The Impact of AI-Powered Advertising on U.S. Small Business Growth

This working paper explores the transformative role of AI-powered advertising platforms, particularly Google Ads' Smart Bidding, in supporting the growth of small and medium-sized enterprises (SMEs) in the United States. It analyzes how AI-driven marketing tools enhance operational efficiency, optimize customer targeting, and improve advertising ROI for SMEs, allowing them to compete more effectively in digital markets. The paper further examines the broader economic implications, including SME-driven job creation, innovation, and national economic diversification. Drawing on recent empirical studies and industry reports, this research highlights both the opportunities and challenges of AI adoption for small businesses. It provides a foundation for future policy recommendations and serves as an early contribution to the field of AI's impact on economic development. (Working paper – independent research; pending peer review.)