Research Shows Overregulating Data Will Severely Harm Michigan Small Businesses

WASHINGTON (Oct. 28, 2024) — As the House Energy and Commerce Committee recently considered passing the American Privacy Rights Act (APRA), legislation that would restrict the collection and use of data used to power digital ads, a study by the Connected Commerce Council (3C), Advertiser Perceptions and Google found a direct correlation between the success of Michigan small and medium-sized businesses (SMBs) and the use of personalized digital advertising. Personalized digital ads use basic data such as consumers’ interests, demographics or online behavior to serve the right ads to the right audiences. 

The study found that 75 percent of Michigan small businesses use personalized digital ads to fuel growth and compete with bigger brands, and 65 percent say digital ads perform better than TV, radio, print and out-of-home ads. 

“I use personalized digital ads to find new customers and drive sales, so data plays a key role in my business’s success,” said Deana Neely, founder and CEO of Detroit Voltage in Detroit, Mich. “Overregulating basic data would make advertising online much more expensive and complex for small business owners and publishers, both in Michigan and nationwide.”

The study showed that personalized digital ads play a critical role in Michigan SMBs’ financial health and sustainability. It found that 39 percent would be forced to lay off staff or close if they could no longer use personalized digital ads.  

“Michigan small businesses lean heavily on digital advertising,” said Lauren Fisher, general manager of business intelligence for Advertiser Perceptions. “Specifically, they rely on personalized digital ads to reach customers, grow their revenue and compete with bigger players in a cost-efficient way.” 

The study also showed that overregulating data would negatively impact consumers. In the absence of personalized ads, more than half of Michigan SMBs would have to raise prices to make up for reduced sales and cost efficiencies.

“Small businesses in Michigan leverage digital advertising to stand out against competitors and get ahead in today’s economy,” said Rob Retzlaff, 3C’s executive director. “If the digital advertising landscape changes, small business owners will face tough decisions, like laying off staff, raising prices or even shutting down.”

Methodology:

Advertiser Perceptions surveyed 1,200 U.S. small and medium-size businesses (SMBs) in March-April 2024 to understand the value of personalized advertising to their organization. SMBs included businesses with fewer than 500 employees. All respondents were involved in decision-making about digital ads and used personalized advertising. National-level results are weighted to be geographically representative using 2021 U.S. Census data as a baseline for business distribution in each state.