Small and medium-sized businesses (SMBs)
advertisers are finding new ways into emerging media such as connected television (CTV) and generative artificial intelligence (GAI) to increase their options and performance.
I have noticed a
slew of local television ads through my CTV service that began about one month ago. All are small local companies in the Wyoming area.
Amazon impacted the streaming ad market, opening the door
for SMBs to explore CTV and AI as the media become more affordable. Google and Microsoft once owned the SMB market, but that is changing as automation becomes prevalent in other types of
media.
“When Prime Video’s ad-supported tier launched in January 2024, Amazon priced its ads around $35 CPM — significantly lower than the competition at Max, Netflix,
and Disney+,” according to Emarketer’s December 2024 research note.
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The goal seemed simple. Rather than accumulate as much profit as possible in the short term, Amazon priced its
inventory to sell immediately.
It worked. Lower costs attracted SMBs. Not in the short term, but in the long term.
By adding about 50 billion ad impressions to the U.S. CTV market,
Amazon saturated the advertising supply and forced other streaming services to drop their prices in a bid to stay competitive, according to the report.
Aside from CTV, impressive has been the
overall growth of two segments of Amazon Web Services (AWS). During the last five years data from HG Insights, which monitors revenue growth, shows the number of SMBs that have purchased AWS products
grew by 165%, and startup customers have increased 257% since 2020. These two segments have been the fastest-growing.
SMBs and startups increased by nearly 28% year-over-year from 2023 to
2024. To support clients, this year AWS will focus on GAI, Machine Learning, and Data Security.
Some 92% of AWS customers spend less than $1,000 per month on its services. This is also the
fastest-growing segment, with a year-over-year (YoY) customer count increase of 88.7%.
AI has become the catch-all to attract SMBs. At analytics and email marketing platform Constant Contact,
small businesses are embracing AI to better compete. A study of 1,600 SMBs on their use of technology found that 72% plan to use AI for marketing in 2025, and 28% believe AI can help them overcome
their biggest marketing obstacles.
Thirty seven percent use AI to content creation and brainstorm on new ideas, followed by 32% who rely on it for customer data analysis, and 31% to
personalize messages.
Twenty-eight percent said they will use AI to automate tasks and help them overcome expected challenges like customer acquisition, and increasing sales. And 41% will use
AI to analyze customer data.
RXN with its think tank, the Data Catalyst Institute, conducted an online survey of 4,000 U.S.-based SMBs on behalf of the Connected Commerce Council between
November 6 and 25, 2024.
The findings suggest that 70% believe personalized ads attract new customers, but 71% of those warned that restricting data collection would hurt ad effectiveness, and
another 66% consider data security and customer privacy a major concern for their business.
Who needs TikTok when you have AI? Some 52% of SMBs believe AI is critical to their success, and 61%
expect these tools will help expand their business into new markets.
There are wide-reaching benefits, with 59% believing AI will positively impact the U.S. economy, and 54% believe it will
help society. They also acknowledge risk, with 84% saying privacy, trust, and safety are top priorities when it comes to AI.