AEO: Golden Age or Blood Bath?

Follow the conversation on LinkedIn.

Search once began with a keyword; this year, it starts with a question. And instead of ten blue links, shoppers will see a generative answer. A single summary that decides who gets seen, who gets discovered, and who disappears entirely.

Or at the very least, that’s the belief of the AEO / GEO movement - that consumers are increasingly turning to AI interfaces like ChatGPT, Perplexity, Google AI Overviews rather than traditional search for product and brand discoveries and recommendations. Over the past 18 months, hundreds of brands, agencies, and startups have tried to position themselves inside AI-powered discovery systems – the chat assistants, search summaries, and shopping copilots that are quietly (and some loudly on X) rewriting how consumers find products online.

It’s all come to a head this past Black Friday. Per NRF, ~200M U.S. consumers shopped during the five-day stretch from Thanksgiving Day through Cyber Monday, marking the biggest turnout since 2017. A troubled consumer under inflationary pressures resulted in a record $44B in topline online sales (with mixed volume results) across Black Friday and Cyber Monday per Adobe Analytics. It’s no surprise that consumers are seeking deals - according to Semrush’s U.S. data, 2025 search volume for “Black Friday deals” climbed roughly 22% year-over-year, averaging 453,500 monthly searches. But the story isn’t just about more traffic - it’s about where that traffic is coming from. And for the growing ecosystem of “answer optimization” players, this holiday season is the first true litmus test. All the pilots, pitch decks, and client promises of the past year will finally meet the only metric that matters – sales.

Here, the initial results are a bit more mixed. There are numerous breathless headlines purporting the higher conversion of AI chat from Semrush’s new AI Visibility Index finding that brands cited in AI answers convert at 4.4× the rate of those reached through traditional search to Microsoft Clarity citing similar results. There is a clear trend of web traffic shifting to AI platforms from traditional search - even before this year’s holiday rush, Similarweb estimated AI platforms drove ~1.13 billion referral visits in June 2025, up 357% YoY, while zero-click searches (e.g., Google’s AI Overview) continue to rise. Sensor Tower reported that consumer use of Rufus, Amazon’s AI chat, increased 86% due to Black Friday and that almost 40% of Amazon App shopping sessions utilized Rufus.

Does AI actually result in better conversion? Amazon remains the only major retail play to publicly attribute incremental sales to AI as it claims Rufus is on pace to pull in an extra $10B in sales. While Amazon reports that users who used Rufus did see higher conversion, it’s unclear if AI usage resulted in higher conversion. While skeptics might make the argument that higher intent consumers are more likely to use Rufus in the first place, it seems undeniable that if consumers start expecting AI-powered recommendations, other retailers and brands have to fall in line to keep up.

The Rise of AEO / GEO / AI SEO / etc.

November 2022, ChatGPT launches. Two months later, it reached 100 MAU. By 2024, dozens of startups were pitching “Answer Engine Optimization” platforms to brands and retailers. Some focused on content generation; others built analytics to track whether a company’s products were cited in ChatGPT, Perplexity, or Google’s AI Overviews. Agencies followed quickly, selling “GEO audits” to help clients understand how they appear inside generative responses.

Brands haven’t stood still either. For instance, not only have both Walmart & Target rolled out AI-powered search and shopping features ahead of the holiday season, they’ve announced (and in Target’s case, already executed on) direct integrations within ChatGPT. Retailers like Instacart have begun experimenting with how to structure product data so it’s readable by AI systems. Tagging inventory for relevance, rewriting descriptions to sound “answer-friendly,” and exploring integrations that feed directly into chat engines.

AEO startups have quickly evolved from simple audits to building data pipelines, knowledge graphs, and visibility tracking dashboards. Larger incumbents like Semrush and Ahrefs have launched their own AI visibility features. Brands are also refining what “AI shelf presence” means in practice. Ensuring they’re cited when consumers ask questions like “Top sneakers under $200 for running a marathon?” Everyone agrees that if generative interfaces become a major gateway for commerce, securing a brand’s presence there will be essential. What’s still missing are the standards of consistent analytics, attribution models, and definitions of what “visibility” even means inside a generative interface.

Lessons from the Past

Every wave of digital discovery has followed a predictable pattern: chaos, consolidation, and concentration of value. Each time, new discovery channels emerged, brands and agencies scrambled to adapt, and three distinct layers of businesses took shape.

• Service
  SEO shops and performance marketing firms emerged to operationalize new discovery tactics. They were the doers – profitable but dependent on client budgets and vulnerable to algorithm changes. Many grew quickly but ultimately plateaued or were absorbed by larger enterprises. iCrossing, once the largest independent SEO agency, sold to Hearst in 2010 for $325 million. 360i (Dentsu, 2010) and Merkle (Dentsu, 2016, ≈ $1.5 billion) fetched higher multiples only after layering in analytics and CRM technology

• Enablement
  Analytics platforms, bidding automation, and visibility trackers translated agency workflows into code. These tools could be sold to thousands of clients instead of dozens, creating leverage that services couldn’t. Semrush, public since 2021, generated $376.8 million in FY2024 revenue and was acquired by Adobe on November 19th for ~$1.9B. Ahrefs, fully bootstrapped, surpassed $100 million ARR with fewer than 100 employees. BrightEdge and Conductor converted agency know-how into recurring SaaS models and raised late-stage rounds.

• Infrastructure
  Sitting below both layers were the platforms that defined discovery economics. They owned the rails, set the rules, and captured enduring value. Google Ads generated over ~$265 billion in 2024 ad revenue, eclipsing the combined scale of every SEO tool and agency beneath it. The $3B acquisition of Double Click in 2008, 8 years after Google launched ads, remains one of the few AdTech wins (along with Trade Desk, AppNexus, Criteo, AQuantive at the time) that VCs dream of. Meta and Amazon have both similarly consolidated digital spend as performance marketing moved fully inside closed ecosystems.

By the late 2010s, platforms proved their ability to flex their powers as the tollgates of the internet. Without clear differentiation and moats, agencies quickly became commoditized. The enablement layer produced some winners but ultimately, the vast majority of value created accrued upstream to the platform, who own the eyeballs. With the advent of video, we’re seeing the story repeat. YouTube is already an advertising powerhouse and TikTok and Whatnot are trying to make it a trilogy.

The Coming Reality Check

Every gold rush hits a reality check - is AEO headed for one? As Black Friday ends, the renewal season has begun. Many of the first wave of AEO contracts signed in 2024 and early adopters will all be contemplating the ROI question. That pressure will likely trigger the first consolidation cycle in this new category. On the buyer side, CMOs will demand visibility tied directly to conversion, not mentions or citations. On the builder side, startups will need to prove they’re more than wrappers around public APIs; without proprietary data or distribution, retention will be tough. On the agency side, many will revert to classic SEO retainers under a new name if AEO metrics prove hard to sustain

Beneath those pressures sit deeper structural challenges. Attribution remains the biggest challenge. Unlike traditional search, many AI-driven interactions end without a click, making ROI murky. As one analyst put it, “zero-click environments break standard attribution.” Budgets are tightening and experiments that can’t tie directly to the funnel are the first to go. Much of what’s being sold today looks like repackaged SEO with a new acronym, easy to replicate and hard to defend. And the major platforms still hold the cards. If OpenAI, Google, or Microsoft internalize visibility tools, they can compress entire layers of this market overnight. The winners will be those that build defensible integrations like proprietary data feeds, API access, or knowledge graph pipelines that models depend on.

The comparison to early SEO is hard to ignore. In 2010, thousands of small firms promised PageRank miracles. Within five years, the market had consolidated to a handful of dominant players. The same pattern is now unfolding here, eventually winners will emerge who build scale, data, or platform advantage, while the rest fade, pivot, or get acquired.

Looking Ahead

The rush around AI-powered discovery is already here. Just like the search boom of the 2000s and the social boom of the 2010s, this visibility wave will eventually normalize. As attribution improves and marketers learn what truly drives ROI, we’ll get a clearer picture of which efforts create lasting impact and which were early experiments.

Black Friday 2025 was the first real stress test. If last year’s signals hold, brands that prepare now could gain a meaningful edge. But it’s still early. The landscape is evolving in real time, and no one yet knows how discovery will settle in a world without blue links. If you’re already seeing this shift in your own work or building to help brands be discovered we’d love to hear from you. Feel free to reach out to chelsea@equal.vc!