By Lou Mastria
Big Idea: Online advertising is invaluable to SMBs, communities, consumers and the nation – underscored by COVID pandemic, Rep. Lesko (R-AZ) said. A potential federal privacy law ought to reflect this reality.
The first face-to-face Digital Advertising Alliance (DAA) Summit in three years – DAA Summit 22 “All Together Now” -- featured a gathering of nearly 90 in-person participants. We gathered to hear two days of marketplace ideas, ethics and regulatory compliance information, and – vitally – what the prospects are for a federal privacy law to counteract the emerging patchwork of state laws that, if left unchecked by Congress, could hurt businesses and confuse consumers.
One Summit highlight was U.S. Rep. Debbie Lesko (R-AZ) who is a member of the U.S. House Energy and Commerce Committee, who commented on the federal privacy debate. She underscored the importance online data-driven advertising has played both in her district and nationwide. Following her remarks, she listened in as SMB representatives from Arizona and California talked about how vital responsible data collection and targeted advertising is to their businesses – in a forum hosted by DAA Board Member Lartease Tiffith, executive vice president, public policy, Interactive Advertising Bureau. Echoing her remarks from a March 1 Committee hearing, Rep. Lesko said such voices need to be heard by her colleagues on both sides of the aisle.
Having served as an Arizona legislator for nine years, including the last three in the Arizona Senate, before being elected in 2018 to Congress in the House of Representatives, Congresswoman Lesko sits on the prestigious Energy and Commerce Committee, where she serves on the Subcommittee for Energy in the Subcommittee on Consumer Protection and Commerce.
IAB’s Lartease Tiffith opened the discussion with a note of gratitude: “Congresswoman Lesko, we want to thank you for standing up on behalf of small businesses and for our industry at Energy and Commerce Committee hearing. We really do appreciate that. At that hearing on March 1, you stood up for small business. You are a champion of small businesses.”
Tiffith then invited Rep. Lesko to comment on the prospects for a federal privacy bill passing this year – and what we might expect from the current session of Congress.
Gridlock in Congress, with an Impact on Businesses
“It's very polarized right now. But I have worked in a bipartisan basis with my Democratic colleagues on issues that I think are important, not only to Arizona, but to the entire nation,” Rep. Lesko said.
She doesn’t see any resolution this year as many in Congress are focused on the midterms. “Everything is about the election in November. And it's unfortunate because I know on I.T. issues, and data privacy issues… I don't think anything of any major importance is going to get done before the election,” she said, noting that Democrats and Republicans had been conferring up to this point.
The Congresswoman also said that election headwinds also carry over to other Committee business, including invitees to hearings. She was disappointed that recent bills before the Committee included witness lists that excluded the one stakeholder most affected by the legislation: businesses that generate jobs and commerce for millions of Americans.
A ‘Yikes’ Moment – Twice in Two Bills – and Consumer Options
The Congresswoman said she was taken aback when hearing the description of the Ban Surveillance Advertising Act of 2022 (HR 6416). “The legislation bans targeted advertising online -- I mean just outright bans that. There goes all of your businesses, right?”
She said she put a pointed comment next to her notes on the bill, ‘Yikes.’”
Another one [HR 6796, the Digital Services Oversight and Safety Act of 2022] also caught her attention: “It establishes the Bureau of Digital Services oversight and safety with 500 staffers – 80 of which being technologists, 80 being sociotechnical experts – whatever the heck that is, and 15 being constitutional lawyers. And I put another ‘yikes.’”
Rep. Lesko also retold a story that when one of her Senate colleagues received an online ad after visiting the same product on a site, that particular Senator remarked how awful that was. “And I was like, hey, that’s targeted advertising. That’s how it is,” Rep. Lesko said. She also said that she believes that consumers should be able to opt in and opt out of the selling of their data and that consumers should receive more information and be provided with choice.
The Power of Online Advertising
Yet to turn benefits off by default – and hurt businesses and consumers in the process – may not be the wisest course of action: She remarked on how vital online advertising has been in her district directly, particularly during the COVID pandemic.
During the pandemic, businesses had their physical locations closed and they had to pivot to online sales. The online advertising industry was pivotal for small businesses to reach out to consumers to get them to buy their products.
“And it worked,” Rep. Lesko reported. “And the reason I know that is because I have a monthly conference call with all of the city mayors in my Congressional district. And during the pandemic, I was pleasantly surprised that their sales tax revenue had actually increased. You know, everybody thought that their sales tax revenue was going to go down through the floor, but it actually increased during the pandemic. And I'm sure that it was due to online sales and because of online advertising.”
The Congresswoman’s observations were underscored by three small business representatives, who spoke during an “Internet for Growth SMB Town Hall” discussion, also hosted by IAB’s Lartease Tiffith, which immediately followed her comments. They each see targeted advertising as a lifeline, and an efficient way to find and engage customers.
Speaking were three entrepreneurs:
Owner & Managing Partner
Press1toTalk.com | https://www.press1totalk.com/wordpress/
Celinda Damiana Cruz-Arce
Celley’s Sweets | https://cellyssweets.square.site/
Owner and Head Coach
Warzone Boxing Club|
(Upland, CA, with many weekends spent in Arizona)
Each spoke of their startup story. Drew Ament of Press1ToTalk.com manages a small business digital advertising agency that supports family and small business enterprises. While Ament’s startup began as a telephony service company, his clients increasingly asked for his help in getting them up to speed on digital ads, so he made the pivot. Many of his clients stick with his agency because of the success he’s enabled for them through online and social advertisements.
How Digital Ads Enabled Businesses to Survive a Pandemic
“We try to keep our clients happy and keep them in-house,” Ament said. “Instagram has been very helpful to us when we post a video, a simple video, and it gets out there. We get great responses. People come to us, we get a lot of engagement messaging, and it's tremendously helpful. During the pandemic, we did do some advertisement on Google AdWords, and if it wasn't for that type of stuff and being able to do that, we'd probably be closed by now.”
He told one example of a small boutique dress shop in upstate New York: “Typically, they only sell to people that come in the front door -- never had a website before, never had anything [digital]. Pandemic comes, you know, New York's completely shut down. They can't get clients into the store. [Through] a friend of a friend is how I got introduced to them. They called me up, said, hey, can you help us set up a website? We set up a website and about three weeks after that, we started advertising on Facebook and Instagram and then started Google AdWords as well. By November of that year, they were equal in sales to pre-pandemic levels strictly online.”
“And now that everything is opened back up,” Ament continued, “they're actually ahead of previous pandemic levels by about 60 percent. And that's obviously now a combination of in-store and online sales. But I can tell you right now there's no way they would have survived through the pandemic. The store would have shut down without digital advertising and without the ability to get their product in front of people online.”
“So it saved them,” Ament said. “And they're still here today. Which is an awesome story.”
Cruz-Acre of Celley’s Sweets also spoke about startup – one that she started in February 2020. “To my business, it's very important just because I run everything through social media -- Facebook, Instagram, TikTok. For example, if I do a promotion post on Instagram, I would schedule the post for Monday. So I would edit the post Sunday night to make sure all the details and all the hashtags, and all the captions there, are correct. I want to make sure that clients are getting the right information that's listed.
“And it's really, really important just because it gets the hook of the client,” Cruz-Acre said, “like, ‘oh, wow, this is exactly what I'm looking for. A birthday cake, a wedding cake, [or] an arrangement of what I need.’” Another business post may be of cookies, she said, and so on. Seeking to reach customers with exactly what they want.
She also said she’s bartered with social media influencers – and that has really helped her find new customers.
Franco of Warzone Boxing Club started his business in 1997 – originally as a training regimen for law enforcement, veterans and professional athletes – but has grown to encompass all types of community programs for kids, adults, special needs and other audiences seeking physical and mental fitness and self-defense.
“Well, it keeps us relevant out there from a simple video, a simple post. Good morning. If it were not for social media, we would literally be holding signs out front on the street corner. You know, we're opening our businesses, here, or whatever advertisement we have in the front. I'm in a shopping center, and the people that drive into that shopping center see our business and then that it would have no idea there's no market out in the front to advertise. So we literally just be holding signs out there,” Franco said. “So the platforms – TikTok, Instagram, Facebook, all that stuff -- is great because a simple video can go viral. It keeps you relevant out there. People know who you are. People that never followed us -- just because they like fitness, we [now] pop up on their feed and, you know, we get a potential client there.”
Franco continued, “We can't afford a budget … to get out there and market everywhere. So a simple video that has the correct hashtag goes around and everybody sees it. And you know, we get 20,000 views on one video” and some become customers. Franco said online advertising has allowed him to grow his business and if he wasn’t able to use online advertising, he would be forced to rely simply on a door sign and hope that the right people see it when they were driving by.
Making Sure Restrictions are Reasonable – Or Else, ‘Yikes’
Ament leaned in and said, “I agree with Congresswoman Lesko. The whole ‘yikes’ comment I mean, if we weren't able to use targeted advertising for any of the businesses that I help out on, we would absolutely die on the vine,” noting that his average clients spend hundreds, not thousands, of dollars on ads… Why are we restricting advertising to consumers when it's going to save our businesses money, and in the interim, that's going to save the consumer money in the long run? Don't restrict our use of data because of the abuse of a few companies in the market. Neither I nor the small businesses that I represent have nefarious purposes when we want to sell dresses by targeting a 30 year old or older female. There's no bad decision being made there. There's no negative effect of that ad. Tell your Congressman and write your Senator and tell them that there should be legislation on a national level that's restrictive but doesn't hurt small businesses. There should be reasonable expectations in the privacy of the data that's being used.”
Franco concurred, stating to the Congresswoman and the Summit attendees, “I'm all for certain restrictions and everything in moderation, including moderation, but being able to target audiences specifically is a good thing. Otherwise, we would just be wasting money. It just doesn't make sense. So I appreciate you fighting for us because we are a small business. We're not these huge corporations that, write off more than what I make -- so thank you for that.”
In speaking directly to Rep. Lesko, Cruz-Arce said, “I love what you said how you can give [consumers] the option to opt in or opt out. And that's really important just because if you give them the option to do that, then you can grow your company so you can grow your relationship with your client. You're able to ask them what they want, what they need. You're able to get the information without you even getting it from them. They're able to open up their wings to you and be like, ‘You know what? I love your business. I love the way you do your customer service. So you know what? I'm going to keep coming to you. I don't have to look around because you're giving me that exactly what I need, and I feel like that's what's important,’” Cruz-Arce said.
Following the discussion, a presentation by Jason Bier, general counsel and chief privacy officer, Adstra, and also a founder of the Federation for Internet Alerts, spoke of how responsible digital data collection and use (the same data collection and use systems that are foundational in digital advertising) enables a public safety alert system – most recently in the Coconino Fire Zone in Arizona.
If we don’t listen to consumers and small- and medium-businesses, there’s going to be a heavy toll on commerce and competition.