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New Research: 93% of European Small Businesses Use Targeted Ads

Jan. 19, 2022 (BRUSSELS)As the European Parliament considers proposals to ban targeted advertising, a new survey shows that 93% of European small business leaders have embraced data-driven advertising that enables advertisers to reach recipients based on products and services that interest them, 76% percent called targeted ads valuable and 34% say they are critical to their business.   

“Targeted advertising is one of the most important small business innovations of the past twenty years,” said Brandon Mitchener of the Connected Commerce Council.  “It allows even the smallest firms to find niche audiences for their products, and has been a pandemic lifeline for SMEs across Europe. Advertisers understand privacy concerns and do not want to alienate their customers, which is why targeted ads are only utilized with consumers who approve them under GDPR. It is remarkable that some Members of the European Parliament, notwithstanding consumer approvals, are still relentlessly advocating against targeted ads that deliver clear and unrebutted consumer and small business benefits.” 

3C commissioned the survey of 1,380 European small business owners and decision-makers to better understand their use of targeted ads run through platforms such as Facebook, Google, Instagram, and YouTube. Members of the European Parliament have repeatedly proposed amendments to the Digital Services Act (DSA) that would ban targeted advertising. They have also sought alternative legislative paths to limit or prohibit targeted advertising, by amending the Digital Markets Act (DMA). 

The report’s key findings on the importance of targeted ads to small businesses and their benefits include:

  • 93% of EU SME leaders report that data-driven targeted ads are useful to running their business
  • 76% say they are valuable and important
  • 34% say they are critical 
  • “Behavioral” targeting of consumers including: 
    • 39% use them because they target customers in very specific ways 
    • 39% use them because they allow their business to expand beyond their immediate area
    • 36% use them because they allow targeting some products to some customers and different products to different customers 
  • 40% use targeted ads because they are cost-effective 
  • 34% believe they could not operate without targeted advertising
  • 24% say targeted ads are among the most important digital tools they use

“As a small business owner and business coach for women entrepreneurs, I know the value of targeted advertising,” said Joana Beldade from Portugal, founder of the Digital Women Academy. “For very little cost, targeted ads allow small businesses to choose who sees ads based on their likes, activities, or location. No other form of advertising has the same impact and return on investment.”

Methodology: 

This online survey of 1,380 decision-makers at small and medium-sized enterprises (SMEs) was conducted by Catalyst Research. The survey was fielded from Dec. 27, 2021 to Jan. 10, 2022, and has a margin of error of +/-2.6%.

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