Big Tech platforms, like Google and Meta, and trade organizations, like the IAB, are staunchly opposed to what they see as excessive limitations on data collection that will harm advertisers and publishers.
These companies and groups say they support privacy. The problem, they argue, is overregulation.
The current attempt at setting national privacy standards, the American Privacy Rights Act (APRA), would force companies to only collect data that’s absolutely necessary to provide a requested product or service. The bill was introduced earlier this year as a successor to the American Data Privacy and Protection Act, which hit a wall in 2022.
Still, it’s not compelling for lawmakers (or anyone, really) to listen to complaints from multibillion-dollar companies. Which is why Big Tech companies and other organizations often mobilize small and medium-size businesses as a lobbying tool.
Case in point: a virtual press conference hosted on Wednesday by the Connected Commerce Council (CCC), a lobbying organization based in Washington, DC, funded by large tech companies, including Google, Amazon and Meta.
Brands and publishers depend on targeted advertising
The press conference kicked off with Advertiser Perceptions presenting a recent study, commissioned by Google and the CCC, about the reliance SMBs have on digital advertising and what would happen to them if the APRA passes. Advertiser Perceptions surveyed 1,200 SMBs in the US, 200 national advertisers and 200 publishers.
According to the study, 82% of SMBs directly attribute their revenue growth last year to personalized digital ads. And without personalized advertising, one in five SMBs say they would be forced to close their doors, while another 20% would have to lay off staff.
Meanwhile, an inability to target ads would cause 37% of publishers to experience closures or layoffs, while 45% would implement a paywall, and 68% would increase the number of ads they show on their sites to make up for revenue losses.
These numbers “might seem like a big leap [from] limiting the use of one advertising vehicle,” said Lauren Fisher, GM of business intelligence at Advertiser Perceptions. But without targeted online ads, SMBs can’t compete for enough new customers, she noted, before turning the floor over to a handful of SMBs to speak for themselves.
(The SMBs that spoke during the conference did not necessarily participate in the study. Survey respondents were anonymous.)
The struggle for small businesses
Although these small business owners believe the APRA is well-intentioned, they also say that further limitations on their access to consumer data could be destructive for business.
“I’m swimming in an ocean of [national] advertisers that have more money than I do,” said Shallon Thomas, co-founder of T|W Tote, a Maryland-based luxury bag brand. “So, I have to be very, very specific on who I advertise to.”
T|W Tote relies on the information it gathers about consumers, such as age, gender, general location and, in some cases, income level, to reach customers, including retargeting the people most likely to buy its products.
Another small business called Twiddy & Co., a family-owned vacation rentals company based in North Carolina, also leans heavily on consumer and device data to create lookalike audiences based on traveling patterns. That information helps Twiddy retarget customers to encourage repeat bookings, said Clark Twiddy, the company’s president.
But the need for ad measurement is arguably just as important as audience targeting.
“APRA would make it hard, if not impossible, to collect the [necessary] data to show advertisers that their money is well spent on our website,” said LaKita Anderson, founder and publisher of Simply LaKita, a Florida-based recipe and food blog.
“The APRA misses the mark because it doesn’t balance consumer privacy and small business needs,” Anderson said. Anderson also noted that if she can’t effectively monetize her website with ads, she’d probably have to move her content behind a paywall.
Advertisers and publishers need to be able to collect at least basic customer data, Fisher said. And if this data is aggregated and anonymized, she added, it shouldn’t evoke the same sense of creepiness for consumers as more sensitive and personally identifiable data.
The bottom line, Fisher said, is that personalized digital advertising allows SMBs to “go head-to-head with large national brands.”
But the APRA, she said, is a threat to personalized advertising.
