Most Small Businesses Are Using AI for Ads. What’s Working, According to a Google Exec

There’s no denying the potential of artificial intelligence to drive growth for small businesses. Still, as much as the rapidly advancing technology touts benefits like powering automation and increasing operational efficiency, the first step in getting AI to work for your business is to figure out how, exactly, you should use it.

Luckily, there are already plenty of tested strategies that have helped fellow SMBs bolster their businesses, according to Selin Song, Google’s president of customer solutions. Through its ads platform, the search giant sees 83 percent of U.S.-based small businesses using AI, she says, “whether they know it or not.” New and improving tools, like generative AI for marketing campaigns and AI-supported campaign targeting, are gaining traction not just among scrappy startups, but also local mom-and-pop shops.

Song, who has spent nearly 22 years at Google, working on Google Ads (which itself is 25 years old), has an advantageous viewpoint to assess the AI use cases that are working for small businesses today, as well as the advertising strategies that are helping them compete against better-funded and larger competitors. Here, she shares her insights.

1. Optimized ad targeting

As digital advertising costs have increased over recent years, businesses have turned to AI to help reach customers who are most likely to convert. Platforms have launched their own AI-enabled functionalities to support this shift: In 2021, Google launched Performance Max, its AI-powered ad campaign tool, and in 2022, Meta released its Advantage+ suite, which includes campaign optimization tools. Last year, LinkedIn released LinkedIn Accelerate Campaigns, its own AI-boosted advertising offering.

With Google’s Performance Max, Song says, small businesses typically see 70 percent more conversions at half the cost of traditional campaigns. She attributes this to AI cutting down on the amount of analysis a business would have to manually conduct to achieve similar results. “Historically, you might needed a huge team to try to do the analytics and market assessments that you can do now within a few minutes,” she adds. “It really levels the playing field for small businesses.”

2. Easily updated ad creative

The concept of using generative AI for marketing can be a contentious one, but the reality is that most businesses turning to AI tools aren’t using them to fully replace human creativity. Instead, they’re using them to augment and enhance the assets they already have.

Song notes that businesses are using generative AI to place products on different backgrounds or add new features to existing images or videos. Little Sleepies, a two-time Inc. 5000 honoree, has used Gen AI to add voiceover to its video ads. “They have a really small marketing team,” she says. “They were able to see a 20 percent increase in revenue from some of those changes.”

Even with this AI augmentation, Song adds, originality and authenticity are what help small businesses come out on top. “It’s really coming from the ingenuity of the business owners of their teams” she says. “[AI] helps amplify and scale that vision.” As such, she recommends entrepreneurs use generative AI tools in a “co-collaborative” way.

3. Expansive audience insights

While AI-powered tools intend to add efficiencies to businesses’ marketing campaigns, they cannot work unless business owners have a clear view of their goals and objectives. Song stresses the importance of taking a “test and learn” approach, especially as “the path to purchase is increasingly unclear.” That is, businesses should see that they measure the success of their campaigns against their original objective, and tweak them accordingly.

This is especially true as businesses try to target new customers, as they may find unexpected demographics to approach. “I had a performance arts customers at one point who thought, ‘Most of our viewers are women and children.’ It turned out that we were able to identify pockets of male customers looking to buy gifts for presence or kids,” Song says. “It opened up incremental opportunities for business.”