NerdWallet: Organic Search Result Leads for SMB Financing Still Down, LLM-Generated Leads Converting Better

This quarter, NerdWallet repeated that its SMB financing deal flow continues to lag significantly below last year’s levels because of changes in organic search. Similarly, the company reiterated that the conversion rate of leads coming from LLMs has looked very promising. During the Q3 earnings call, analysts finally asked if LLM traffic meant ChatGPT.

“I’d say the primary driver to think about is actually AI overviews within Google Search,” said NerdWallet CEO Tim Chen. “So because search is becoming more useful, people are searching a lot more. And so we are seeing traffic come through from AI overviews. ChatGPT and Gemini are also driving an increase there. So those are kind of the 2 major drivers in terms of the LLM traffic. When people come through that way, they’re really high intent typically, they’re really held in on finding something in a marketplace, for example. So I think that’s what’s driving some of the higher transaction rates there.”

Though, LLM conversions are promising, they are currently not enough to replace the organic search conversions they were previously generating. CFO John Lee said they expect a continued degradation in SMB in Q4.