Adoption of AI Marketing Tools Among SMEs: Insights from Technology Scale Validation in Malaysia

Abstract

The Fourth Industrial Revolution (IR4.0) has accelerated the digital transformation of businesses, with Artificial Intelligence (AI) emerging as a key enabler of competitiveness, particularly for small and medium-sized enterprises (SMEs). While AI marketing tools offer benefits such as efficiency gains, enhanced customer engagement, and improved decision-making, adoption rates among SMEs remain relatively low. This study, grounded in the Technology-Organization-Environment (TOE) framework, examines two technological factors, relative advantage and compatibility, as factors of AI marketing tool adoption among Malaysian SMEs. A survey of 226 SMEs was conducted, and the data was analyzed using Structural Equation Modeling (SmartPLS). The findings demonstrate that relative advantage and compatibility significantly influence adoption of AI marketing tools. These results confirm that SMEs are more likely to adopt AI marketing tools when the relative advantage and compatibility align with their existing business values, infrastructure, and processes. The findings provide insights for policymakers, such as government agencies and trade associations, to design support programs, incentives, and training initiatives that promote AI adoption. For practitioners, including SME owners and marketing managers, the results offer practical guidance on selecting and implementing AI tools that fit their business processes and enhance competitiveness. The study highlights how both technological fit and perceived benefits drive AI adoption, supporting SME digital transformation in the digital economy.