Last Sunday, Google told the National Retail Federation they're building a future where AI completes purchases without customers ever visiting a website. The next day, Apple announced Google's Gemini will power iPhone intelligence for 150 million US users.
If you're spending money on Google Ads right now, these two announcements, within 48 hours of each other, should change how you think about 2026.
This isn't speculation about what might happen someday. This is Google and Apple showing their cards. And the hand they're playing doesn't include traditional advertising.
What's Already Happening (Before This Week's News)
Before we talk about what's coming, let's talk about what's already here.
If you're running Google Ads for your business, whether you're an HVAC contractor, a personal injury attorney, an accounting firm, or an e-commerce retailer, you've probably noticed something uncomfortable over the past 12 months. Same budget, same keywords, same landing pages. Fewer leads. Higher costs. The phone rings less than it used to.
You're not doing anything wrong. The math changed.
Google's AI Overviews, the AI-generated summaries that appear at the top of search results, now show up on 30% of US desktop searches. When they appear, paid ad click-through rates drop from 19.7% to 6.34%. That's a 68% collapse. Not a decline. A collapse.
Meanwhile, zero-click searches have reached 60% of all Google searches. These are queries where users get their answer without clicking anything. For queries that trigger AI Overviews, that number hits 83%.
The cost side is just as brutal. Average cost-per-click across all industries jumped to $5.26, up 13% from last year. Legal services are paying $9.21 per click. Home services hit $7.85. E-commerce sits at $3.49, which is lower but still up 33% from last year.
Here's what that means in practice: A business spending $3,000 a month on Google Ads with the same targeting as 18 months ago is now paying 13% more per click, getting up to 68% fewer clicks when AI Overviews appear, and converting at lower rates. The effective cost per customer has nearly doubled without changing a single setting.
And that's before this week's announcements.
What Google Just Announced
On January 11th, Google CEO Sundar Pichai took the stage at the National Retail Federation and unveiled what they're calling "agentic commerce," a future where AI agents handle the entire purchase process from discovery to checkout.
Three things launched:
Universal Commerce Protocol. Google partnered with Shopify, Walmart, Target, Best Buy, Lowe's, and 20 other major companies to create a standardized way for AI agents to complete purchases. The protocol lets shoppers buy products directly inside Google's AI interface without ever visiting a retailer's website.
AI Mode Checkout. Users can now discover, compare, and purchase products entirely within Google's conversational AI. The transaction happens inside Google. The retailer fulfills the order, but the customer never leaves Google's ecosystem.
Business Agent. Brands can deploy AI chatbots directly in Google Search. When someone searches for Lowe's, they can chat with Lowe's AI assistant right there in the search results. No website visit required.
Look at the launch partners: Walmart, Target, Best Buy, Lowe's, Macy's, The Home Depot. Notice who's missing? Local service businesses. Professional service firms. Small e-commerce stores. You.
Google's building the future for enterprise retailers first. The infrastructure will eventually open to smaller businesses, but by then, the patterns will be set. The AI will have learned which businesses to recommend based on years of data from the companies that got there first.
McKinsey projects agentic commerce will be worth $3-5 trillion by 2030. Google's not fighting the decline of traditional search ads. They're building the replacement.
What Apple Just Announced
The day after Google's announcement, Apple confirmed what had been rumored for months: Google's Gemini AI will power the next generation of Apple Intelligence. The partnership, announced January 12th, embeds Gemini technology into Apple's foundation models starting with iOS 26.4 this spring.
Here's why that matters for your business.
Apple commands 59.3% of the US smartphone market. That's 150-155 million active iPhone users. Among US teenagers, 87% own iPhones, which tells you where the market is headed.
When someone asks Siri "who's the best plumber near me" or "find me a divorce attorney" or "where should I buy running shoes," that question will now be answered by Google's AI technology, running through Apple's interface. The user gets an answer. The AI makes a recommendation. No search results page appears. No ads display. No click happens.
The user never opens Google. They never see your Local Services Ad or your search campaign. They never visit your website. They just get an answer, and maybe a phone number or a link to buy.
Apple is reportedly paying Google approximately $1 billion annually for this capability, separate from the $20+ billion Google already pays Apple to be the default search engine. Both companies are betting heavily that this is where discovery is headed.
I wrote about this pattern back in September in "Selling to a Thermostat," the idea that AI agents would increasingly make purchasing decisions on behalf of consumers. Google and Apple just confirmed it's happening faster than most people expected.
The Combined Effect
If you weren't already... here's where it gets uncomfortable.
Google is building a system where AI handles transactions without sending users to websites. Apple is ensuring 150 million Americans experience AI-powered discovery through Gemini. Both paths bypass traditional advertising entirely.
But there's a third problem most people aren't thinking about.
Your "Do Everything" Software
The marketing automation tools embedded in your core business software were built on the infrastructure being disrupted. ServiceTitan and Housecall Pro for contractors. Clio and MyCase for attorneys. GoHighLevel for agencies. Shopify's built-in advertising features for e-commerce.
Think about what these platforms optimize for: Google Ads performance. Google Local Services Ads integration. Google Business Profile management. ServiceTitan is Google's official partner for Local Services Ads. Shopify's default advertising tools route through Google and Meta.
That made perfect sense when Google search was how customers found businesses. The question is whether it still makes sense when 60% of searches end without a click and 150 million iPhone users are about to get recommendations from AI.
I reviewed the AI features of the major platforms across these categories. They've all invested heavily. ServiceTitan has 14 AI-powered features. Shopify has AI product descriptions and ad optimization. Legal practice management tools have AI document drafting. These features make operations more efficient, which is genuinely valuable.
What none of them offer is anything related to AI search visibility. No tools for appearing in ChatGPT recommendations. Nothing for Google AI Overview optimization. No strategy for being the answer when someone asks Siri for a contractor, a lawyer, or a product recommendation.
That's not a criticism. It's simply not what these platforms were built for. But it means the marketing challenges coming in 2026 aren't problems your current software can solve.
Here's the pattern Fortune 500 companies figured out 18 months ago: AI search creates winners and losers with almost no middle ground. Brands that get cited in AI responses see a 35% improvement in organic click-through rates. Brands that don't get cited experience the full 65% decline.
The contractors, law firms, and e-commerce stores that AI recommends will get more business than ever. Everyone else will wonder why the phone stopped ringing and the orders dried up.
Should You Turn Off Your Google Ads?
This is the question I've gotten six times in the past month. Here's how to actually answer it for your business.
Filter 1: What's your real cost per customer? Not cost-per-click. What do your closed deals actually cost? Take your total Google Ads spend, divide by actual new customers acquired through ads. If that number has increased more than 25% in the last 12 months, something's broken.
Filter 2: What's your competition density? High-competition keywords like plumber, personal injury lawyer, or running shoes trigger AI Overviews more often and face the steepest declines. Niche and specific keywords still perform better. The more generic your targeting, the more AI is eating your lunch.
Filter 3: Where are your best leads coming from? Compare close rates. Most service businesses I work with discover their Google Ads leads close at 15-20%. Their referral leads close at 60% or higher. That's not a small difference. That's a completely different business model.
Filter 4: What's your fallback? If you turned off Google Ads tomorrow, would your phone still ring? If the answer is no, you're not doing marketing. You're renting access to customers. I wrote about the other half of the strategy in October in "Stop Renting Your Customers."
Here's my honest take: For most businesses, the right answer isn't "turn them off." It's "stop expecting them to do what they used to do." Google Ads are becoming one channel among many, not your entire strategy.
And the data isn't all negative. 65% of industries actually saw improved conversion rates this year. The top 10% of advertisers still achieve 8.4x return on ad spend. High-Quality Score campaigns show 92% higher click-through rates than poorly optimized ones.
Google Ads aren't dead. They're harder. The gap between businesses that optimize aggressively and businesses that set-and-forget has never been wider.
What's Working Instead
If you're going to reallocate budget, here's where the smart money is going.
Answer Engine Optimization. This is the emerging discipline of being the answer AI gives. When someone asks ChatGPT "who's the best electrician in Fort Lauderdale" or "what's the best CRM for law firms" or "where can I buy sustainable running shoes," you want to be in that response. That requires structured FAQ content, schema markup appropriate to your business type, consistent information across every platform, and fresh content that AI systems can cite. It's projected to be a $7.3 billion market by 2031 because no existing platform addresses it.
Nextdoor. 78 million weekly active users covering nearly one in three US households. Here's the number that matters: users trust Nextdoor ads at more than twice the rate of Google Ads. For local service businesses, 77% of homeowners make purchasing decisions based on Nextdoor recommendations. You can start testing for $100-500 a month.
Reddit. Reddit feels like a strange recommendation for a professional services firm. But the numbers work. Lower CPCs than Google due to less competition. Case studies showing 305% return on ad spend and 63% lower cost per acquisition. The catch: it requires authentic engagement, not just ads. Reddit users will call out promotional garbage instantly. But if you show up with actual expertise, they become your best advocates.
Google Business Profile. Still the highest-ROI foundation for any local business. 46% of all Google searches are local. 88% of mobile searchers call or visit within 24 hours. And here's what most people miss: your Business Profile data feeds AI recommendations. Reviews, categories, service descriptions. This information shapes what AI tells people about you. If you haven't fully optimized your profile, do that before spending another dollar on ads.
Your Action Plan
This week:
- Calculate your true cost-per-customer from Google Ads. Not what Google tells you, but what your actual closed deals cost. Compare to 12 months ago.
- Audit your Google Business Profile and fill in every field.
This month:
- Set up a Nextdoor business page.
- Import your Google campaigns into Microsoft Ads.
- Start building content that directly answers the questions AI tools are being asked about your industry.
This quarter:
- Reduce Google Ads spend by 20-30% and reallocate to alternatives.
- Get your structured data and schema markup in order.
- Develop a real strategy for AI visibility, because your current platforms aren't going to build one for you.
Watch and prepare:
- Monitor Google's agentic commerce rollout.
- Prepare your Merchant Center data for when Business Agent opens to smaller businesses.
- Build enough organic visibility that you're not dependent on any single platform.
The Opportunity
Google and Apple just showed us where they're betting trillions of dollars. They're probably right about where discovery is headed. But here's the thing about paradigm shifts: the businesses that move first get disproportionate advantages.
The service businesses, professional firms, and e-commerce stores that figure out Answer Engine Optimization in 2026 will own their markets the same way early SEO adopters did in 2010. The ones waiting to see what happens will be playing catch-up for years.
The good news? You're reading this now, not in 2028 when everyone else has figured it out.
Want to see how AI actually views your business right now? That's what our free AEO audit shows you. You'll know exactly where you stand in the discovery channels that are replacing traditional search.
