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AI Overviews Just Cut Click-Through Rates by 61%. Here's What NZ Businesses Should Do

Google AI Overviews cut organic CTRs from 1.76% to 0.61%, and paid CTRs from 19.7% to 6.34%. Here's what the 2026 data shows and how NZ businesses should respond.

Jason Poonia Jason Poonia | | 11 min read
AI Overviews Just Cut Click-Through Rates by 61%. Here's What NZ Businesses Should Do

Key Takeaways

  • Organic click-through rates on AI Overview queries dropped from 1.76% to 0.61%, a fall of around 65%. Paid CTRs on the same queries dropped from 19.7% to 6.34%.
  • AI Overviews now appear on roughly 50% of US searches. NZ is catching up, with AI Mode rolling out globally on Gemini 3.5 Flash in May 2026.
  • The May 2026 AI Overviews update added more inline source links, an “Explore new angles” suggestions block, and a “community perspectives” panel drawn from forums and social. Net effect: citation visibility is up, but click rates are still well below pre-AIO levels.
  • The early-2026 trend was traffic loss. The mid-2026 trend is recovery for the brands writing genuinely useful, AI-extractable content, and continued decline for everyone else.
  • The right response is not “give up on SEO”. It is restructuring content so AI Overviews can extract clear answers from it, and accepting that “appearing in the answer” now matters more than “ranking in position 1”.

In April 2025 a study by Ahrefs put the first hard number on Google AI Overviews and the click drop: top-ranked content lost around 34.5% of its clicks when an AI Overview appeared above it. A year later the picture is much sharper, and much worse. The latest 2026 data shows organic click-through rate on AI Overview queries has fallen from 1.76% to 0.61%, a drop of around 65%, with paid CTRs falling from 19.7% to 6.34% on the same queries.

That is the headline. Underneath it is a more interesting story: the average is hiding a split. Some sites are losing 60-70% of their clicks. Others are picking up citation visibility and recovering. The difference is whether the content was built for human readers or built for AI extraction. Most of it was built for neither.

This post breaks down what the 2026 data actually shows, what changed in the May 2026 AI Overviews update, and the seven things NZ businesses should do about it in the next 30 days.

1. What the latest CTR data actually shows

The strongest 2026 datasets agree on the direction, if not the exact percentage:

  • 65% drop in organic CTR for queries that show an AI Overview (1.76% → 0.61%)
  • 68% drop in paid CTR for the same query set (19.7% → 6.34%)
  • 50% of US searches now trigger an AI Overview at least some of the time
  • Some sites: impressions up 27% year-over-year, clicks down 36%

The pattern is consistent. Impressions hold or grow, because Google still shows your page in the underlying results. But the AI Overview answers the question above the fold, and a measurable share of users get what they came for without clicking through. The user gets faster answers. You get fewer visits.

What is also clear from the more recent data: the worst of the click loss happened in late 2024 and 2025. The mid-2026 trend is more mixed. Some sites are seeing CTR rebound, particularly those whose pages are now being cited within the AI Overview itself. Citation visibility is the new currency, and it is not evenly distributed.

2. What changed in the May 2026 AI Overviews update

On 6 May 2026, Google rolled out five significant additions to AI Overviews and AI Mode for English-language US searches. The most important for marketers:

  • Explore new angles. A suggestions block at the bottom of many AI responses pointing to related questions and topics. More opportunity for citation, more reasons to click.
  • Community perspectives. AI responses now include a preview of perspectives from public discussions, social media and forums. Reddit, Quora and niche community content suddenly matter more than they did six months ago.
  • More direct source links. Google increased the visibility of source links within AI responses. The “where did this answer come from” question is being answered more explicitly.
  • Subscription highlighting. If you have a subscription to a publication, AI Mode and AI Overviews will highlight links to that publication’s content.

A few weeks later, Google made Gemini 3.5 Flash the default model in AI Mode globally, which improved both the speed and the willingness of AI Mode to extract content from longer pages.

Net effect: citation visibility is up. Click-through is still suppressed. The user who clicks now is the user who wants the original source, not the user who just wanted a fact.

3. Which queries trigger AI Overviews most often

Not every search shows an AI Overview. The pattern, from the 2026 data, is reasonably clear:

  • Informational queries (“what is”, “how to”, “why does”, “best way to”) trigger AI Overviews most often
  • Commercial queries with comparison or recommendation intent (“X vs Y”, “best X for”, “should I”) trigger them frequently
  • Transactional queries with clear purchase intent (“buy”, branded searches, “near me”) rarely trigger them
  • Local queries still favour the map pack and local listings over AI Overviews

For a typical NZ small business, this means blog content gets hit hardest, service pages and local listings less so. The trade-off is real but not symmetrical. A “how does SEO work” blog post is more exposed than a “SEO agency Auckland” service page.

4. The brands that are still winning citations

The sites that consistently appear in AI Overviews share a pattern:

  • Clear, factual definitions early in the page. AI extraction loves the first 100 words.
  • Direct answers to specific questions, formatted with headings that match the question
  • FAQ sections with schema markup, ideally answering the same questions a real user would ask
  • First-hand experience and original data. Generic content rewriting other generic content does not get cited.
  • Named author, real photo, real bio. AI models weight authority signals.
  • Structured data correctly implemented: Article, FAQPage, HowTo, Product as appropriate

This is not a checklist exercise. The underlying point is that AI Overviews extract from content that reads cleanly, answers questions directly, and signals trust. Content that buries the answer 800 words into a “what is SEO” explainer never gets a look in.

5. How NZ businesses should restructure content for AI extraction

For a business owner who has been investing in SEO and is now watching clicks drop, the practical path forward is structural, not creative:

  1. Add a clear definition or direct answer in the first 100-150 words of every blog post. AI models extract from the opening. Bury the lead, lose the citation.
  2. Use FAQ sections at the bottom of important pages, with FAQPage schema. Three to five questions, written the way customers actually ask them.
  3. Match headings to questions. “How does X work” beats “The mechanics of X” by a wide margin for AI extraction.
  4. Cite specific data. A page with three real numbers and a source link will outperform a page of opinion every time.
  5. Show first-hand experience. A real client example beats five paragraphs of generic best practice. “We saw X happen at this NZ client” is the kind of content that gets cited.
  6. Add author bylines and real bios. Especially for YMYL topics (your money, your life). Anonymous content has lost ranking weight.
  7. Keep paragraphs short. Two to four sentences. AI models prefer extracting clear, self-contained chunks of text.

We have applied every one of these to our own content over the last six months, and our glossary and comparison pages were built specifically to be AI-extractable definitional content.

6. The technical SEO that matters more now

The new AI Overviews behaviour does not change the underlying technical SEO requirements, but it does sharpen the priority list:

  • Page speed still matters. AI Mode pulls from pages it can fetch quickly.
  • Mobile rendering still matters. Most search happens on mobile.
  • Structured data is now table stakes. Article schema, FAQPage schema, breadcrumbs, sameAs links.
  • Internal linking matters more than ever. AI models follow links to find related content; orphan pages stay orphan.
  • Crawl health. A page that 404s, redirects too many times, or returns blocked content does not get cited.

If you have not run a technical SEO audit in six months, do one now. The free SEO Audit Checklist we put together covers the technical items in plain language.

7. What we are doing at Lucid Media for our clients

For the SEO clients we work with, the 2026 playbook has shifted in three concrete ways:

  • We are measuring AI Overview presence, not just keyword rankings, on the queries that matter to each client. A page that ranks 1 with an AI Overview above it generates fewer clicks than a page that ranks 3 with no AI Overview.
  • We are rewriting opening paragraphs of high-value blog posts so the answer is in the first 100 words. This is not a creative call. It is a structural rewrite.
  • We are building out FAQ sections and schema markup across service pages and blog posts so each page has a clear shot at AI Overview citation.

None of this is fundamentally new SEO. It is the same EEAT-driven, well-structured, well-authored content the algorithm has rewarded since the Helpful Content Update. The change is that the cost of getting it wrong is now visible in your traffic reports, where it used to take six months to surface.

What it means for your traffic right now

If your traffic has dropped over the past 12 months and you are wondering whether it is AI Overviews or something else, the test is straightforward:

  1. Open Google Search Console and compare clicks and impressions year-over-year by query.
  2. If impressions are stable or up but clicks are down, AI Overviews are likely a major factor.
  3. If impressions are also down, it is a ranking issue, not an AIO issue. Look at the Google March-April 2026 core updates post first.
  4. Run a sample of your top 20 queries in incognito and see how many trigger an AI Overview. That gives you a baseline for how much of your traffic is exposed.

The honest answer for most NZ small businesses: AI Overviews are taking a real bite out of informational traffic, but commercial and local intent traffic is largely intact. The pages that drive leads are mostly fine. The blog content driving brand awareness is not.

Frequently Asked Questions

How much have AI Overviews actually cut search traffic?

The 2026 data shows organic click-through rates on AI Overview queries dropped from 1.76% to 0.61% (around 65%), and paid CTRs on the same queries dropped from 19.7% to 6.34% (around 68%). The Ahrefs study from April 2025 reported a 34.5% reduction. The trend has worsened across 2025 and into early 2026, with some recovery in mid-2026 for sites that adapted.

Should I still invest in SEO?

Yes, but the goalposts have moved. Ranking position 1 is no longer the same prize it was three years ago because an AI Overview above your link absorbs a meaningful share of clicks. The new objective is citation inside the AI Overview itself, alongside a clear, useful page that earns the click for users who want more than the AI’s summary.

How do I get my content cited in AI Overviews?

Write clear, factual content with a direct answer in the first 100-150 words, use headings that match real user questions, add FAQ schema, cite specific data, include a named author with a real bio, and keep paragraphs short and self-contained. AI extraction rewards content that reads cleanly and answers questions directly.

Yes, increasingly. Google rolled out AI Mode globally in May 2026 with Gemini 3.5 Flash as the default model. Coverage in NZ search is still lower than in the US (where roughly 50% of queries trigger AI Overviews), but the gap is closing.

What is the difference between AI Overviews and AI Mode?

AI Overviews are the AI-generated summary boxes that appear at the top of regular Google search results for some queries. AI Mode is a separate, more conversational search experience that uses Gemini to generate longer, more interactive responses. Both extract content from the open web, both compete for the same citation slots, and both reduce the value of position-1 rankings.

If your blog traffic has fallen off a cliff over the last 12 months and you are not sure why, the simplest path forward is an SEO audit that includes AI Overview exposure. We do these for NZ businesses, either as a one-off audit or as part of an ongoing SEO retainer. Book a free 30-minute strategy call and bring your Search Console along.

Sources: Google Search Central: AI Overviews May 2026 update · Search Engine Roundtable: AI Overviews 58% click drop data

Jason Poonia

Written by

Jason Poonia

Jason Poonia is the founder and Managing Director of Lucid Media, helping NZ businesses grow online since 2018. With over 6 years delivering results for clients across New Zealand and internationally, Jason combines technical expertise with proven marketing strategies to help businesses attract more customers and build scalable systems. Background in Computer Science from the University of Auckland.