AI search shift forces SMBs to rethink online discovery

Small and medium-sized businesses in Australia and New Zealand are facing a shift in how customers find local services as AI tools reshape online discovery. Thryv says the change is moving attention away from search rankings and towards whether a business is recommended by AI systems.

At the centre of that shift is what Thryv calls Answer Engine Optimisation, or AEO. It focuses on making a business easier for AI tools to interpret, cite and recommend when users ask detailed questions. Thryv argues this changes how local firms need to present themselves online, particularly as consumers use AI assistants to look for trusted providers with specific attributes such as availability, location, reviews and booking options.

Instead of typing a broad search term and scrolling through links, consumers are increasingly asking complete questions that signal stronger intent to buy. A request for a nearby dentist with Saturday appointments and experience with nervous patients, for example, gives an AI tool far more to work with than a basic location-based search.

That distinction matters because it narrows the field before a customer ever reaches a business website. In Thryv's view, firms are no longer competing only for visibility in a list of results, but for inclusion in a much shorter list of suggested options.

Research cited by Thryv suggests AI use among smaller firms is already widespread. Its 2025 Business Index and Consumer Report found 59 per cent of Australian small and medium-sized businesses and 56 per cent of their New Zealand counterparts are using AI, including AI-enabled software.

The same study also pointed to a gap between how businesses view their digital presence and how consumers see it. More than 72 per cent of Australian businesses and 75 per cent of New Zealand businesses surveyed believed they had a strong digital profile, while only 49 per cent and 52 per cent of consumers respectively agreed.

Rob Hayden, Global Manager, AI Innovation at Thryv, said the change goes beyond the technology itself and reaches into the mechanics of customer acquisition.

"For SMBs, the biggest change is not AI itself. It is where and how discovery happens," Hayden said.

"The old journey was relatively simple. A customer searched, saw a list of links and clicked through to a website. The new journey is vastly different. A customer asks an AI tool a complete question, the tool synthesises information and may recommend only one or two options."

Clarity online

Hayden said this environment places more weight on the quality and consistency of a business's digital footprint. That includes its website, Google Business Profile, reviews, service descriptions, location information, opening hours, booking channels, communications systems and mentions on third-party sites.

For AI-led discovery, these elements need to work together and answer practical questions, not simply promote the business in general terms. If information is incomplete or inconsistent across platforms, AI systems may treat that as uncertainty and bypass the business when producing recommendations.

"Search taught businesses to think about keywords. AEO asks businesses to think about answers. AI tools are looking for the business that best fits the customer's exact need with the least uncertainty. That means clear service descriptions, accurate locations, current reviews, consistent listings, relevant proof points and simple booking or enquiry pathways all matter," Hayden said.

He added that many businesses still manage these online elements separately when they increasingly need to operate as one joined-up profile.

"A business is no longer advertising only through the campaign it runs," Hayden said. "It is advertising through the clarity and consistency of every place it shows up online. If the website says one thing, the listing says another and the opening hours are outdated somewhere else, that creates uncertainty."

"In the AI era, uncertainty is expensive. It can be the difference between being recommended and being left out of the answer. The better you describe your product or service offering, the more likely AI engines are to surface your business in targeted results, and you'll spend less time following up irrelevant leads that don't match what your business offers."

Role of reviews

Reviews are also taking on a different role in AI-driven search, according to Thryv. Rather than acting only as a trust signal for human readers, they can now provide data that AI systems analyse for recurring themes such as speed, reliability, expertise, pricing clarity and communication.

"Reviews have always helped build trust. However, in an AI-led customer journey, they become part of the evidence layer," Hayden said. "AI can read the language beneath the rating. It can see what customers praise you for, who you appear to serve best and when people are most likely to recommend you."

He said businesses should seek more specific feedback from customers instead of generic endorsements.

"SMBs should not be asking for generic reviews. They should be encouraging customers to mention what was done, what problem was solved and what made the experience valuable," Hayden said.

Website questions

Thryv said business websites also need to become more practical sources of information for both customers and AI tools. That means answering common questions directly through headings, concise explanations, service-area information, FAQs, pricing guidance where relevant, response times, booking routes and other supporting details.

Hayden said AI systems favour direct, unambiguous language over broad claims.

"If AI cannot confidently summarise what a business does, who it helps and when it should be recommended, the business has a visibility problem," Hayden said. "SMBs do not need to sound bigger than they are. They need to be unambiguous. The goal is for a customer, a search engine and an AI tool to all understand the same thing."

He argued that this could favour specialist local operators over larger brands if the smaller business offers clear information, recent reviews, accurate listings and a straightforward enquiry process.

"AI can be very good news for focused SMBs," Hayden said. "A specialist local business with clear services, strong reviews, accurate listings and a smooth enquiry process can be a better fit for a customer than a larger brand with a bigger budget. AEO is about making a business's real strengths easier to recognise, verify and recommend.

"The next era of advertising will not only be shaped by who spends the most, but also by who can position themselves as the answer to the natural language questions that customers will be asking of their AI tools."