Small Business Owners Voice Concerns With Proposed Federal Data Privacy Bill

WASHINGTON (July 17, 2024): Small business owners Clark Twiddy of Twiddy & Co., LaKita Anderson of Simply LaKita, and Shallon Thomas of T|W Tote today voiced concerns over how the American Privacy Rights Act (APRA) would impact their ability to use personalized digital advertising – which uses basic data such as consumers’ interests and demographics – to serve the right ads to the right audiences. Twiddy, Anderson and Thomas were joined by Lauren Fisher from Advertising Perceptions, who presented new research highlighting digital advertising’s value to small businesses. 

APRA, which is sponsored by Rep. Cathy McMorris Rodgers (R-WA) and Sen. Maria Cantwell (D-WA), says businesses using more than 200,000 data points a year can only collect the data necessary to provide customers a specific product or service. Such restrictions would prevent small businesses from using data to market to the right audiences, and make it impossible to tell existing customers about special offers or products that might interest them. Critically, the data restrictions also mean small businesses would lose access to personalized digital advertisements that allow them to efficiently reach the right audiences and measure the effectiveness of their campaigns.

“Our ad partners process data to help ensure that we send the right advertisements to the right audience,” said Thomas. “That helps us maximize our small advertising budget and drive sales. I know lawmakers’ intentions are good, but APRA’s extreme data restrictions will cost small businesses like mine their ability to find customers and keep growing.” 

The three business owners stressed the need for thoughtful, comprehensive national legislation to replace the current patchwork of state privacy laws. They also noted that APRA’s “private right of action” would make small businesses easy targets for costly, frivolous lawsuits. 

“APRA misses the mark because it doesn’t balance consumer privacy and small business needs,” said Anderson. “My business makes money from the ads we sell on our website. APRA would make it harder, if not impossible, to collect the data I need to attract advertisers and show them their money was well spent.”

The new research, published by Advertiser Perceptions in partnership with the Connected Commerce Council and Google, illustrates how important personalized digital advertising is to small and medium-sized businesses (SMBs) and publishers: 69 percent of U.S. SMBs use personalized digital ads to find new customers, and more than half said personalized digital ads help them save time and money on advertising. 

“Digital ads are incredibly cost-effective, which means they help level the playing field for SMBs hoping to broaden their customer bases or reach existing customers,” said Lauren Fisher, general manager of business intelligence at Advertiser Perceptions. “They’re critical to small businesses’ success competing with big brands with big advertising budgets.” 

The report also found that without personalized advertising, nearly one in five U.S. SMBs would be forced to close, and 20 percent would need to lay off staff.

“Our business couldn’t compete with larger vacation rental companies without the data that powers our personalized ads and customer outreach,” said Twiddy. “APRA would tie our hands.”