The following is a guest piece by Beth Egan, associate professor of promoting at Syracuse University’s S.I. Newhouse School of Communications. Opinions are the creator’s own.
After 25 years of helping businesses advertise to the fitting audiences and teaching promoting data and analytics, I do know what works on this industry and who wins and loses when big changes occur. So it’s frustrating to take a seat on the sidelines of academia and never shout “foul!” when the federal government goes after big tech and starts meddling in promoting regulation, which is able to ultimately hurt small businesses probably the most.
Before the web, mass media promoting was king. Television, radio and billboards were effective for giant corporations that desired to sell lots of products to tens of millions of people. Age and gender were the one real data points that mattered unless you advertised specialty products in specialty content, like magazines and broadcast programming targeting kids or minority communities. Most small businesses advertised using phone book, classified ads, community newspapers and coupon mailers.
Today digital media supports tens of millions of small business advertisers and tons of of hundreds of small creators and publishers. Digital promoting works because small businesses can find the people most probably to be concerned about their product or services based on what they show interest in online, which helps to avoid wasting money. Equally powerful is the real-time data advertisers receive about what ads are working, enabling many small advertisers to make small test buys and put money into people who work.
We’ve all seen ads pop up on our phones, and it looks like they know what we’re considering. When I first moved to Syracuse, New York, I purchased a warm winter coat online to survive the brutal winter. Unsurprisingly, an ad for that very same product appeared on my phone just a few days later. If ad platforms were spying on me, they might have known I purchased the jacket and wouldn’t have advertised it to me.
What’s actually happening is platforms like Google and Instagram, where many small businesses run ads, are using anonymous data about our behavior and search history to group people along with similar interests, and ads are shown to every group depending on what appeals to them. Let’s be clear — browser data collected and stored isn’t personally identifiable, like email addresses and phone numbers. It’s just telling a story about how an anonymous person spends time online.
Small advertisers are the largest digital promoting winners since it is the good equalizer. In a recent Data Catalyst Institute survey, 57% of small business advertisers report that digital ads generated greater than $50,000 in annual revenue, 82% say digital ads are simpler than billboards and tv and 80% say digital ads help them compete against larger corporations.
Unfortunately, our elected officials fail to grasp how data is definitely collected and used, and lots of falsely claim that digital ad platforms like Google and Facebook spy on people.
Federal agencies are threatening latest regulations, some in Congress need to cripple digital ads, and Florida laws could also prove extremely harmful. Any latest laws or regulations making data collection harder or nonexistent could be catastrophic for small businesses counting on digital ads. They would also harm consumers. Someone who likes mom-and-pop restaurants might start getting Applebee’s ads. That doesn’t help anyone except the large corporate brand.
The truth is digital promoting democratizes the web by helping small businesses grow. Whether using ads to achieve their target market more effectively and efficiently than traditional promoting or selling ad space on their website or app, digital ads help entrepreneurs start, find customers, make cash and compete with much larger brands.
I understand that privacy matters and it’s necessary for Congress to pass a national data privacy law that protects consumers and allows small businesses to proceed using digital promoting. But breaking or completely overhauling the whole digital ads market is the fallacious solution, and small businesses shouldn’t bear the brunt of bad policy.
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