Arion Herbert and his wife, Erica, started their recreational sports-league business in 2016. Originally a way to gather friends and family outdoors, it quickly grew into a league with players and teams from all around Charlotte, N.C.
The company, called Main Attraction Recreational Sports or “MARS,” has since grown to making close to $500,000 in annual revenue. Herbert believes that the success, in part, is due to generative artificial-intelligence tools.
Herbert hired assistance through the online freelance marketplace Fiverr to create AI-generated marketing materials for their events. He said the use of AI marketing has helped MARS stand out and attract more customers than when they were merely relying on word-of-mouth marketing and a homemade logo.
“It’s a no-brainer for us,” he said.
Approximately 23% of small businesses in the U.S. are using AI technology to produce goods and services, according to a recent survey carried out by the U.S. Chamber of Commerce.
Researchers typically define AI as computer systems and software able to perform tasks normally requiring human intelligence, like decision-making, speech recognition, and language processing.
Small businesses that have taken the leap and are now experimenting with AI tools — like MARS, which used a freelancer to specifically create marketing materials using AI image-generation tools — are learning that it’s helping them complete tasks that they wouldn’t otherwise be able to afford.
An AI-generated ad created for MARS’ kickball festival for $19.66.
The freelancer hired by Herbert’s company to create images used text-to-image AI tools like Microsoft Bing’s
MSFT,
+0.28% image creator and Midjourney. These have helped Herbert save money. Images that cost $50 would have previously cost the company $250 to create.
“It’s low risk, high reward because the prices that we pay for this content are so feasible in terms of what you would spend to get content like this created [by a human],” Herbert said.
Roughly 60% of small businesses in the U.S. that currently use AI in their marketing say they have saved time, with 33% estimating that they save more than 40 minutes per week on marketing by using AI, according to an August 2023 survey of 486 small-business decision-makers by Constant Contact, a small business-focused digital-marketing platform. More than 25% of those respondents expect AI to save them at least $5,000 over the next 12 months.
A challenging business environment
But as the cost of labor, rent and raw materials have risen — along with interest rates — it’s been a tough time for tech companies more broadly that provide services to small- and medium-sized businesses. It’s made it all the more critical for small businesses to find cheaper alternatives to traditional business-to-business services.
Paycom, a payroll services software company, saw its stock decline more than 37% year-to-date with lower-than-expected revenue growth. Bill, a software company that automates back-office financial services “powered by artificial intelligence,” has seen its shares plummet over 35% year-to-date.