New Research Shows Overregulating Data Will Severely Harm Texas Small Businesses

WASHINGTON (Oct. 3, 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 Texas 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 Texas SMBs use personalized digital ads to find new local customers, emphasizing the ability of these ads to connect businesses with consumers who are most likely to be interested in their products or services.

“We use personalized digital advertising to find new customers and drive revenue, so data plays a key role in our business’s success,” says Jason Needleman, CEO of Peacock Alley in Dallas, Texas. “Overregulating basic data would make advertising online much more expensive and complex for small business owners, both in Texas and nationwide.”

The study showed that personalized digital ads play a critical role in Texas SMBs’ financial health and sustainability. It found that 50 percent say banning personalized ads would severely hinder their ability to reach new customers and 34 percent say revenue and sales would drop.

“Texas 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, 50 percent of Texas SMBs would increase the prices of their products or services.

“Small businesses in Texas 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.