TLDR: A recent Inc. Magazine report highlights that 83% of U.S. small businesses are leveraging Artificial Intelligence in their advertising efforts, often unknowingly. Selin Song, Google’s president of customer solutions, details key strategies proving effective, including optimized ad targeting, easily updated ad content through generative AI, and expansive audience insights. The integration of AI is helping small businesses compete and achieve significant revenue increases, as exemplified by companies like Little Sleepies.
A new report from Inc. Magazine, published on October 23, 2025, reveals that a vast majority of small businesses in the U.S., specifically 83%, are now incorporating Artificial Intelligence into their advertising strategies. This widespread adoption often occurs even without business owners explicitly realizing they are utilizing AI, according to Selin Song, Google’s president of customer solutions.
Song, who has over two decades of experience with Google Ads, offers a unique perspective on the AI applications that are yielding positive results for small and medium-sized businesses (SMBs). She emphasizes that AI is not just for tech-savvy startups but is also benefiting local ‘mom-and-pop shops’ through new and improved tools like generative AI for marketing campaigns and AI-supported campaign targeting.
Several key strategies are proving particularly effective for small businesses:
1. Optimized Ad Targeting: As digital advertising costs continue to rise, AI has become crucial for businesses to efficiently reach customers most likely to convert. Major platforms have introduced AI-enabled functionalities to support this, including Google’s Performance Max (launched in 2021), Meta’s Advantage+ suite (2022), and LinkedIn Accelerate Campaigns (2023). These tools help businesses pinpoint their ideal audience with greater precision.
2. Easily Updated Ads: Generative AI is being used to augment and enhance existing marketing assets rather than replace human creativity entirely. Businesses are leveraging these tools to perform tasks such as placing products on diverse backgrounds or adding new features to existing images and videos, streamlining the ad creation and modification process.
3. Expansive Audience Insights: AI provides small businesses with a deeper and more nuanced understanding of customer behavior and preferences, enabling more informed decision-making for their advertising campaigns.
Song highlights that while AI provides powerful amplification, the core elements of originality and authenticity remain paramount for small businesses to succeed. She advises entrepreneurs to use generative AI tools in a ‘co-collaborative’ manner, stating that AI ‘helps amplify and scale that vision’ which originates from the ingenuity of business owners and their teams.
Also Read:
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- Marketing Technology Sector Poised for Trillion-Dollar Growth by 2026, Fueled by AI and Data Integration
An illustrative example is Little Sleepies, an Inc. 5000 honoree, which utilized AI to add voiceovers to its video advertisements. Despite having a small marketing team, this AI integration led to a significant 20% increase in revenue for the company, demonstrating the tangible benefits of smart AI adoption.
