The Expected AIO-pocalypse Hasn’t Happened, At Least Not in the Form We Expected
AI Overviews Are Not The (Only) Problem
Chegg filed a lawsuit against Google for abusing its monopoly position in Search to force companies to provide content that it repurposes for AI answers or Featured Snippets.
The Big Question I Answer in This Article Is Whether Chegg Is an Outlier (Spoiler: It’s Not) or the First of Many
You should read this Memo if you want to understand:
- The nuance behind Chegg’s decline.
- Who else is impacted by AI.
- How to tell if you’re at risk.
- How to build up immunity against AI.
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AI Is Eating into Subscriber Growth
Months before the lawsuit, Chegg’s CEO said AI, not AI Overviews, is eating into subscriber growth.
The Problem Goes Beyond AI Overviews
Students around the world are using AI instead of web platforms. And you can see it in the numbers as well.
Declining Brand Search Volume Is a Sign of Shrinking Brand Awareness, Product/Market-Fit, and User Retention
Bottom Line
Chegg struggled before AI. AI just accelerated the decline.
Who Else Is Impacted by AI?
I looked at other ed-tech sites that lean heavily on SEO and found that almost all of them saw significant traffic losses since ChatGPT came out:
- CourseHero.
- Brainly.
- Studocu.
- Quizlet.
- Numerade.
- Wyzant.
- Khan Academy.
- Codepen.
- Study.com.
- W3schools.
- Stackoverflow.
Red Flags
Chegg and the other affected sites show what red flags to watch out for:
- 80% organic traffic.
- Young target audiences.
- Information sites, especially marketplaces.
How to Build AI Immunity Cells
Not every ed-tech company is in the red. Scribd, Coursera, Udemy, Pearson.
Conclusion
Turning around structural declines, where user behavior and the market significantly shift, is hard. Sometimes, impossible. I’ve learned my own fair share of lessons when Shopify went through the COVID hangover.
Frequently Asked Questions
Q: What is the main reason for Chegg’s decline?
A: Chegg’s decline is attributed to the rise of AI, which has led to a shift in user behavior and a decline in demand for their services.
Q: Who else is impacted by AI?
A: Many ed-tech sites that rely heavily on SEO, such as CourseHero, Brainly, Studocu, and others, are also experiencing significant traffic losses since ChatGPT came out.
Q: What are the red flags to watch out for?
A: The red flags to watch out for are 80% organic traffic, young target audiences, and information sites, especially marketplaces.
Q: How can companies build up immunity against AI?
A: Companies can build up immunity against AI by diversifying their traffic sources, focusing on interactive tools and experiences, and exploring related markets.
