First of Its Kind Research Quantifies Digital Advertising’s Value to Small Businesses
Washington, DC (March 15, 2023): New research quantifies for the first time the enormous value digital advertising provides both small business advertisers (ad buyers) and publishers (sell ads on websites, YouTube, and apps). The report, “Maximum Impact: How Digital Ads Level the Playing Field for U.S. Small Businesses,” published by the Data Catalyst Institute on behalf of the Connected Commerce Council (3C), found 57% of advertisers and publishers earn more than $50,000 per year from buying and selling digital ads, respectively. Eighty-two percent of advertisers say digital ads help them reach customers more effectively than traditional ads like billboards and television, while 80% say digital ads help them compete with larger companies.
“Digital advertising is the great equalizer for small businesses,” said Beth Egan, Associate Professor of Advertising at Syracuse University’s S.I. Newhouse School of Public Communications. “Whether using ads to reach your target audience more effectively and efficiently than traditional advertising or selling ad space on your website or app, digital ads help entrepreneurs get started, find customers, make money, and compete with much bigger brands.”
The report also highlights how digital ad publishing helps small businesses like apps, blogs, and YouTube channels find revenue streams quickly and easily. With access to capital still a significant hurdle for Black and Hispanic business owners, ad sales revenue represents an alternative to investment capital. Seventy-two percent of Black-led SMB publishers, 65% of Hispanic-led SMB publishers, and 71% of publishers generally agree they would not have been able to launch and sustain their business without revenue from digital advertising.
“Ad revenue provides an alternative form of ‘seed funding’ for minority-led businesses that frequently face difficulty securing traditional startup capital or financing,” said Dr. Mark Drapeau, Editor In Chief of the Data Catalyst Institute. “Revenue driven by selling digital ad space is an easy and effective way for bloggers, YouTube personalities, app publishers, and startup founders to monetize their digital platforms right out of the gate.”
And while conventional wisdom suggests that Google and Meta dominate the digital ads marketplace, small advertisers use an average of four digital advertising platforms at any given time, with 64% using more than two and 27% using six or more ad platforms. Other popular platforms include those owned by Amazon, Microsoft (Bing, LinkedIn), and Twitter.
“Digital advertising works so well for small businesses because it can drive significant value with a minimal investment,” said Rob Retzlaff, 3C Executive Director. “There have never been more choices, better return on investment, or an easier way to compete than digital advertising to find new customers and grow. And it has never been easier to turn a blog or app into revenue than by selling digital ads.”
This study was conducted from Sept 6, 2022, to Oct 2, 2022, with a total sample size of 2,428 small- and medium-sized businesses (SMBs) of which 1,616 were SMB Advertisers (margin of error +/-2.4%), and 1,524 were SMB Publishers (margin of error +/-2.5%).