Congress is considering new legislation to protect consumer privacy. But limiting the ability to use certain user data for ad targeting can be harmful to some small businesses.
For example, J. Landress Brass is a New York City-based company that manufactures, sells, and repairs brass instruments. Owner Josh Landress uses a lot of online ads targeted at people who play these instruments.
He told Spectrum News 1, “I need to get those people out there, and without access to those ads and reaching that market, it would be detrimental to my business and other businesses like mine.”
Essentially, if Landress couldn’t use search data and information about their real interests, they would have to send ads to a much larger, more general group. This will ultimately cost the business more and be more inefficient. Those additional costs may also be passed on to consumers.
A recent report from the Connected Commerce Council suggests that targeted digital ads are a big deal for small and medium-sized businesses. In fact, 69 percent of these respondents said they use targeted ads to acquire new customers. And 59 percent agreed that it is more effective than other forms of advertising.
Currently, the most important privacy legislation Congress is considering is the American Privacy Act, which would regulate what types of data websites can collect. This could ultimately put this type of targeted advertising at risk.
Many industry experts agree that more federal laws are needed, especially since there is currently so much variation in state laws. So providing clear rules to companies across the US would make things more straightforward. However, more information on how this law may affect small businesses should be important to any decisions.
Syracuse University Marketing Professor Beth Egan told Spectrum News 1, “The challenge we’re finding as an industry is that the people who write the law don’t really understand how the digital advertising ecosystem works, so they don’t take it. considering the real world consequences for small businesses that need to comply with the structure they have under current regulations.”
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