Every competitor can buy the same AI tools you can, at the same price, this afternoon. That makes AI table stakes, which means the thing actually worth funding is the judgment directing it. In this episode of The Search Signal, Michael Transon puts a number on that: about 1 percent of revenue, or $800 a month at $1 million in revenue and $80,000 at $100 million, plus the four arguments to make when your CFO asks why AI can't just do all of this now. What you'll hear in this episode:

• Marketing budgets have fallen to 7.8 percent of company revenue from 9.5 percent four years ago, while the AI share of those shrinking budgets climbed past 15 percent
• The production layer AI genuinely handles well: data pulls, first drafts, keyword research, and reporting, the work a junior analyst or a freelancer used to do
• Why clearing the baseline earns you nothing, using last quarter's research: AI described 96 percent of brands accurately and nine out of 10 still never got mentioned in a buyer answer
• Two cost assumptions that don't hold up: a Harvard Business Review field study that spent eight months inside a 200-person tech company and found AI intensified work instead of reducing it, and the fact that AI is only this cheap because providers are absorbing billions in losses to build adoption
• What each tier funds: $800 to $1,000 a month at $1 million in revenue, $8,000 at $10 million, $15,000 to $17,000 at $20 million, and $80,000 at $100 million and up
• The four arguments for a CFO, including organic search as a compounding asset rather than a cost, and why ground competitors are abandoning is the cheapest ground you'll ever take
  

[00:01:12] Alphabet's earnings put Cloud ahead of search

[00:03:27] Google's information agents push answers before you search

[00:04:31] AI Mode connects to Instacart, Canva, and YouTube Music

[00:06:02] Top Stories moves inside AI Overviews

[00:07:40] A judge throws out Google's copyright case against SerpApi

[00:08:52] The question: should you run search in-house with AI?

[00:10:31] Budgets are down, the AI line item is up

[00:13:19] Why search should keep its funding

[00:15:35] What AI genuinely does well

[00:17:06] Everyone buys the same tools, so no tool is the advantage

[00:20:11] Spreadsheets, Google Analytics, and the chisel

[00:23:20] Assumption 1: AI lets you do the same work with fewer people

[00:25:35] Assumption 2: AI stays this cheap

[00:27:55] AI isn't a fourth option, it's a layer underneath

[00:29:49] The rule of thumb: 1 percent of revenue

[00:31:07] At $1 million in revenue

[00:32:24] At $10 million in revenue

[00:33:39] At $20 million in revenue

[00:36:43] At $100 million and up, run both

[00:38:26] The case to make to your CFO

[00:42:36] Three takeaways

Find all sources referenced in this episode here: http://victorious.com/podcast/marketing-budget/

• CMO Spend 2026 – Gartner: https://www.gartner.com/en/articles/cmo-spend
• AI Doesn't Reduce Work, It Intensifies It – Harvard Business Review: https://hbr.org/2026/02/ai-doesnt-reduce-work-it-intensifies-it
• The State of Business Buying, 2026 – Forrester: https://www.forrester.com/blogs/state-of-business-buying-2026/
• Q2 2026 Quarterly Search Report – Victorious: https://victorious.com/quarterly-search-report/
• Top Stories roll out in Google AI Overviews – Search Engine Land: https://searchengineland.com/top-stories-roll-out-in-google-ai-overviews-482615
• Google AI Mode adds Instacart, Canva and YouTube Music integrations – Google: https://blog.google/products-and-platforms/products/search/connected-apps/