Scotland’s SMEs, like all SMEs in the UK, form the backbone of the economy, with approximately 350,000 private sector businesses as of December 2024 (March 2025 data not yet released).
These businesses account for 55.9% of private sector employment, providing around 1.2 million jobs.
After years of stagnation, there has been a modest uptick in registered businesses in 2025, signalling renewed optimism in the post-pandemic, post-election, and post-Brexit context that Scottish and UK businesses are navigating.
The hospitality sector, in particular, is experiencing a resurgence, with notable growth in takeaways, food-to-go outlets, cafés, coffee shops, and restaurants. This is reshaping Scotland’s high streets into vibrant hubs for food and beverage experiences.
However, despite this recovery, many Scottish SMEs have yet to fully embrace e-commerce—a critical step toward unlocking international growth.
This is where NorthStar Consulting comes in. With expertise in e-commerce implementation, reputation management, and internationalisation strategies, we help SMEs navigate the complexities of digital transformation and global expansion.
E-Commerce Adoption Among Scottish SMEs
Despite their economic significance, many Scottish SMEs have yet to fully embrace e-commerce for selling their products or services, with a large number still not utilising digital platforms for sales.
More concerning is that some of these businesses have no immediate plans to adopt digital sales strategies.
Based on our research, we also find that concepts such as ROI (Return on Investment) and ROAS (Return on Ad Spend) are often not met with realistic budgeting, leading to missed opportunities.
On the positive side, among those already engaged in e-commerce, a significant proportion plan to expand their digital presence, with many viewing online selling as essential for future growth (based on interviews with 300 SME owners in Scotland and the UK conducted by NorthStar Consulting). Most importantly, Scotland’s SMEs are investing in AI.
Industries like hospitality and alcohol production—where Scotland is renowned for world-class offerings such as whisky and craft beer—can greatly benefit from leveraging e-commerce to tap into lucrative international markets.
Let’s explore how e-commerce and AI innovation can open these doors and unlock new growth opportunities for Scottish SMEs!
Thriving with AI and Innovation Thinking
To thrive in today’s competitive global marketplace, Scottish SMEs must integrate advanced digital marketing tools into their strategies. With a variety of platforms available, we’ll focus on two that stand out for expanding reach, driving growth, and maximising ROI and ROAS, with a clear focus on budget efficiency.
1. AI-Assisted Google Ads
Google’s Performance Max (PMax) campaigns have evolved significantly in recent years, offering businesses a powerful tool to drive more effective and efficient digital advertising.
These campaigns leverage AI to optimise multiple aspects of advertising, including ad placements, audience targeting, bidding strategies, and creative assets—all based on your business’s predefined goals, such as sales targets and budget allocation.
What makes PMax particularly appealing for international expansion is its ability to automatically run ads across Google’s entire ecosystem of platforms, including YouTube, Search, Display, Gmail, and Discover.
This means that rather than manually managing campaigns on multiple Google properties, PMax uses AI to optimise across the board in real time, ensuring your ads are shown to the most relevant audience with the highest potential for conversion.
Recent Changes to Performance Max
In 2024, Google made several updates to PMax that enhanced its utility for businesses aiming to scale internationally.
Now, advertisers have more control over creative elements, audience signals, and reporting, providing a clearer view of what is working and where to focus spending.
This flexibility allows businesses to more precisely tailor their strategies to specific markets, ensuring ads are not only reaching the right people but also speaking their language—both literally and figuratively.
Why PMax Can Outperform Meta Ads for Some Objectives
While platforms like Meta (Facebook/Instagram) are strong contenders for social media marketing, especially for building brand awareness and engaging with younger demographics, PMax offers distinct advantages in certain areas:
Cross-Platform Reach: PMax’s integration with Google’s entire advertising ecosystem allows it to reach users across a variety of platforms with one unified campaign, as opposed to Meta, which is confined to Facebook and Instagram.
Intent-Based Targeting: Google’s platform excels at capturing search intent. When users are actively searching for a product or service, PMax ensures your ads are presented right when they’re most relevant, potentially leading to higher conversion rates. Meta, on the other hand, relies more on interest-based targeting, which may not always align with users who are ready to make a purchase.
AI Optimisation: The power of AI in PMax allows for real-time adjustments and learning from data, continually improving ad performance. Google’s AI can optimise bids, placements, and targeting based on performance, whereas Meta’s ad platform, while advanced, may require more manual input and monitoring to get similar results.
While some businesses may be wary of the “black box” nature of AI-driven systems, if set up and managed correctly, Performance Max can increase traffic, drive higher conversion rates, and significantly improve ROI. However, like all AI-powered tools, it takes time to optimise.
Businesses will need to invest time in learning and tweaking their campaigns, but the results are often worth the effort. As more data is fed into the system, Google’s AI continues to improve its ability to predict which users are most likely to convert, refining ad placements and bidding strategies to maximise efficiency.
Investing in Learning and Adaptation
While Performance Max has become more expensive over time, the value it offers in terms of driving consistent returns and reducing the need for manual intervention makes it a strong investment.
With a focus on refining and adapting campaigns, businesses can achieve sustainable growth with a clear path toward international expansion and stronger ROI.
2. Reddit Ads for Niche Engagement
Believe it or not, Reddit offers a unique opportunity for authentic engagement with niche communities.
Unlike mainstream platforms, Reddit thrives on genuine, community-driven engagement through subreddits, which are topic-specific discussion groups. This makes Reddit a unique opportunity for businesses to connect with highly targeted, interest-driven audiences.
Reddit’s paid advertising options, including display ads and sponsored posts, use AI to optimise ad delivery, targeting specific subreddits, demographics, and interests.
By leveraging machine learning, Reddit ensures that your ads reach the most relevant audiences, driving quality traffic to your e-commerce site.
We’ve seen strong ROI from Reddit ads, particularly in the US, where the platform’s AI-driven targeting helps businesses connect with the right niche communities. While the platform can be time-consuming and somewhat expensive, the quality-driven nature of Reddit ads makes it crucial to budget wisely and set realistic ROAS expectations.
However, success on Reddit requires understanding its culture—authenticity is key.
Rather than focusing solely on direct sales, businesses should aim to engage meaningfully within communities. Our recommendation here is to combine the paid and the community-engaging publishing because it can drive ROI.
By contributing valuable content and building trust, SMEs can drive traffic to their e-commerce stores. With the right strategy and clear objectives, Reddit offers Scottish SMEs a unique avenue for international growth.
Why AI Tools Are Essential for Global Expansion
AI-driven advertising platforms offer several advantages for Scottish SMEs aiming to scale internationally:
- Efficiency: Automation reduces manual effort, allowing teams to focus on strategy rather than execution.
- Precision Targeting: Advanced algorithms analyse user data to deliver ads to the most relevant audiences, maximising impact.
- Budget Optimisation: Real-time analytics enable businesses to allocate resources effectively, ensuring every pound spent contributes to measurable outcomes.
That said, businesses should maintain oversight to ensure alignment with broader objectives.
Over-reliance on automation without thoughtful input risks diluting brand messaging or missing opportunities for creative differentiation.
Key Takeaways for Scottish SMEs
- Embrace E-Commerce Now: If you haven’t already adopted e-commerce, now is the time to start. Even small steps—like setting up a Shopify store or listing products on Amazon—can yield significant returns. Partner with NorthStar Consulting to streamline the process and avoid common pitfalls.
- Leverage AI Tools Strategically: Platforms like Google Ads and Reddit Ads provide powerful ways to reach global audiences, but human oversight remains crucial to maintaining authenticity and relevance. NorthStar’s expertise ensures that your campaigns strike the right balance.
- Focus on Niche Markets: Identify underserved segments abroad where your product stands out. Whether it’s premium whisky in China or sustainable hospitality solutions in Europe, targeting specific demographics increases your chances of success. NorthStar’s market research capabilities can help pinpoint these opportunities.
- Invest in Digital Skills and Reputation Management: Equip your team with the knowledge and tools needed to navigate the digital landscape. Training programs or partnerships with digital agencies like NorthStar Consulting can accelerate your learning curve while safeguarding your brand’s reputation.
Seizing Opportunities in the Digital Economy
As Scottish SMEs continue to invest in their growth, embracing advanced e-commerce and AI-assisted marketing strategies will be pivotal for achieving sustainable growth.
Businesses in sectors like hospitality and alcohol production have immense potential to expand internationally by leveraging digital tools that connect them with global audiences.
Curious about really making the most of e-commerce, internationalisation, and reputation management?
