Behind the Algorithm: What Instagram + AI Means for Small Business Growth

By Corey C. Walker

If you’ve ever felt like you’re playing a guessing game with Instagram’s algorithm, you’re not alone. One week your posts are crushing it, and the next, it feels like you’re talking to a brick wall. The truth is, in 2025, Instagram itself is powered more and more by artificial intelligence (AI).

That means the algorithm isn’t just about likes and hashtags anymore. It’s about how AI decides what content people see, when they see it, and how they interact with it. For small businesses, understanding this shift can be the difference between staying invisible and getting discovered by new customers.

How Instagram Uses AI Today

Instagram’s algorithm is fueled by AI in just about every corner of the app. Here’s what that means for your marketing:

Content Ranking: AI studies user behavior, what people watch, save, share, and comment on, to predict what they’ll want next.

Reels and Video Push: The platform’s AI prioritizes video, especially short-form Reels, because they keep users on the app longer.

Ad Targeting: AI sorts through massive amounts of audience data to get your ads in front of people most likely to click, buy, or engage.

Recommendations: AI plays a huge role in Explore and suggested feeds, surfacing posts from accounts users don’t even follow.

In short, AI is the gatekeeper between your content and your audience.

What This Means for Small Business Growth

So how does all this AI-driven decision-making affect your business?

1. Quality and Relevance Matter More Than Ever

Instagram’s AI rewards content that sparks real engagement. That means focusing on value, entertainment, or education quality over quantity.

2. Consistency Wins

AI loves patterns. Whether you post daily, three times a week, or on a set schedule, stick with it. Consistency tells the algorithm you’re reliable.

3. Engagement Is Everything

AI favors posts that get people to act, saving, sharing, or commenting. Encourage your followers to do something, not just scroll past.

4. Ad Spend Works Smarter

AI-driven ad targeting helps smaller budgets go further. When you set clear goals, Instagram’s AI learns who’s most likely to respond.

5. Trends Can Speed Up Growth

AI prioritizes trending audio, formats, and topics. Small businesses that move fast and jump on trends can outpace bigger brands weighed down by approval chains.

Practical Steps for Small Businesses

Here’s how to work with Instagram’s AI, not against it:

• Post More Reels: The algorithm is prioritizing them, and that’s not changing anytime soon

• Use AI Tools Yourself: Caption generators, video editors, and analytics tools can help you create better content faster

• Analyze Insights: Study your top-performing posts and double down on what’s working

• Engage Back: Respond to comments and DMs. The algorithm rewards ongoing interaction

• Test Ads in Small Batches: Let AI optimize your ads before you scale up your budget

  
  

Instagram and AI together make a powerful combo. For small businesses, it’s not something to fear—it’s something to lean into. When you understand how the algorithm uses AI, you can fine-tune your content strategy to reach the right people at the right time with the right message.

Small businesses that embrace this shift and stay consistent with engaging, relevant content will compete at a whole new level. And here’s the good news, you don’t need a big marketing budget to make it happen.

In 2025, winning on Instagram isn’t about gaming the algorithm. It’s about understanding the AI behind it and putting it to work for your business.

Written by Corey Walker, co-author of five bestselling Dummies books focused on Instagram, and social media marketing agency owner specializing in growing leads and sales for service-based businesses. Contact me today for a free 15-minute consultation!