AI recommendations for local businesses track reviews and websites, not technical SEO

By AI, Created 10:58 AM UTC, May 20, 2026, /AGP/ – Insites’ study of 10,000 local businesses finds that AI systems such as ChatGPT and Perplexity lean most on review volume, Google Business Profile completeness and website content when deciding whom to recommend. The report says technical SEO signals like page speed and structured data show little correlation with AI visibility.

Why it matters: - Local businesses and agencies are shifting budgets toward the signals AI appears to trust most. - The findings suggest traditional SEO playbooks may not be enough to influence AI-driven recommendations. - Businesses that improve the right visibility signals could gain an edge in customer discovery across AI platforms.

What happened: - Insites published the 2026 AI Visibility Report: How AI Chooses Local Businesses, a correlation study of 10,000 businesses across ChatGPT and Perplexity. - The report examined more than 200 digital marketing signals against AI recommendation outcomes. - The study was authored by Andrew Waite, CEO of Insites. - Insites said the report is available to download for free at the full report.

The details: - The study found that 93% of local businesses are known by AI, but only 55% have accurate details. - AI actively hallucinated information about the remaining businesses. - A business’s own website appeared in 72% of awareness queries, making it the single most important source AI draws on. - Google review volume, Google Business Profile completeness and Local Pack presence showed the strongest correlation with AI visibility. - Businesses found by both ChatGPT and Perplexity averaged 133 Google reviews, compared with 11 reviews for businesses invisible to AI. - Businesses appearing in the Local Pack were recommended 3.5 times more often than those that were not. - Businesses visible to AI had more than double the number of website pages on average. - Sites that had not been updated recently were significantly less likely to appear in AI recommendations. - Technical SEO factors showed weak or no meaningful correlation with AI recommendations, including Core Web Vitals, page speed, structured data, LLMs.txt and FAQ schema.

Between the lines: - The report challenges a long-standing assumption that technical optimization is the main path to search visibility. - The results point to content depth, freshness and public reputation signals as more influential inputs for AI systems. - For agencies, the study suggests AI visibility may become a new sales angle tied to measurable business outcomes. - Andrew Waite said AI visibility is “the biggest new sales and growth narrative for agencies in over a decade.”

What’s next: - Agencies are likely to test AI visibility audits as a new service offering for local clients. - Businesses may need to invest more in reviews, profile completeness and website content to improve AI recommendation odds. - Insites says its platform lets digital marketing providers run AI Visibility Audits across ChatGPT, Perplexity and Gemini. - The company says the audits identify gaps and opportunities for sales conversations with local business owners.

The bottom line: - AI recommendations for local businesses appear to reward visible, well-reviewed, content-rich brands more than technically optimized ones.