Tallahassee, FL (May 9, 2023): Several small businesses are expressing frustration and disappointment over the passage of Senate Bill 262, legislation regulating how businesses collect and use anonymous data online to find customers, grow, and succeed. While the bill’s proponents claim it reins in large technology companies, the restrictions on collecting and using online anonymous data, the first such regulation in the country, will increase online advertising costs and hurt small businesses the most.
“I met with several legislators in Tallahassee, and they don’t understand how our online publishing business operates,” said Morgan Overholt, owner of several travel blogs, including HeyOrlando.com. “Digital advertising represents 75% of my income. Anyone who believes SB 262 only impacts companies larger than a billion dollars is wrong. This new law could put me out of business.”
SB 262’s small business impact has been debated since the bill was introduced. Small businesses that advertise online need ad platforms to use consumer data to ensure their ads reach only people in their area (geolocation data) and are correctly shown on consumer devices (phone/tablet/laptop, operating system, and browser data). Small online publishers that sell ads need partner platforms to use data so the publishers understand their readers, can promote their valuable local and niche audiences, and sell ads for the best possible prices to advertisers looking for specific audiences.
Over 100 businesses signed a letter last month asking Florida legislators to oppose the bill in order to “preserve the current digital ad system that works so well for small businesses.” In addition, small business leaders traveled to Tallahassee to meet with legislators and testify at the Senate Rules Committee hearing on April 24.
“Targeted digital advertising is literally how we compete with the giants like Neutrogena with billion dollar ad budgets and has been instrumental in our success,” Alexander Fedorowicz, owner of Miami skincare products company QRxLabs, said in his testimony. “Our platform partners use anonymous data to identify the best recipients of our ads, and the result is happy consumers and our successful small business. Changing how online ads work will make them no more useful than billboards or require budgets far beyond what we can afford.”
The final version of SB 262 added back several provisions that the Senate Rules Committee had removed, including a requirement for large online platforms to allow individuals to opt out of anonymous data collection related to location, device, and language preference. This makes it harder for large advertisers like Google and Facebook to provide small businesses with affordable, effective advertising by limiting the data that powers those ads. Similarly, the bill will impact websites, blogs, YouTube Channels, and apps that rely on advertising revenue to run their business.