The $65 Billion Problem With SEO

Hello,

Welcome to What's The Problem, your briefing on high-value problems waiting for a solution.

This week, we turn our attention to the Search Engine Optimisation (SEO) industry.

Recent seismic shifts, driven by AI and algorithm updates, have created a landscape filled with acute, high-value problems.

Based on our research, we have identified five high-impact problems where a new solution has a strong likelihood of success.

1. The Small Business SEO Black Box

The Problem

The complexity and cost of effective SEO are fundamentally misaligned with the limited time, budget, and expertise of small to medium-sized businesses (SMBs). They know they need it, but they don't know where to start or how to compete.

Why It's Urgent

The rise of AI-driven search and intense local competition has significantly raised the bar for visibility. SMBs attempting a DIY approach are now wasting precious hours on suboptimal activities, causing them to fall further behind their better-resourced competitors.

The Scale of the Problem

An estimated 73% of SMBs lack any dedicated SEO resources. This leads to them losing out on a share of the 80% of local searches that convert to a sale. The opportunity cost for each business can range from £2,000 to £10,000 per month in lost revenue.

Current (Flawed) Solutions

• DIY Platform Tools (e.g., Wix SEO, Yoast): Simple and affordable, but they offer generic, limited advice that fails to create a genuine competitive edge.

• Freelancers: Can provide expertise, but quality is inconsistent, and costs (£50-£150/hr) are often prohibitive for a small business.

• Agencies: Offer a hands-off service but are priced for larger companies, with typical retainers starting at £3,000-£10,000 per month.

The Opportunity

Build a "set-and-forget" automated SEO platform tailored specifically for the SMB market. The model is QuickBooks for accounting: a product that demystifies a complex but essential business function, providing actionable, automated recommendations for an accessible monthly fee in an easy-to-use and understand way.

2. The AI Traffic Heist

The Problem

Google's AI Overviews answer user queries directly at the top of the search results page. This pushes the traditional list of organic links far down the page, effectively 'stealing' the click that websites used to receive.

Why It's Urgent

Rolled out globally in May 2024, this feature caused an immediate and dramatic drop in organic traffic for millions of websites. Content publishers, affiliate marketers, and bloggers, whose business models depend entirely on this traffic, have seen their revenue streams threatened overnight.

The Scale of the Problem

When an AI Overview is present (on over 80% of informational queries), the click-through rate for the number one organic result plummets from 33% to just 11%. For the publishing industry, this represents a potential £7 billion annual revenue loss.

Current (Flawed) Solutions

• Optimise for AI Inclusion: Writing concise, 40-word answers in the hope of being featured by the AI. This is a gamble with only a ~12% success rate and no clear guidelines from Google.

• Traffic Diversification: Focusing on social media or email lists. This is a sensible defensive move but is often less scalable and delivers traffic with a lower commercial intent.

• Pay-Per-Click (PPC) Ads: Buying traffic to compensate for the organic loss. This provides immediate results but comes with a significantly higher cost per acquisition.

The Opportunity

Create a tool or service that can reliably get a client's content analysed and optimised for inclusion in AI Overviews. This could involve deep content analysis, automated structured data implementation, or a platform that reverse-engineers Google's inclusion criteria. A service that 'certifies' content as AI-ready could be highly valuable.

3. The ROI Puzzle

The Problem

Marketers, particularly those in SEO, fundamentally struggle to connect their activities directly to revenue. SEO is a long-term strategy with multiple customer touchpoints, making financial attribution a notorious nightmare for agencies and in-house teams alike.

Why It's Urgent

In a tough economic climate, all budget holders are under immense pressure to prove their value. With AI Overviews disrupting old traffic-to-conversion models, 70% of marketers now admit they cannot confidently prove SEO ROI, putting their jobs and budgets at risk.

The Scale of the Problem

An estimated 43% of all SEO budgets are misallocated due to poor or non-existent attribution. Teams spend countless hours trying to stitch data together from Google Analytics, their CRM, and financial reports, but the link between their work and the bottom line remains tenuous.

Current (Flawed) Solutions

• Google Analytics (GA4): The standard free tool, but it fails to account for the full, complex customer journey and misses "dark traffic" from untagged sources.

• Marketing Mix Modelling: A powerful statistical approach, but it is prohibitively expensive and too complex for most companies to implement.

• Custom UTM Tagging: Manually tagging links to track campaigns. This method is highly prone to human error (a 40% error rate is common) and quickly becomes unmanageable.

The Opportunity

A platform that seamlessly connects SEO performance (e.g., rankings for high-intent keywords) to commercial outcomes (e.g., qualified leads, new sales). This would be the holy grail for in-house SEOs and agencies needing to justify their existence. A focused starting point could be a niche-specific tool, for example, an attribution platform for B2B SaaS companies that integrates with HubSpot and Stripe.

4. The Tool Sprawl Tax

The Problem

The modern SEO professional's toolkit is a fragmented, expensive, and inefficient mess. Teams rely on a collection of single-purpose applications for keyword research, technical audits, rank tracking, and link analysis, none of which communicate with each other.

Why It's Urgent

Tool fatigue is rampant. According to research from Gartner, 61% of Chief Marketing Officers are actively looking to consolidate their marketing technology stack to reduce costs and improve efficiency. The demand for integration and simplification is at an all-time high.

The Scale of the Problem

The average SEO team uses 7-12 different tools, leading to £12,000-£48,000 in wasted annual subscription fees and over 20 hours per month spent just moving data between them. This constant context-switching kills productivity and leads to missed insights.

Current (Flawed) Solutions

• All-in-One Platforms (e.g., Semrush, Ahrefs): These are powerful but are often a "jack of all trades, master of none." They are also expensive, with enterprise tiers costing £500+ per month.

• Custom Integrations via APIs/Zapier: This approach is brittle, with workflows that frequently break. It requires technical know-how and doesn't solve the core problem of having to manage multiple user interfaces.

• Data Warehouses & Dashboards (e.g., Looker): The enterprise solution. Incredibly powerful but requires a six-figure implementation budget and a dedicated data team.

The Opportunity

A unified "SEO Operating System" or a smart dashboard that acts as a central hub. It could start by integrating the 2-3 most popular tools in a more intelligent way than Zapier allows, creating compound insights that no single tool can offer. The key is a superior, streamlined user experience that makes the whole greater than the sum of its parts.

5. Local SEO

The Problem

Maintaining consistent and accurate business information - Name, Address, and Phone number (NAP) - across dozens of online directories, maps, and social media sites is a chaotic and intensely manual process. Even minor inconsistencies can destroy a business's local search visibility.

Why It's Urgent

"Near me" searches have grown 250% since 2020, making local search presence critical for survival. Yet, an estimated 80% of local businesses have incorrect or inconsistent information online, directly harming their ability to attract nearby customers.

The Scale of the Problem

A single inconsistent listing can result in a 20% ranking penalty. Cumulatively, these errors cause businesses to lose over half of their potential local traffic. For a multi-location brand or franchise, this problem multiplies into a significant operational headache and a huge loss of revenue.

Current (Flawed) Solutions

• Citation Management Services (e.g., BrightLocal, Yext): These services syndicate data but can be expensive (£50-£300/month per location), and business data often reverts to its incorrect state if the subscription is cancelled.

• Manual Updates: The "free" option, but it is incredibly time-consuming, prone to human error, and impossible to manage at any kind of scale.

• Google Business Profile API: A powerful tool for direct updates, but it only solves the problem for Google's ecosystem and requires technical skills to implement.

The Opportunity

An autonomous, real-time NAP consistency engine. A tool that not only pushes correct data out but actively monitors and automatically corrects inconsistencies as they appear across the web. Think of it as a "DNS for local business data." A modern, API-first platform with a focus on deep automation would be very attractive to agencies and multi-location businesses drowning in this task.