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Navigating Uncertainty: The Power of Digital Tools for Small Businesses

Our recent report, Digital Ads and AI Help Small Businesses Navigate Uncertainty, shows that small businesses are using digital tools and artificial intelligence (AI) to navigate economic uncertainty, drive growth, and compete with larger companies. The report, based on a survey of 4,000 U.S. small- and medium-sized business (SMB) leaders, comes as lawmakers consider regulations that could change how SMBs leverage tools like digital advertising and AI technology, causing serious harm to businesses nationwide.

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Background

In today’s unsettled economy, SMBs’ access to affordable and effective digital tools is more important than ever. Tools like personalized digital advertising and AI technology help SMBs drive growth and compete with larger companies. Ensuring that these innovations remain available and effective will be critical to SMBs’ continued success, and overregulation of such tools could have serious impacts.

Lead Findings:

Digital Tools Are a Safety Net for SMB Leaders in an Uncertain Economy

84% consider digital tools important for running their business, with 42% saying they are critical.
68% believe digital tools will be crucial for navigating inflation and economic uncertainty in 2025.
73% say digital tools will play a critical role in their company over the next two years.

Digital Ads, Especially Data-Driven Ads, Help SMB Leaders Reach New Customers and Compete With Larger Rivals

64% use digital advertising, and 80% of them say these ads help their business reach new customers.
Most (92%) SMB leaders who buy digital ads sometimes use personalized ads (ads powered by non-sensitive data).
70% say personalized ads and analytics help their business reach new customers more efficiently.
71% of SMB leaders who buy digital ads believe restricting digital ad platforms’ data collection and processing would make their ads less effective.
66% consider data security and customer privacy a big concern for their business.

AI Adoption Growing as SMB Leaders See Business Efficiencies and Growth

The majority (51%) already use AI in their business.
82% say their business either uses AI already or is “AI curious” — meaning they plan to use AI or want to learn more.
64% agree AI tools help level the playing field for businesses of all sizes.
52% say AI tools are critical to the success of their business right now.
74% say privacy, trust, and safety are top priorities when it comes to AI.

Findings by State

Maryland

Methodology

RXN with its think tank, the Data Catalyst Institute, conducted an online survey of 4,000 leaders of U.S.-based small- and mid-sized businesses (SMBs; <500 FT employees) that sell products or services to businesses and/or consumers. The survey was conducted between November 6-25, 2024. The main sample (N = 4,000) has a margin of error of +/-1.5%. The main survey was weighted to known census and SBA demographic variables as well as to data from previous U.S. SMB research we conducted. Every person we surveyed is an SMB leader involved in making decisions affecting their entire business. The full results of our survey can be found here.