When Search Stops Sending Traffic: The Impact of Google AI Overviews on Organic Traffic Monetization in E-Commerce

Generative AI is changing the input-output mapping of digital customer acquisition — the same search channel may deliver fewer visits to firms while preserving downstream commercial outcomes, raising output per surviving visit. In traditional search, consumers perform much of the screening work themselves before they ever reach a firm. AI-generated search interfaces move part of this work upstream into the platform, reducing the number of visits a firm receives while raising the commercial qualification of the visits that remain. We study this shift using the staggered international rollout of Google AI Overviews (AIOV) as a platform-level shock to e-commerce search acquisition. Drawing on a matched Google Analytics panel of 7,083 e-commerce domains, we conduct our main causal analysis on 4,658 domains and 97,236 domain-country units across 131 markets accounting for 99% of pre-treatment organic traffic. Using Callaway–Sant’Anna doubly robust difference-in-differences estimators with not-yet-treated controls, we find that AIOV reduces Google Organic sessions by approximately 2.8%, while transactions decline by less than 0.2% and revenue by approximately 0.5%, with neither downstream effect statistically distinguishable from zero. Conversion rate rises by approximately 2.6% and revenue per session by approximately 2.1%, while average order value is unchanged. The effect progressively weakens along the acquisition funnel — search impressions, clicks, and sessions decline more strongly than transactions and revenue. Mechanism evidence from Google Search Console is consistent with this interpretation. The referrals from organic positions 4–10 decline more than Top-3 referrals, and informational queries show a significant reduction in the concentration of organic impressions in top positions. The results indicate that generative search reconfigures customer acquisition by moving part of demand qualification from merchant websites into the search interface, so that firms may receive fewer visits without losing customers and revenue at the same rate.

Working Paper