New Research Shows AI’s Growing Role in Driving Online Advertising’s Value

WASHINGTON (Nov. 21, 2024) — As business owners look for ways to gear up for Small Business Saturday, a recent study led by the Connected Commerce Council (3C) and Advertiser Perceptions found that U.S. small and medium-sized businesses (SMBs) are rapidly adopting artificial intelligence (AI) to make their digital advertising more effective, and many SMBs see AI’s potential to maximize their advertising efforts and reduce marketing costs. The study comes as policymakers across the country consider a broad range of AI regulations, both on the federal and state levels.  

The study found that 69 percent of SMBs use digital ads to find new customers, and that an overwhelming majority of SMBs — 95 percent — think AI will help improve their ad campaigns.  

“Digital ads have helped grow my handcrafted leather products business, and I’ve seen how integrating AI into the ads makes them even more effective,” said Pavlo Prannyk, co-founder of olpr. Leather Goods Co. in Mooresville, North Carolina. “AI-driven ad campaigns ensure I reach the right customers, drive sales, and grow my business.” 

Prannyk uses the AI-powered advertising tool Google Performance Max to accurately place ads in front of the right audiences. Like Prannyk, 83 percent of SMBs already use AI in their digital advertising, according to the study.

“Small businesses are leveraging inexpensive, online tools to stand out against competitors and get ahead in today’s economy,” said Rob Retzlaff, 3C’s executive director. “Integrating AI with digital ads creates even more opportunities for small businesses to grow and succeed.”

The study also found that SMBs expect AI will save them money. Forty-three percent of SMBs think AI will reduce their overall marketing costs, and 45 percent of SMBs expect AI to save them money on ad creative.

“Small businesses already harness digital ads to reach new customers and sell their products,” said Lauren Fisher, general manager of business intelligence for Advertiser Perceptions. “AI tools can take these digital ads to the next level by making them more effective and less expensive.” 

Methodology:

In partnership with the Connected Commerce Council and Google, Advertiser Perceptions surveyed 1,200 small and medium-size businesses, 210 large advertisers and 200 publishers from March to April 2024 to understand the value of personalized advertising to their organization. SMBs included advertisers with fewer than 500 employees, while large advertisers included businesses with at least 500 employees. Publishers included companies with ad-supported digital sites or apps that get at least 3 million unique monthly visitors. All respondents were involved in decision-making about digital ads and used personalized advertising. National-level results are weighted to be geographically representative using 2021 US Census data as a baseline for business distribution in each state.