How Small Businesses Can Leverage AI Advertising

The future is now: no longer just a predictable movie trope, artificial intelligence (AI) is at the core of modern industry and technology, expanding faster and farther than ever before.

Of course, AI and machine learning are the norms for mega-giants like Amazon, Google, and Meta. However, even small businesses can leverage AI advertising tools to gain a competitive advantage and create high-performance marketing campaigns that deliver results.

As a small business owner, you know the importance of adapting and optimizing your marketing strategies and ad campaigns to remain relevant, boost brand awareness, and engage customers.

Most small businesses don’t have an endless pool of money to invest in advertising or a team of marketing specialists. Well, artificial intelligence may be the solution.

Let’s explore how to leverage AI tools and why integrating this cutting-edge technology can be an effective and surprisingly affordable strategy for small businesses.

Artificial Intelligence Is on the Rise

Of all the emerging technologies in the world, artificial intelligence is undeniably one of the most fascinating and rapidly growing.

In 2022, the AI market size in the U.S. was $387.45 billion, with experts forecasting an increase to $1,394.30 billion by the year 2029, a compound annual growth rate (CAGR) of 20.1%.

Although the capabilities of AI technologies are rapidly improving and provide immense benefits for many organizations, they can only do so much. Some tasks are only suitable for a human brain.

On the other hand, there’s no doubt that AI can often deliver better performance and cost a company far less than hiring human workers when it comes to certain jobs.

According to the Harvard Business Review, combining AI and marketing could help businesses grow sales by up to 50%. Let’s dive into that shocking stat a bit more.

YearAI Market Size in the U.S. (in billions of dollars)Forecasted AI Market Size in the U.S. (in billions of dollars)Compound Annual Growth Rate (CAGR)

What Is AI Marketing?

Artificial intelligence is a technology that allows machines to learn, primarily by detecting data patterns and then using that information to make predictions.

Then, it learns from those outcomes and uses them to increase the accuracy of its predictions over time. Giving the system as much data as possible is the best way to help it learn quickly and improve its abilities.

With that in mind, AI marketing uses the same machine learning technology to make data-driven decisions based on analysis and observations of customer behavior and market trends.

For example, a company may use AI tools to collect customer data, gain critical insights, anticipate responses, and use that information to automate decisions and provide valuable feedback on advertising strategies.

Also, many businesses use AI systems to create targeted marketing campaigns for specific customer demographics.

AI digital marketing has three fundamental components: machine learning, big data, and artificial intelligence tools.

Machine Learning

The first type of artificial intelligence uses machine learning algorithms and deep learning models to evaluate large datasets and identify patterns.

This type of cognitive computing and in-depth analysis could provide insights into which advertising strategies are the most successful.

Businesses can use the information gained from deep learning to customize and refine marketing initiatives to maximize results, improve customer experience, and generate more leads.

Big Data

The sheer amount of data collection happening across multiple platforms and channels results in an inevitable oversaturation. This makes it hard to narrow down which data sets are the most important.

Artificial intelligence uses data science and analytics to evaluate, compare, and filter vast troves of data at lightning-fast speeds, leaving business owners with only the most essential and relevant information.

Artificial Intelligence Tools and Marketing Platforms

Companies can use powerful AI tools, software, and marketing platforms to gain critical customer insights, make well-informed decisions, streamline business processes, and much more.

These software systems and tools can implement process automation for email marketing, social media posts, and other advertising strategies. Of course, that’s just one example.

The possibilities are endless, which is why it’s so important for a small or medium-sized business to capitalize on the many opportunities AI provides.

Why Small Businesses Should Integrate AI for Advertising

As the owner of a startup company or small business, it can feel overwhelming trying to succeed against large-scale companies. You face unique challenges that aren’t an issue for bigger companies, including:

  • Lack of operating capital or steady income
  • Trouble attracting leads and customers
  • Balancing company growth while maintaining quality services
  • Limited time for managing business needs and operations
  • Lack of expertise in digital marketing and advertising
  • Ineffective advertising efforts and poor brand awareness
  • Issues with human resources and hiring qualified employees

According to the Bureau of Labor, approximately 20% of small businesses fail in their first year, and almost half fail in the first five years.

So, how can you solve problems like the ones we just listed in a way that doesn’t require a considerable influx of cash or other various assets?

For many small business owners, local customers are their bread and butter. But, they’re not going to get those critical leads and customers if they can’t effectively market their business.

That’s where leveraging AI can make all the difference for a startup business or small company.

ChallengeHow AI Can Help
Lack of operating capital or steady incomeCost-effective advertising with targeted campaigns
Trouble attracting leads and customersAI-powered customer acquisition and lead generation
Balancing company growth while maintaining qualityAI can automate certain tasks, freeing up time for growth
Limited time for managing business needs and operationsAI can streamline operations and reduce manual effort
Lack of expertise in digital marketing and advertisingAI can optimize ad spend and provide data-driven insights
Ineffective advertising efforts and poor brand awarenessAI can improve ad targeting and messaging for better results
Issues with human resources and hiring qualified employeesAI can assist with HR tasks like candidate screening and scheduling

6 Ways to Use AI Marketing for Small Businesses

Integrating artificial intelligence technology with marketing and advertising strategies can be a major game-changer for small and medium-sized businesses.

Below, we’ll explore six ways your small company can leverage AI advertising tools:

1. AI Chatbots

Providing superior customer service is critical for every business, whether small or large.

However, many smaller businesses don’t have the funds to hire a team of employees with the express purpose of improving customer service. Some business functions related to customer service are strictly human jobs, but that’s not always the case.

The use of AI chatbots is one way to increase efficiency and reduce the time spent by human employees who would otherwise have to answer the same questions over and over. The most advanced AI chatbots use tools like natural language processing to analyze customer input and respond in a realistic-sounding way.

Plus, integrating an AI chatbot on digital platforms like social media pages and websites is easier and more affordable than you might think.

Using AI chatbots to answer frequently asked questions from customers is faster, more efficient, and cheaper than using humans, too. It frees up your employees’ time to deal with the more complex customer requests or questions that require human intelligence to solve.

2. Predictive Analytics Through AI

Collecting and analyzing business data can provide valuable information regarding customer behavior and how to optimize marketing strategies. Unfortunately, many small companies just don’t have the time or knowledge to analyze data properly and derive those critical insights.

Artificial intelligence tools that utilize predictive marketing analytics can do all the hard work for you. These AI tools use analytics by combining machine learning, datasets, algorithms, and models to predict future behavior regarding leads and customers.

This information can help your marketing or sales team understand which products your customers want and when, improving campaign effectiveness and performance.

If your business uses AI software to accurately forecast which customers provide the highest value, you can increase conversions by providing them with a highly personalized experience.

3. AI-Enabled Customer Relationship Management Systems

A customer relationship management system (CRM) is software that collects customer data from social media platforms, emails, and other channels to streamline and enhance the sales process and overall customer experience

. Taking that a step further, an AI-enabled CRM uses machine learning to analyze data from customers, predict future behavior, and generate high-quality leads.

With an AI-powered CRM, you can use the digital information and data you gather from personalized emails, advertising campaigns, etc., to optimize your business strategies for lead generation. This AI tool can also help your business increase the precision of its customer targeting and convert leads into customers using automation for email personalization and customer segmentation.

AI CRMs also provide stronger marketing and promotion, but there’s another benefit: improving overall customer experience by delivering personalized and highly relevant content.

4. AI-Powered Advertising Campaign Automation

Another way AI can benefit small companies and businesses is through ad campaign automation. It’s like your business outsourcing its day-to-day operations to other people (in this case, artificial intelligence) who have more experience, knowledge, and skills, which means they can provide better results and performance.

AI campaign automation can offer more data on customers and real-time engagement to improve ad performance, increase efficiency through marketing optimization and faster analytics, and provide accurate sales forecasting and other critical insights.

In addition, using AI and machine learning for marketing optimization can help your business select the right message that will resonate most with your customer base. AI can also help you create a data-driven strategy combining targeted messaging with the right channel and platform to deliver maximum ROI (return on investment) and campaign performance.

Programmatic marketing platforms use artificial intelligence and machine learning to identify the best ad choices for your business at optimal times. AI can successfully manage critical campaign tasks, including the following:

  • Bidding for open ad places
  • Reporting on performance metrics
  • Finding patterns in large data sets

AI can also help you choose the ideal advertising channel, reduce errors through automation, and improve your marketing services by streamlining operations.

5. AI-Optimized Email Marketing

Are email campaigns a core aspect of your marketing strategies?

Despite the number of available platforms and channels for advertising, email marketing remains one of the most successful and effective. Email is affordable, utilizes valuable first-party data, and is relatively easy to develop and deploy. However, only the most relevant and personalized emails will generate leads, improve customer relationships, and boost conversions.

Artificial intelligence and machine learning have revolutionized the business process of email marketing. Personalizing emails can provide a big boost in open and click-through rates.

So, how can AI systems improve the personalization of your emails?

AI can track subject line performance, predict future engagement, optimize content, refine messaging based on the previous behavior of prospects and customers.

AI can eliminate the guesswork and tedium involved with customer communications, follow-ups, and remarketing. It can also automate composing and sending emails, which is extremely beneficial to productivity and reduces the number of mundane tasks you or your employees would have to perform otherwise.

6. AI-Driven Ad Spend Optimization

Many small companies have limited capital for day-to-day operations, including marketing and advertising. Here’s another case in which AI software and systems can benefit your business in terms of marketing: intelligently adjusting ad spend based on each channel’s performance.

For example, let’s say you’re advertising services on Facebook Ads and Google Ads. However, you realize that the Facebook campaign is outperforming Google Ads.

Your AI tools detect this and automatically modify your marketing spend in response, increasing the budget for Facebook and cutting it for Google.

AI can also make those same automatic optimizations to your ad budgets across multiple channels—but through a single system. For smaller companies, these savings on their budget can make a huge difference. And it all starts with AI.

While you may think implementing AI will be too expensive for a smaller-sized business, that’s not the case. It might surprise you just how affordable this technology is, and the benefits you can enjoy make spending the money 100% worth it.

Use AI to Improve Business Processes and Optimize Marketing

Beyond using AI for marketing and sales, businesses have many other uses for artificial intelligence. For example, AI can help boost productivity through automation, prevent threats through fraud detection, streamline human resources tasks, and so much more.

Now that we’ve discussed how to leverage AI advertising for your small business, it’s time to consider what AI can do for your brand.

Using both AI and machine learning to drive marketing campaigns as a small or growing business can help you improve sales, boost conversions, and reach a wider audience of your customers.

It’s no longer an ideal of the future—artificial intelligence is here to stay, and your business can use this technology to gain an edge and succeed in a hypercompetitive marketplace.