New Research Shows Overregulating Data Will Hurt Small Businesses and Digital Publishers
WASHINGTON (June 26, 2024)— A new study led by the Connected Commerce Council (3C) and Advertiser Perceptions found that overregulating data that powers personalized digital advertising would severely impact small and medium-sized business advertisers (SMBs) and publishers that use these tools to find customers, grow, and measure the effectiveness of their ads. The study comes as Congress considers sweeping new legislation called the American Privacy Rights Act (APRA), which would restrict the collection of data that facilitates digital advertising. Personalized digital ads use basic data such as consumers’ interests, demographics, online behavior, or other data to serve the right ads to the right audiences.
The study found that 69% of SMBs use digital ads to find new customers. Of those SMBs using digital ads, most (59%) said the ads were more effective than TV, radio, or print ads, with 82% attributing 2023 revenue growth to online ads.
Notably, more than half of SMBs said that digital advertising helps them save time and money on marketing. In addition, publishers and advertising platforms offer self-service tools that guide SMBs through the advertising process and even make recommendations to help them with their advertising efforts.
“As a small family business for nearly fifty years, we simply don’t have the resources of some of our national competitors to launch national marketing campaigns,” said Clark Twiddy, President of Twiddy & Company along the Outer Banks of North Carolina. “Digital ads help us create a better experience for our customers, invest in our wonderful team, and build a better resource for our local community.”
More than a third of US small business advertiser respondents said losing the ability to use personalized digital ads would hurt their business’s sales, and nearly half said they would need to raise prices. That squeeze, the study showed, would lead nearly 1 in 5 SMBs to close shop; an equal proportion would be forced to lay off workers.
“Small businesses lean heavily on digital advertising,” said Lauren Fisher, GM 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 found that US small business publishers would struggle without personalized digital ads, with 37% reporting they would face layoffs or close their business. Further, forty-five percent of small publishers say they would implement paywalls or move to subscription models if personalized ads were banned. The ad-supported web has been tremendously successful for small publishers and consumers alike. Subscriptions and paywalls will only increase costs for consumers while hurting publishers’ bottom lines.
“APRA would stop businesses and their marketing partners from collecting measurement data to help optimize ad and website performance,” said LaKita Anderson of Panama City, FL, who publishes ads on her cooking blog. “These activities are essential for any small publisher to understand ad performance and if improvements are needed.”
Access to the full study can be found here.
Methodology:
In partnership with Connected Commerce Council and Google, Advertiser Perceptions surveyed 1,200 small and medium-size businesses (SMBs), 210 large advertisers, and 200 publishers in March-April 2024 to understand the value of personalized advertising to their organization. SMBs included advertisers with fewer than 500 employees, while large advertisers included businesses with at least 500 employees. Publishers included companies with ad-supported digital sites or apps that get at least 3 million unique monthly visitors. 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 US Census data as a baseline for business distribution in each state.
