New Research Shows Overregulating Data Will Severely Harm Illinois Small Businesses
WASHINGTON (Oct. 14, 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 recent study by the Connected Commerce Council (3C), Advertiser Perceptions and Google found a direct correlation between the success of Illinois 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 four in five Illinois SMBs attribute 2023 revenue growth to personalized digital ads, and 75 percent use the ads to find new customers and market to their community.
“I help small businesses develop advertising strategies to grow and compete, so I see firsthand how valuable personalized digital ads are for business owners,” said Salil Gandhi, owner of digital marketing firm SBO Buzz in Chicago. “Overregulating basic data would make advertising online much more expensive and complex for small business owners and publishers, both in Illinois and nationwide.”
The study showed that personalized digital ads play a critical role in Illinois SMBs’ financial health and sustainability. It found that half of Illinois small businesses say banning these ads would severely hinder their ability to reach new customers.
“Illinois 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, nearly half of Illinois SMBs would have to raise prices to make up for reduced sales and cost efficiencies.
“Small businesses in Illinois 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.
