America’s Small Businesses Depend on Digital Advertising

Efforts to Regulate the Online Economy Must Also Protect Local Businesses’ Ability to Reach Customers, Compete, and Grow

Small businesses depend on digital advertising to cost-effectively reach and attract customers from across town or across the globe.

Data-driven digital ad platforms let small businesses carefully target their messages to the customers most likely to find them interesting and relevant – saving money while leveling the playing field against larger competitors.

As Congress considers proposals to regulate the digital economy, thoughtful approaches will protect consumers while also protecting small businesses’ access to the digital advertising tools they need to survive and grow.

• A Thoughtful Federal Privacy Framework. Small business owners would strongly prefer national privacy legislation to the current patchwork of inconsistent, confusing, and costly state laws. Unfortunately, the American Data Privacy and Protection Act (ADDPA) takes the wrong approach – imposing heavier regulations in some states, duplicating enforcement between state and federal agencies, and exposing small businesses to lawsuits and fines. When the EU tried a similar approach, small businesses lacking the resources of bigger competitors were hurt most – while consumers griped about confusion and inconvenience.
• Protecting Small Business’ Advertising Tools. The Federal Trade Commission is considering sweeping new regulations on data-driven digital advertising platforms – regulations that could strip millions of small businesses from the tools they need to cost-effectively reach customers. The FTC’s misguided effort ignores surveys showing consumers prefer targeted, relevant ads and discounts to more generic ones – and forgets that digital advertising encourages competition by empowering new startups and mom-and-pops to cost-effectively reach customers across town or across the globe. Regulating the digital economy demands a scalpel, not a sledgehammer – and it’s a job better left to elected lawmakers in Congress.
• Breaking Up Digital Ad Platforms Will Mean Chaos and Costs for Small Businesses. Proposals like the Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act would forcibly break up many of the digital advertising platforms small businesses use to cost-effectively deliver their ads to potential customers. Rather than increasing “competition” or “transparency,” this legislation would unleash unpredictability, complexity, and higher advertising costs on the ecosystem of small businesses and digital creators who use Integrated ad- buying and -selling networks. These proposals may be intended to punish a few big companies – but the millions of small advertisers using their platforms would end up footing the bill.