to them.
Speaker A:That hand goes up inside an AI conversation now, and Google decides who stands there.
Speaker A:The institution that aims best beats the institution that spends most.
Speaker A:This has been a banking on disruption dispatch.
Speaker A: send it to Whoever owns your: Speaker A:I'm Fred Cadena.
Speaker A:See you in the trenches.
