The Most Significant Shift in Local Search Since Mobile
In 2015, Google's mobile-first indexing changed the rules of local search overnight. Businesses that hadn't optimized for mobile lost visibility they never fully recovered. The businesses that adapted early captured market share that compounded for years.
Google AI Overviews represent the same category of shift — but moving faster.
According to Semrush's analysis of over 10 million keywords, 91.3% of queries triggering Google AI Overviews are informational. That number understates the local search impact because informational intent is exactly how local buyers start their research. "Best HVAC contractor Long Island." "Reliable family attorney Nassau County." "Dentist near me taking new patients." These are informational queries — and AI Overviews are now answering them before a single organic result is seen.
What the Numbers Actually Say
The average click-through rate for a page ranking #1 in Google was 0.73% in March 2024. By March 2025, that same #1 position was generating 0.26% CTR — a 64% reduction in one year. The traffic that used to flow to your ranked page is now being answered by the AI Overview sitting above it.
For local service businesses, this creates a stark reality: the SEO investment that was generating consistent leads twelve months ago is generating meaningfully less return today — not because your rankings dropped, but because the system above your rankings changed.
How Google AI Overviews Work for Local Queries
When Google's AI Overview engine encounters a local service query, it synthesizes information from multiple sources to generate a direct answer. That answer typically includes:
- A recommendation or explanation of what to look for
- Specific businesses or business types, sometimes with names
- Citations to the sources it used
The sources Google AI Overviews cite are not necessarily the top-ranked pages. They are the pages and entities the AI system judges to be most authoritative, most directly relevant, and most trustworthy for the specific query. Schema markup, entity verification, and structured content all directly influence whether your business gets cited.
The Local Pack Still Matters — But the Context Changed
The Google Local Pack (the map-based three-business listing) still appears prominently for local service queries and still generates significant clicks. But its position on the page has shifted — it now frequently appears after an AI Overview has already answered the question.
A prospect who gets a direct AI answer that names one business type as the best option may never reach your Local Pack listing. The AI Overview has already shaped their perception before they see your star rating.
This means Local Pack optimization is now a second-tier signal — important, but downstream of AI citation authority in terms of first-impression impact.
What Local Businesses Should Do Now
The adaptation is not complicated, but it requires deliberate action:
- Get cited by Google AI Overviews. This requires structured content that directly answers the questions triggering AI Overviews in your category. FAQ schema, How-To schema, and Article schema all increase citation probability.
- Build entity authority that Google recognizes. Consistent NAP data, complete GBP, high-quality local citations, and schema markup combine to give Google's AI the confidence to name your business.
- Don't abandon traditional SEO. Pages still rank. Organic clicks still happen. But treat SEO as the foundation and AEO as the layer that captures the traffic that used to land on your ranked pages.
- Track AI citation frequency, not just rankings. Your dashboard needs to show where you appear in AI-generated answers, not just where you rank in the ten blue links.
The businesses that treat Google AI Overviews as a threat to manage will lose market share. The businesses that treat them as an opportunity to capture will own their category for the next several years.