NerdWallet: ‘AI Answers Are Taking Organic Search Clicks Away’

NerdWallet, which operates one of the largest online small business lending marketplaces in the US, is experiencing the competitive pressures of AI in real-time. For example, the company has long depended on organic search traffic to generate customers, but Google’s search results now serve more than just links.

“I’d say the story hasn’t changed much since last quarter. Organic search is still pretty challenged,” said NerdWallet CEO Tim Chen during the Q2 earnings call. “What’s happened incrementally is we’ve seen AI-overviews roll out to a much broader swath of queries in recent months, which is resulting in more people getting answers without ever clicking through to websites.”

The company revealed that SMB products revenue of $25 million was down 4% year-over-year, “primarily due to pressures in organic search traffic.”

NerdWallet, however, has also noticed early signs that LLMs are generating referrals for them.

“What’s probably less obvious is that people who click through from LLMs have materially higher intent to transact than people who click through from search engines,” Chen said. “So, while encouraging in terms of that being a new growth channel, it’s still pretty small.”