Ready, set, grow: Empowering small businesses to thrive in changing economic landscapes

The backbone of our economy

Small businesses aren't just important—they're essential to our global economic fabric. Consider these impacts:

• Small businesses generate 44% of U.S. economic activity. (U.S. Chamber of Commerce)

• They represent about 90% of global businesses and over 50% of employment worldwide. (World Bank)

• They create two-thirds of new jobs in the U.S. (U.S. Small Business Administration)

• As we celebrate Small Business Month, we recognize not just their larger economic contributions, but their role as innovators, community builders, and drivers of local economies.

And at Microsoft Advertising, we also understand the unique challenges small businesses face.

Navigating today's economic realities

From tariffs to shifting consumer behaviors, small businesses face a particularly challenging landscape in 2025.

• Rising tariffs: New tariffs on imported goods are creating pricing pressures and supply chain disruptions. According to the Peterson Institute for International Economics, recent tariff increases could impact over $300 billion in goods commonly used by small businesses.

• Supply chain disruptions: The U.S. Census Bureau's Small Business Pulse Survey indicates that 45% of small businesses are still experiencing domestic supplier delays.

• Economic uncertainty: With inflation concerns and fluctuating consumer spending habits, the National Federation of Independent Business Small Business Optimism Index reports that 72% of small business owners express uncertainty about economic conditions over the next six months.

• Shifting consumer behaviors: Post-pandemic consumer habits continue to evolve, with a Constant Contact Small Business Survey showing that 63% of small business owners have had to adapt their business models to meet changing customer expectations.

In this environment, efficiency and maximizing ROI aren't just good business practices—they're essential survival strategies. Small businesses need partners who understand these pressures and provide solutions tailored to navigate them.

Supporting small businesses through market volatility

At Microsoft Advertising, we offer AI-driven tools and resources specifically designed to help SMBs grow, save time, and maximize ROI in uncertain times.

Key strategies for navigating today's market

1. Capitalize on high-intent customers

• Target with precision: Focus your budget on consumers already searching for your products using Search Campaigns.

• Capture shifting behaviors: Implement Dynamic Search Ads to adapt to unexpected high-intent queries.

• Reconnect efficiently: Use Remarketing Lists for Search Ads (RLSA) to convert high-intent users.

2. Lean into storytelling

• Build brand loyalty: A Mailchimp small business marketing survey found that 64% of small business customers feel a personal connection to the brands they buy from. Authentic storytelling can help strengthen retention.

• Showcase your values: Use Multimedia ads to highlight your story and differentiate from competitors.

• Leverage AI for messaging: Use Copilot to craft compelling narratives that resonate with your audience.

3. Build value with local customers

• Emphasize local sourcing: According to a Salesforce Small Business Trends report, 59% of small business customers say they're more likely to support businesses with locally sourced products.

• Target nearby customers: Use Location Targeting and Location Extensions to reach high-intent local shoppers.

• Connect with communities: A Bank of America Small Business Owner Report found that 64% of small businesses actively support their local communities, creating stronger customer loyalty.

4. Focus on existing loyal customers

• Prioritize retention: According to the Kabbage Small Business Revenue Index, small businesses that focus on customer retention see 40% higher revenue growth than those prioritizing acquisition.

• Reward loyalty: A GoDaddy study of small business customers found that 84% of consumers say loyalty or rewards programs influence their decision to continue purchasing from a small business.

• Personalize communications: Use Audience Ads to reconnect with past buyers through tailored messages and exclusive promotions.

5. Use transparency to build trust

• Communicate clearly: During supply chain disruptions, being transparent about pricing or availability builds credibility. According to a Visa Back to Business Study, 82% of customers say transparency in communications is a key factor in choosing which small businesses to support.

• Use extensions: Explain updates and show appreciation with Callout Extension or Structured Snippets. 

The small business advertising toolkit: More solutions for today's challenges

Whether you're looking to connect with audiences better or discover how AI can enhance your campaigns and workflows, our Small Business Advertising Toolkit is designed to help you achieve more with less.