Alphabet’s Q1 2025 earnings call focused extensively on the expansion of AI Overviews, yet sidestepped a query regarding the impact of AI-generated answers on click-through rates and conversion.
Why It Matters
Perhaps the reluctance to discuss click-through rates and conversion details stems from a reluctance to acknowledge a trend many have observed: click-through rates from AI-generated summaries are lower. Data from the organic search side supports this, as numerous websites have experienced a drop in traffic since AI Overviews debuted last May.
The Exchange
During the call, a JPMorgan analyst inquired:
“Can you give us insight into the 1.5 billion AI Overviews users in terms of rollout scope? And while you mention monetization at roughly the same rate, what does this imply for click-through rates and conversion?”
Philipp Schindler, Alphabet’s senior VP and chief business officer, responded:
“I don’t think this is the moment to delve into the specifics of click-through rates and conversion.”
By the numbers: Schindler reiterated Google’s year-old assertion that AI Overviews “continue to drive higher satisfaction and Search usage.” Additional points from the earnings call included:
AI Overviews
With “more than 1.5 billion users every month,” as stated by Sundar Pichai, CEO of Alphabet/Google. However, AI Overviews are a feature within Google Search, implying that 1.5 billion users encounter these summaries monthly without an opt-out option.
Schindler noted an increase in commercial queries since AI Overviews launched, referencing internal Google data from January shared in a previous blog post.
“For AI Overviews overall, we continue to see monetization at approximately the same rate,” Schindler reiterated, later echoing this sentiment without providing further clarity.
Google Search: Pichai highlighted that over 2 billion people use Search daily, with 5 trillion annual searches. Key points about Google Search performance in Q1 included:
AI Mode: Pichai mentioned that queries in AI Mode are “twice as long as traditional Search queries,” with notable growth in multimodal queries.
Circle to Search: Usage surged by “nearly 40% this quarter,” and monthly visual searches with Lens increased by 5 billion since October.
Revenue: Google reported $66.9 billion in advertising revenue, a 10% year-over-year increase, driven mainly by sectors like financial services, insurance, retail, healthcare, and travel.
(Source: Search Engine Land)
