AEO vs SEO: What Local Businesses Need to Know in 2025

For over two decades, SEO has been the dominant framework for digital visibility. You optimize your website, build backlinks, target keywords, and climb the rankings. The goal: appear on page one of Google for queries relevant to your business.

AEO operates on a fundamentally different premise. There is no page one. There is no list. When someone asks ChatGPT "Who should I hire to fix my roof in Dallas?", the AI doesn’t return ten blue links. It names a business — maybe two — and explains why. If you want to understand AEO in depth, our complete guide to Answer Engine Optimization covers the foundations.

Here’s the distinction that matters most for local businesses: SEO is a competition for position. AEO is a competition for selection. In SEO, being #3 on page one still gets you clicks. In AEO, if you’re not the chosen recommendation, you get nothing.

Let’s break down the differences that actually impact your marketing decisions:

1. What You’re Optimizing For

SEO optimizes for ranking — your position on a search results page. AEO optimizes for selection — being chosen as the answer by an AI system. These are profoundly different goals that require different tactics.

2. How Authority Is Measured

In SEO, authority comes primarily from backlinks — other websites linking to yours. In AEO, authority comes from entity strength: how consistently and completely your business information appears across the web, the volume and quality of your reviews, and how well-structured your data is for machine reading.

3. Content Structure

SEO content is written for humans who scan pages. AEO content must also be parseable by AI systems. This means explicit question-and-answer formatting, comprehensive structured data markup, and content that directly addresses specific queries without requiring interpretation.

4. Competitive Visibility

In SEO, you can see your competitors on the same search results page. You know who you’re competing against. In AEO, your competitors are hidden inside AI responses. You have no idea which businesses ChatGPT is recommending unless you specifically ask — and the answers can change daily.

5. Speed of Results

SEO changes can take months to impact rankings due to crawl cycles and algorithm update timing. AEO changes can appear in AI recommendations within weeks because AI systems re-index and recalculate entity profiles more frequently.

6. Optimization Surface

SEO primarily optimizes your website and its backlink profile. AEO optimizes your entire digital footprint — website, Google Business Profile, review platforms, social media, directories, and structured data. Every inconsistency anywhere weakens your AEO performance.

This is not an either/or decision. Framing it as SEO versus AEO misses the point. Your customers are using both traditional search and AI tools, often for different types of queries or at different stages of their buying journey.

Where SEO still wins:

Where AEO is winning:

The good news is that many AEO strategies reinforce your SEO. Structured data helps Google understand your site better. Consistent NAP data strengthens local SEO signals. Quality content serves both human readers and AI parsers. The overlap means you’re not doubling your marketing budget — you’re extending it into a new channel.

The businesses that will dominate local markets over the next 3-5 years are the ones that build dual visibility — showing up in both traditional search results and AI recommendations. Single-channel dependence is the biggest risk in search marketing today.

If you’re reading this and thinking you have time to figure out AEO later, consider what’s already changing:

Google AI Overviews Are Expanding

Google is rolling AI Overviews into more query types, more regions, and more languages. What started as an experiment is becoming the default search experience. For many local queries, the AI Overview is the first — and sometimes only — thing users see.

AI-Powered Booking and Purchasing

ChatGPT and Google are integrating direct action capabilities. Users can now book appointments, make reservations, and initiate purchases directly from AI responses without ever visiting your website. If you’re not in the AI recommendation, you’re not in the transaction.

Consumer Trust Is Shifting

Research consistently shows that younger demographics trust AI recommendations as much as or more than traditional search results. This trend is moving upward through every age group. The credibility of "ChatGPT told me" is approaching the credibility of "I found it on Google."

Data Quality Becomes the Competitive Moat

As more businesses compete for AI visibility, the differentiator becomes the quality, completeness, and consistency of your structured data. Businesses with comprehensive schema markup, rich entity profiles, and clean data across all platforms will be systematically favored by AI systems. Learn more about how these systems evaluate businesses in our guide on how ChatGPT recommends local businesses.

Here’s a practical framework for local businesses that want to capture both traditional and AI search traffic:

Step 1: Audit Both Channels

Check your Google rankings for your target keywords (SEO baseline). Then, ask ChatGPT, Perplexity, and Google AI Overviews the questions your customers ask (AEO baseline). Document where you appear and where you don’t. The gaps between your SEO performance and AEO performance reveal your biggest opportunities.

Step 2: Fortify Your SEO Foundation

Don’t abandon what’s working. Ensure your core SEO is solid: Google Business Profile fully optimized, consistent NAP data, clean site architecture, mobile-friendly design, and strong local backlinks. This foundation supports both SEO and AEO performance.

Step 3: Layer On AEO-Specific Optimizations

Step 4: Allocate Budget Intentionally

For most local businesses in 2025, a reasonable starting allocation is 60-70% of search marketing budget on SEO and 30-40% on AEO. As AI search grows, that ratio will shift. The key is to start investing in AEO now while the competition is low and the cost of entry is manageable.

Step 5: Measure Both Channels

Track traditional SEO metrics (rankings, organic traffic, conversions) alongside emerging AEO metrics (AI mention frequency, query coverage, AI-referred leads). Over time, you’ll see which channel is driving more value for your specific business and market.