By Sam Larson
Vice President, Government Affairs

AIM members across a range of industries and sizes use digital advertising as a cost-effective way to reach new customers.

Digital platforms allow companies large and small to reach specific audiences based on demographics, interests, behaviors, and even location. Whether through search engines, social media, or streaming platforms, companies can deliver the right message to the right person at the right time.

One of the biggest advantages of digital advertising is measurability. Campaign performance can be tracked in real time, providing detailed insights into impressions, clicks, conversions, and return on investment. This data allows marketers to adjust campaigns quickly, improving results while reducing wasted spending.

Digital advertising is also cost-effective and flexible. Businesses can start with modest budgets, test different creative approaches, and scale what works best. Not every business can afford a Super Bowl commercial but, with the right digital tools, smaller companies can compete with larger brands by targeting niche audiences and optimizing campaigns for efficiency.

A new report commissioned by AIM and conducted by the Connected Commerce Council (3C) confirms the value of digital advertising. Eighty-eight percent of Massachusetts small-business advertisers say data-powered digital ads help them reach new customers. Eighty-four percent say digital ads deliver a better return on investment compared to traditional, offline ads. These tools level the playing field, allowing smaller businesses to reach Massachusetts consumers efficiently.

Many of those key advertising tools could be put in jeopardy by controversial legislation under consideration in the Massachusetts State House. Last fall, the state Senate passed The Massachusetts Data Privacy Act, a sweeping bill that would establish new consumer rights related to data privacy and restrict the use of digital advertising. The House of Representatives is considering its own comprehensive data privacy bill H.4746. Nothing has reached Governor Maura Healey’s desk so far.

AIM recognizes the importance of data privacy and is supportive of a framework that is consistent, thoughtful, and comprehensive. We believe in safeguarding consumers’ privacy, expanding consumers’ rights, and protecting personal information.  However, that approach must be balanced with employer feasibility, compliance costs and avoiding unintended consequences that negatively impact the state’s economic competitiveness and our world-class innovation ecosystem.

One particular concern is a standard in both bills that would limit data collection to products or services explicitly requested by the consumer. Companies could only use data to fulfil a customer transaction and nothing else. The provision would prohibit businesses from seeing crucial data about whether their ad is working and reaching the intended audience.

While many small businesses will be exempt from the legislation, those companies will not be shielded from the downstream effects of a strict data-minimization standard. Small businesses often rely on data from larger businesses and technology companies to identify their ideal customers. A strict data-minimization standard cuts data off from everyone, eliminating opportunities for efficient advertising.

AIM’s new report with 3C indicates that over three-quarters (78 percent) of Massachusetts SMBs often collect basic, non-sensitive customer data to enhance direct marketing efforts and to better target digital advertisements. It is clear that small-business advertisers use data to make smart business decisions:

• 78% use nonsensitive data to enhance marketing efforts
• 67% use data to remarket customers
• 76% use general, anonymous customer location data to inform business decisions such as where to advertise, find growth opportunities, or open new locations

In addition, most Massachusetts small-business advertisers use data-powered ads to compete, grow, and succeed:

• 84% say digital ads are important to their company’s success.
• 88% say digital ads help them reach new customers, and 80% use them to reach local customers.
• 84% say digital ads deliver a better return on investment compared to traditional, offline ads (e.g., TV, radio, newspaper).

The report is also clear that restrictions on data collection and processing would hurt Massachusetts small-business advertisers:

• 59% say their digital ads would be less effective if their advertising partners couldn’t collect or process data.
• 50% of all SMBs say that without access to tools like personalized ads and analytics, they wouldn’t be able to reach new customers efficiently. MA SMB’s face many challenges entering 2026

The report clearly shows that data usage and digital advertising are critical support tools for AIM members, especially our small and medium-sized businesses. AIM’s Government Affairs team is working hard to ensure sensible regulations that protect consumers and small businesses at the same time.

If you have concerns about restrictions on digital advertising or want to know more about our work on important technology issues like data privacy and artificial intelligence, please contact me at slarson@aimnet.org