Why AI Optimization Is The Next Growth Lever For Ecommerce — Dr. Jonathan Snow | How To Optimize Your Brand For AI Search, What Drives Performance On Each AI Model, How To Use AI For Retention, How To Track AI-driven Sales And Referrals (#430)

In this episode, we explore why AI is the next big business lever for e-commerce. 

Dr. Jonathan Snow, Chief Innovation Officer at Avenue Z, shares how brands can leverage AI for media buying, content creation, and search optimization to boost visibility, conversions, and retention. 

He also explains the biggest risks for brands that aren't adapting to AI and how a new "AI Search Visibility Index" helps businesses stay ahead.

Topics discussed in this episode:  

• Why brands need to launch 500-1000 ads per month. 
• What the AI Search Visibility Index reveals. 
• How AI search traffic converts at higher rates. 
• Why most AI search traffic is invisible to tracking. 
• What three pillars drive AI search optimization. 
• How brands can use AI for retention marketing. 
• What results a TikTok Shop brand achieved. 
• Why brands need eight-figure revenue budgets. 
• How brands risk being left behind. 
• What post-purchase surveys reveal about AI traffic. 
  
  

Links & Resources 

Website: https://avenuez.com/
LinkedIn: https://www.linkedin.com/in/drjonsnow/
X/Twitter: https://x.com/drjonathansnow
Blog: https://www.blog.jonathansnow.com/

Get access to more free resources by visiting the show notes at
https://tinyurl.com/35459nas

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Transcript

00:00:00:03 - 00:00:15:02
Dr. Jonathan Snow
So right now there's no way to really optimize for conversions from the LMS. But we do notice is that traffic that does come from one of those referral sources and perplexity, they do convert at a much higher rate than someone that just came in through traditional search.

00:00:15:03 - 00:00:19:03
Claus Lauter
What's the biggest risk of brands who are not adapting to AA?

00:00:19:05 - 00:00:23:07
Dr. Jonathan Snow
Yeah, there's two ways. I mean, if you're.

00:00:23:09 - 00:00:55:05
Claus Lauter
Hello and welcome to another episode of the eCommerce Coffee Break podcast is changing eCommerce fast and the brands using it are winning. It's boosting visibility conversions and retention like never before, but many founders are still don't know how to use it for real results. Today we explore why optimization is the next big business lever for ecommerce. And joining me for that today on the show is Dr. Jonathan Snow is the chief innovation officer at Avenue Z. for Time founder, U.S. Air Force veteran and top adviser for Shopify Brands, Shopify, Plus, Tik-tok Shop and many more.

00:00:55:07 - 00:01:06:10
Claus Lauter
You also served on the board of George and speaks as major industry events like Compliance, Climate Emergency Tech Summit and DTC. So we have a lot to cover. Let's welcome Jonathan to the show. Hi, John. How are you today?

00:01:06:12 - 00:01:08:05
Dr. Jonathan Snow
Doing well. Thanks for having me.

00:01:08:07 - 00:01:19:11
Claus Lauter
Some really nice topics today. We were talking about air and how it affects marketing and everything that comes with it. What's the biggest problem you see right now with e-commerce brands when they approach?

00:01:19:15 - 00:01:41:11
Dr. Jonathan Snow
I right now, the number one biggest issue that brands aren't even thinking about. How has media buying changed given AI and machine learning have gotten much stronger in 2025 over previous years? And how should that be impacting your strategy? So a lot of brands are stuck in the old ways of media buying and the launching 20 high end creatives per month.

00:01:41:11 - 00:02:01:11
Dr. Jonathan Snow
Or maybe 30 or even 50 if they're really feeling good that month. But that's a fraction of what they need to be doing to truly reap the benefits of the new machine learning models that net Applovin and some of the other channels have deployed. So instead of launching 50 ads per month, how can you launch 500 to 1000 ads per month?

00:02:01:13 - 00:02:12:01
Dr. Jonathan Snow
And so we've been focusing a lot on how to meet the level of volume that is sufficient for machines to actually serve the right and to the right person at the right time.

00:02:12:03 - 00:02:31:17
Claus Lauter
Mm hmm. Now, obviously, it's highly competitive. And you see that the different tools, the different platforms like Made on Google are adding more and more tools to that. And it might be overwhelming for brands out there to really get a grip on what's happening. What's the best approach right now in being, let's say, on beta to really facilitate all the features they offer?

00:02:31:19 - 00:02:57:05
Dr. Jonathan Snow
Yeah, you need to pick and choose what how many tests you have going on at once. You can get really overwhelmed by that. Simple is better. So consolidating your ad account and trying to drive true learning through AB testing in an actual experiment rather than have a bunch of different tests going simultaneously. The actual AI tools that will help you succeed and meet the volume requirements of the platforms are actually external to the platform.

00:02:57:07 - 00:03:26:01
Dr. Jonathan Snow
So are you using AI creative tools to help you create iterations of top performing creatives at scale? Are you using ad publishing tools that are third party using the API of the different ad platforms so that you can launch 100 ads in a matter of minutes rather than hours? So and those are all external to the platforms are integrated with the platforms, but we're spending a lot of our energy to reap the benefits of AI in the platform, actually outside of the platform through those third party tools.

00:03:26:03 - 00:03:38:21
Claus Lauter
Mm hmm. It's a very interesting approach there. And I think you're deeply into AI right now. So at that, you have created some thing that's called the AI Visibility index. What does that mean?

00:03:38:23 - 00:04:05:15
Dr. Jonathan Snow
Yeah. So now we're talking about AI search optimization and the world of search and chat with Chad, GPT and perplexity, Google AI overviews and so AI Search Visibility Index Report is a series of industry leading reports that focuses on a different industry or different product vertical. Every month. And so what we do is we're a let's just our last report that came out was beauty and eCommerce.

00:04:05:15 - 00:04:28:05
Dr. Jonathan Snow
So we looked at the top 60 beauty brands and came up with a series of prompts that related to all 60. And then we started tracking how do each of those 60 brands rank in AI search optimization versus the others for the prompts that we had selected? And then we're looking at how do they rank and chat CBT versus the others, how do they rank and perplexity, how do they rank and Google AI overviews.

00:04:28:07 - 00:04:50:10
Dr. Jonathan Snow
And what we find is that every model is very different. So chatty beauty, like certain things way more than perplexity does, and Google AI overviews. And so these visibility index reports are really bringing those things to life. And essentially we're just looking at what percentage of the time was your brand mentioned in each of those prompts and each of the models and then with what sentiment was it mentioned?

00:04:50:15 - 00:05:06:04
Dr. Jonathan Snow
Was it mentioned favorably by a chat and the others, or was it neutral or was it negative? And so it starts giving you an idea of what drives performance on each of those models. And then we can use that as the foundation for strategy if any of those are our clients.

00:05:06:06 - 00:05:28:21
Claus Lauter
I think that's a huge mind shift going I might have going on right now because obviously the last, I don't know, 25 years search engine optimization was one thing. And I think these things are changing quickly right now, specifically when it comes how people look for brands, look for products. And at the end of the day, probably they will buy when we can see the first things happening right now through AI.

00:05:28:23 - 00:05:33:24
Claus Lauter
How do you help brands in really getting visibility in these tools?

00:05:34:01 - 00:05:53:14
Dr. Jonathan Snow
Yeah, so it's actually pretty simple. And fortunately we have all of the pillars of AI search optimization internally. So it's really a function of PR, So getting third party validation and different publishers, if you're a beauty brand, you want to be in vogue, you want to be in byrdie, you want to be in all of those type of third party sources.

00:05:53:16 - 00:06:27:15
Dr. Jonathan Snow
And that is like the bulk of AI search optimization today at least. And the other pillar is traditional SEO. So technical SEO on your website, make sure that it's easily read easily digested, everything is is clean on the website. And then there's obviously content like blog content on the website as well. So those are the main drivers. And then something that also impacts the algorithm for each model is how much volume went to those onsite content pages, how much volume went to those third party publisher pages.

00:06:27:21 - 00:06:45:00
Dr. Jonathan Snow
You can't just spin up a domain that has zero authority and zero traffic and expect to like start ranking it in the model. So it's it's it's a paid media, basically, it's PR and it's SEO.

00:06:45:02 - 00:07:01:02
Claus Lauter
What's what's your take on how can you not only for visibility to be getting fined on the web or in chat JPT, Gemini, whatever you're using, but also helping with conversions. Is there something conversion optimization related? It was in these tools.

00:07:01:04 - 00:07:28:09
Dr. Jonathan Snow
So right now there's no way to really optimize for conversions from the LMS. What we do notice is that traffic that does come from one of those referral sources attribute perplexity. They do convert at a much higher rate than someone that just came in through traditional search, especially if it was non branded. And so we're getting higher intent traffic to the website because it's coming from a recommendation made by the machines, which is interesting.

00:07:28:09 - 00:07:51:13
Dr. Jonathan Snow
So it's like a new word of mouth channel and something to also consider. I have so many brands that come to us saying like, Oh yeah, you know, I looked at my UTMB report and Chad sent us X amount of traffic and X amount of revenue, but they don't realize is that Chad CBT barely links directly to a brand's website, at least at the very moment today.

00:07:51:15 - 00:08:16:14
Dr. Jonathan Snow
The only links that it really cites are those third party validation sources, or if it used PR like a top ten listicle or if it used any type of PR or a third party trusted source, even read it. Wikipedia, any social platform, it'll cite those and link those things. But if it does recommend, let's just say Clinique as as a recommended brand, it will not link you to the product page for the product to go then and purchase.

00:08:16:14 - 00:08:33:15
Dr. Jonathan Snow
And so a lot of the referral traffic has no click, there's no UTM. So a lot of this is masked. What I'll do is I'll show you five brands that it recommends based on your prompt, and then you're going to go in, you're going to copy that one and you're going to paste it into Google search and it'll come in as branded search.

00:08:33:17 - 00:08:52:15
Dr. Jonathan Snow
And then your branded search is going to be mixed with obviously regular word of mouth channels. You know, traffic that was generated awareness was generated on paid media. But then also you're going to have a lot of your air search traffic come in through branded or direct or wherever it may be. And it's kind of like a silent referral source, right now.

00:08:52:16 - 00:09:18:01
Dr. Jonathan Snow
So it's something to think about. I recommend every brand on your post-purchase survey. That first question, How did you hear about us? You're going to have the classic like Facebook, Instagram, TikTok. You need to have perplexity or other eye chat. Solution is one of those answers, and you're gonna start seeing a lot of those response rates are actually going to be way higher than what is being tracked on your UTM reports.

00:09:18:03 - 00:09:29:08
Claus Lauter
I think a lot of marketers are now in trouble because obviously then it becomes very difficult to to track whether the sales is coming from. But I think that's like a fluent process and it will get better over time.

00:09:29:09 - 00:09:48:22
Dr. Jonathan Snow
One thing that you can track and that's what we're doing is what I said before is how many times is your brand being mentioned by Chad, CBT and the other ones? And then that's always going to be correlated to revenue at the end of the day, if you're getting, you know, referenced 5000 times a month versus 50 times a month, obviously it's all about percentages.

00:09:48:24 - 00:09:52:15
Dr. Jonathan Snow
The percentage of that traffic will eventually convert. So that's the thing you can control.

00:09:52:19 - 00:10:00:10
Claus Lauter
Okay. Our next reflections, let's talk about retention. How can you facilitate or use AI to build up more retention with your brand?

00:10:00:12 - 00:10:21:06
Dr. Jonathan Snow
Yeah, that's a that's a great question. I really think it's all comes down to personalization at the end of the day. So how are you going to be converting people through email, SMS And if it's just through a standard flow where it's like, Oh, you abandon your cart or oh, your order might be, you know, your product might be running out, it's time to purchase your next one.

00:10:21:08 - 00:10:48:10
Dr. Jonathan Snow
People are just customer accustomed to ignore those things. Now imagine if you had an agent or an AI driven salesperson that texted a person and personalized it to them. It didn't look like a spammy, you know, order replenishment flow. It looked like actually someone that's messaging you to see how it's going so far. And if they liked it, then remind them, Hey, if you're running out here, then purchase it better experience better conversion rates.

00:10:48:10 - 00:11:02:10
Dr. Jonathan Snow
We're testing some some AI driven tools right now for both SMS through iMessage and also through WhatsApp to really replace a lot of these automated flows to make it a more personable experience and convert better traffic.

00:11:02:16 - 00:11:27:08
Claus Lauter
Mm hmm. Now, your title as Chief innovation officer, which I find is absolutely brilliant because you're in the forefront of AI. And I think innovation being creative and as I just say, testing tools and trying to find out what they can do for brands. It's a great task to do. Now, if a brand approaches you at Avenue Z, what's your approach to find out what kind of services and tools you use to help them best?

00:11:27:10 - 00:11:53:04
Dr. Jonathan Snow
Yeah, it all starts with the audit, so we never come in with strategy or recommendations unless we have a full understanding of the business, the history of the business, what's happened in the past year, how is it trending, What is the forecast for the upcoming year? And we identify issues. If there's stagnancy and growth over the past year, we understand why is it new customer revenue growth is slowing is because returning customers of the have declined and now we're relying solely on new customers.

00:11:53:10 - 00:12:16:01
Dr. Jonathan Snow
So we understand every element of the business and then we get to the bottom of it and provide solutions and our roadmap. So if they need technology, which a lot of times they do to fix whatever issues are present or use technology to hit whatever goals they might have, then that's it. That's that's when we introduce those things and we typically use the first months of every engagement to start that roadmap.

00:12:16:03 - 00:12:26:14
Dr. Jonathan Snow
We identify the audit before they're an active client, but then that first month is really further strategy and then execution of some of those things that we identified are critical.

00:12:26:16 - 00:12:36:07
Claus Lauter
For the breadth that are approaching you right now. How much is the acceptance rate of tools they already use in the sector? Are they're coming like a blank sheet and using nothing or is it a mixed bag?

00:12:36:09 - 00:12:55:11
Dr. Jonathan Snow
Yeah, it's a pretty mixed bag. I'd say it's gotten better over time. I mean, brands used to come to us with like virtually no tech stack whatsoever and we would bring in all the different apps they would need in the Shopify ecosystem to improve average order value or conversion rate, whatever it may be. Brands seem like they're more ready now.

00:12:55:11 - 00:13:11:03
Dr. Jonathan Snow
They don't seem to be adopting AI tools yet, and that's where we come in. And honestly, we have agency subscriptions for a lot of the tools that we just use across all of our clients. So we don't really need them to adopt it. We're the ones that are bringing it and and kind of using it as part of the service delivery.

00:13:11:05 - 00:13:17:14
Dr. Jonathan Snow
So it hasn't really been a struggle to to translate what works for us onto our client work.

00:13:17:16 - 00:13:30:16
Claus Lauter
Mm hmm. For our listeners on a practical side, can you give an example or a case study? And you don't necessarily need to tell us who the brand is on how they implemented your services, your tools, and what kind of results they saw?

00:13:30:18 - 00:13:56:14
Dr. Jonathan Snow
Yeah, I think the best one is Brand came to us three months ago and already had some pretty good traction and they had a lot of traction actually in a tech talk shop space. And we were charged with growing their Shopify instance. And so what we did was we came up with a process where we took all the tick tock shop traction.

00:13:56:16 - 00:14:16:14
Dr. Jonathan Snow
We were able to leverage all those affiliates, hundreds, actually thousands of affiliates that had already posted on Tick Tock Shop and have gotten paid commissions and turned them into meta whitelisted influencers for the brand. So think about it. We we inherited this brand and this wasn't being done yet. We came up with that process to outreach all of those affiliates.

00:14:16:17 - 00:14:42:12
Dr. Jonathan Snow
And then literally within a week we had access to over 3000 Instagram and Facebook pages to run native ads with that content they already produced. And coming from each of those influencer pages and we have the tool that we brought to the table to bulk publish all of those ads on that. And now we're using a lot of that content on YouTube shorts ads, we're using a lot of that content on Applovin and we're using it on Snapchat soon to be Reddit.

00:14:42:14 - 00:15:07:02
Dr. Jonathan Snow
And so it came to us and now we've already for X daily revenue because of this process, not only to be for X daily revenue and we scaled ad budgets at least three times a daily amount that they were prior performance has gotten more efficient at 3 to 4 X level of scale. So blended return on ad spend and these are at the store level has gotten far better just because of that simple approach.

00:15:07:04 - 00:15:10:09
Dr. Jonathan Snow
And we're launching a thousand ads a month at least right now.

00:15:10:11 - 00:15:23:24
Claus Lauter
That just shows you that's nothing that you couldn't do on a manual level. That's where I comes in. Hopefully the brand can cope with the scale that they now have to deal with. I mean, it's like four X, that is a lot of sales, but.

00:15:24:01 - 00:15:25:03
Dr. Jonathan Snow
We're very happy.

00:15:25:05 - 00:15:32:09
Claus Lauter
I can imagine, and I hope a lot of listeners are now right now very concentrated on listening. What you say next. Now who's who's your perfect customer? Who's coming to.

00:15:32:09 - 00:15:52:24
Dr. Jonathan Snow
You? The best customer is someone that has a budget to afford many of our services. I would say they have to be doing figures in revenue to truly get the most out of our team. So anytime a brand comes to us, the more budget they have, the more resources we can deploy. We have dedicated resources for search for social, for an influencer, for creative, you name it.

00:15:52:24 - 00:16:16:16
Dr. Jonathan Snow
There's dedicated resource to the bigger team. We could assemble and control every part of the funnel, the better off the brand will be, the more that we can predictably succeed on the client. And I'll say those that have access to a ton of creative, whether it's they're creating a ton of their own creative themselves on the branded side, or they have a ton of influencer content, the more creative we have to work with, we do all the creative strategy and the editing.

00:16:16:16 - 00:16:24:01
Dr. Jonathan Snow
The more raw assets we get from the client, the better off we'll be, because now we can really hit the the volume needs of the platforms.

00:16:24:03 - 00:16:30:19
Claus Lauter
Mm hmm. Tell me about onboarding process. Yeah, I'll touch a little bit on it. How long does it take to get onboarded and to get up and running?

00:16:30:21 - 00:16:55:24
Dr. Jonathan Snow
Yeah, I mean, any brand that comes to us, they obviously have existing ad spend already. So day one after our kickoff call, we're already taking over existing spend and it would take like 2 to 4 weeks for us to get new creatives introduced into the account, have the full account restructurings done, any text that we recommended that was needed, especially conversion API like server side ad tracking tools that takes typically 2 to 3 weeks to have those fully ingested and deployed.

00:16:56:01 - 00:17:02:02
Dr. Jonathan Snow
I'd say by the end of week four we're fully onboarded and our full strategy is deployed across all the channels.

00:17:02:04 - 00:17:08:00
Claus Lauter
Want to go once a back to air? What's the biggest risk of brands who are not adapting to API?

00:17:08:06 - 00:17:37:09
Dr. Jonathan Snow
Yeah, there's two ways. I mean, if you're still media buying and days of the past with tens of creatives per month, performance is just going to decline. You know, people that brands as your competitors that are launching multiples higher of creative per month, they're able to serve more personalized ads because that's all it is in the auction, which is milliseconds that I can recall thousands of ads at scale now and identify which of those thousand creatives are most likely to convert to the person they're going to serve your ad to.

00:17:37:11 - 00:18:01:05
Dr. Jonathan Snow
So if you only have 20 creatives to choose from, it's just it's not going to be as personalized to the algorithm as as it will be if your competitors is beating you out there. And then there's the AI search part, right? So if your brand has already grown to the level it has now, but it's not going to be found in AI search, which is where Gen-z and all the the energy and momentum is going right now.

00:18:01:07 - 00:18:19:18
Dr. Jonathan Snow
Your brand is going to be left in the organic search engine results page, and it's not going to be found where your consumers actually are. So you have to think about that. And it's actually a big arbitrage opportunity if you are a challenger brand. Now you can get across and start beating out these household name brands and search.

00:18:19:20 - 00:18:40:23
Dr. Jonathan Snow
People are going to keep using empty forever, looking for certain products and doing product research, or they talk to, you know, the chat about a certain problem they have. There's always a solution to that problem that is typically a consumer product. And so if you're not in that conversation, your competitors are or vice versa. Top names in your space are and you are.

00:18:40:23 - 00:18:58:05
Dr. Jonathan Snow
And it's an area that you can really shine that on win another top of funnel channel. So I think that's that's that's the main point that I have today is that organic search is never been used for top of funnel strategy. But perplexity, those are top of funnel channels right now. It's word of mouth. That's the best way to categorize it.

00:18:58:07 - 00:19:01:24
Dr. Jonathan Snow
And you want to be in the mouths of every elm.

00:19:02:01 - 00:19:29:12
Claus Lauter
It sort of confirms what I had, my gut feeling voice and I'm basically upselling myself on how I use these tools or my my search behavior, how it has changed. And again, I think for brands out there, it's very important to stay on top of that paid traffic, definitely 100%. That will not go away. That's the fastest way to find new customers and then optimizing obviously for the other models highly recommended before our coffee break comes to an end today.

00:19:29:12 - 00:19:32:10
Claus Lauter
Is there anything you want to share with our listeners that we haven't covered yet?

00:19:32:12 - 00:19:56:20
Dr. Jonathan Snow
I would say if you're interested in AI search optimization, which you need to be or else you shouldn't be in marketing or on the brand side at all moving forward, you should follow avenues. We have those I search Visibility index reports that come out at least once a month. We have our Health and Wellness Supplement Index report coming out in the next couple of weeks, so be sure you can actually go on our website, abcnews.com.

00:19:56:20 - 00:20:15:20
Dr. Jonathan Snow
Go to AI research and you can actually sign up for the waitlist so you get notified by email every time a new report drops so you could understand what's working for that category of that product vertical and why. And just stay up to date on all those trends and they change on a day to day basis. So that's the number one thing.

00:20:15:20 - 00:20:27:09
Dr. Jonathan Snow
Number two, I also have a newsletter myself, so I'm also active on social, so feel free to find me on Twitter, on LinkedIn or my blog newsletter, which is at Jonathan. Com.

00:20:27:11 - 00:20:42:18
Claus Lauter
Who I would put all the links in the show notes. You would be just one click away. I will definitely sign up because I'm curious what's happening in AI and I want to be on the forefront on the technology there. For our listeners going to show notes, sign up, you will definitely get some value out of it. John, thanks so much for your time today.

00:20:42:19 - 00:20:47:03
Claus Lauter
I hope a lot of people reach out to you and let's see what it brings for the future.

00:20:47:05 - 00:20:47:23
Dr. Jonathan Snow
Appreciate it.