How are Small Businesses using AI in their Digital Marketing?

Rita Pereira
October 18, 2023
6 min
 min read

Artificial Intelligence is having its moment.

ChatGPT is all we hear about (have you tried it?), and even if we aren’t quite aware of it, never before have we had AI involved in so many aspects of our lives.

Netflix, Google Maps, your digital voice assistant — Hi Alexa! — or that medical clinic chatbot that helped you clarify some issues are only a few of the AI-powered tools in widespread use — and we just can’t imagine living without them. Neither we nor many businesses around the world.

Companies increasingly rely on Artificial Intelligence to develop several aspects of their business. Besides what you might’ve thought, not only are small and medium enterprises interested in AI tools, but in some cases, they’re already taking advantage of what AI has to offer. But how did it all start? And in what ways are small businesses using AI tools in their marketing efforts?

How It All Began

AI can be described as a branch of computer science that simulates human intelligence through computer systems — meaning it allows machines to perform tasks as if they were individuals.

Despite taking off in the 50s, businesses only started using Artificial Intelligence at the beginning of the 21st century. The reasons why it took longer to catch on were connected to issues such as the lack of availability of high-performance computing hardware and big data development, advances in AI research overall, and investment in the field.

As we entered a new century, it didn’t take long for businesses to start taking advantage of this technology. The first ones were, with no surprise, the behemoths — after all, small businesses couldn’t even consider using this technology to improve their operations due to the lack of monetary funds. But this scenario would dramatically change after Digital Marketing’s arrival and development in the new century.

Digital Marketing’s Arrival

The term ‘Digital Marketing’ was coined in 1988 when the Internet began taking shape. The first forms of digital advertising were born with the first generation of the World Wide Web, Web 1.0.

The first clickable banner, by Hotwired, appeared in 1994, and some years later, Planet Oasis, Open Text and the Go.To emerge as the first pay per clicks advertising models. At the turn of the century, the most significant break in the Digital Marketing field also appears: Google Adwords. Now called Google Ads, this is one of the world’s most popular online advertising platforms. It was groundbreaking when it showed up, using the first pay-per-click advertising models, pushing them further, and allowing small and large businesses to increase their customer base only by bidding on a specific keyword.

Over the years, platforms like Facebook Ads — now called Meta Ads -, LinkedIn Ads, or Twitter Ads continued revolutionising the field, allowing any individual to get a piece of the online advertising cake — not only on Google’s ecosystem but also on social media networks.

The first clickable banner in history. Source: The Guardian

But what does this have to do with AI?

The platforms that started using the first pay-per-click advertising models were the ones that opened the doors for customer acquisition by SMEs. Two of these companies — Google and Meta, respectively — became giants that have recognised the importance of AI for decades, using it as a fundamental part of their growth.

Google has been investing in it for over 20 years and using it in some of its most famous products — the RankBrain search engine, Google Ads, Gmail, and Google Photos, among others. Facebook and Instagram’s group, Meta, started the journey in 2013 with the creation of supercomputer AI Research SuperCluster (RSC) but continues to do so with great effort, as we can see with the development of a team dedicated to AI products.

Thanks to the advertising platforms and the emergence of Web 2.0, users started creating content and interacting with each other. That affected small businesses immensely. Information began being widely disseminated, so they started understanding how digital marketing worked. That meant taking advantage of the possibility the Internet had to offer, especially regarding customer acquisition.

The Use of Artificial Intelligence in Small Businesses

The interest in having AI in businesses appears due to its amazing results. This technology enhances small businesses’ productivity and performance by positively impacting aspects like ROI, reporting, evaluating business results and helping decrease the chance of human error. It also takes less time, so there are short and medium-term money savings in marketing efforts. This is a reality for small and large businesses, but for the former, it has always been a challenge to use.

The Challenges

As was addressed before, a limited budget is always a concern for SMEs’ investment in digital marketing. Whereas small businesses tend to have an owner who takes care of their marketing activities, small and medium companies hire marketing professionals with generalist knowledge precisely because of this limitation. These small teams typically lack marketing field knowledge. In addition, the task becomes almost impossible when considering implementing Artificial Intelligence since it is regarded as one of the most challenging technologies to take on.

Another challenge regarding using this technology is lack of trust: it is a common perception that people generally don’t trust Artificial Intelligence. The fictional narratives of works like Frankenstein or 2001: a Space Odyssey has contributed to the general scepticism and mistrust with which people generally see the technologies that resort to this computer science subject. Yet, this perception isn’t entirely accurate for small business owners.

AI Adoption by small businesses is going slowly but confidently

Unbounce’s 2022 survey in North America revealed that small businesses trust Artificial Intelligence and “show a keen interest in adopting AI marketing technology in 2022”. Plus: they have excellent conditions to succeed with AI adoption — especially compared to large enterprises. Small businesses benefit from having factors like flexible environments, innovation, entrepreneurship, learning orientation and centralisation of power. In contrast, behemoths suffer from constraints like formal work environments, rigidness and slowness in adapting to changes.

Despite the lack of financial resources being the main setback, small businesses are already implementing AI — 31% according to Unbounce’s survey, and 1 in 5 business owners told Unsupervised they are beginning the process. According to that source, natural language processing is the most used AI technology. It is used for tasks like content creation, chatbots and managing inventory. The industries implementing AI are High tech/telecom companies, Automotive and assembly and Financial Services. The tasks are countless: customer service (with chatbots, for example), collecting data, managing day-to-day communications, scheduling appointments, analysing small business worker engagement and even finding and renting real estate.

As with large companies, small businesses adopting AI-powered tools tend to spend less money than non-adopters on digital marketing. And now, more than ever, it is incredibly easy (and cheaper!) to use AI.

Small Businesses are living in a privileged era due to the proliferation of information on Web 2.0. Digital marketers on Twitter and LinkedIn and several newspaper posts have created lists of easy-to-use and free apps that these businesses can adopt to improve their productivity.

ChatGPT is an excellent example of one of these tools. Its release was a massive success — it was the fastest app to reach 100 million active users, doing so only two months after its release. In addition, a lot of free content was created online, providing tips and highlighting ChatGPT’s best practices to businesses.

After this colossal chatbot success, many more are expected to come. Financial resources will always be a struggle for small businesses, but the Artificial Intelligence field will continue to grow and provide more accessible tools that small businesses can take on. AI adoption may be growing slowly, but it is undoubtedly growing confidently.

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