Congress and Blue States want to regulate digital ads, and Georgia’s small businesses may pay the price

While I have been on a bit of a hiatus for a few months here on Peach Pundit, as there has certainly been nothing in the world of Georgia Republican politics to catch my interest (does the GRA even still exist?), I’ve been focusing some of my attention on issues affecting small businesses. A few weeks ago, I was invited to speak to the South Cobb Business Association on the impact of tariffs on small businesses. While the administration’s policies on tariffs and their effect on supply chains seem to change daily, another issue that could impose an undue economic burden on businesses comes with new regulations on something that has become commonplace on the digital landscape…sometimes to the annoyance of internet users…digital advertising.

Digital advertising is everywhere, from our social media apps to the ads surrounding this post. Still, for small businesses which continue to struggle as they work to re-establish a customer base in the wake of the COVID pandemic, years of high inflation, worker shortages, and now uncertainties in supply chains due to proposed tariffs, innovations in digital advertising have proven to be a calm port in the chaotic storms many small business owners have had to navigate through these past few years. The evolution of digital advertising and businesses’ ability to more effectively access its advantages have been one thing that has helped to keep small businesses afloat. In today’s competitive and frustrating environment, more small businesses are utilizing digital advertising as a cost-effective alternative to traditional marketing.

The results speak for themselves…on price per performance, digital advertising gives small businesses a tool to compete with large ones, especially as prices continue to increase on printing, paper, and production materials due to both inflation and changing trade policies.

A decade ago, advertising was a blunt process, whether for political candidates, retail businesses, restaurants, or service providers looking to connect to customers, the system was bogged down by middlemen and obtuse metrics. That’s not necessarily the case today. Now, small businesses can go live with an ad and receive real-time feedback on the ad’s performance. A business owner can even take it a step further and launch multiple digital ads as a way to test them against one another. Through anonymized personalization, anyone from a business owner to a political candidate can ensure their ads reach the people most interested in their products/services or are more likely to be a willing voter. 

However, with the ease of access to digital marketing has come increasing concerns about consumer privacy and AI-generated “deep-fakes”. This has led to a patchwork of state laws that are turning back the clock on small businesses utilizing the digital marketplace to compete.

Last month, the State of Washington implemented a new law imposing a retail sales tax on digital advertising. Curtis Costner, President of a digital advertising firm in Tacoma, WA, told GeekWire.com, “[The new tax] makes it harder for local businesses to work with other local businesses.”

Costner added that the tax could prompt his clients to seek out-of-state providers.

But, new tax laws like the one passed in Washington and another being fought in New York (Senate bill S.173) by advocacy groups are just a couple of ways states are building roadblocks for small businesses. Twenty states have different consumer data privacy laws that affect digital advertising, which could prove to be a regulatory barrier that only the largest corporations have the resources to manage against. To make things worse, last year, Congressional proposals would have made it more difficult for small businesses to compete by imposing more regulatory and legal barriers.

According to Internet for Growth’s Executive Director, Brendan Thomas, writing in Modern Marketing Today, “Unlike Fortune 500 companies, small businesses lack legal teams to navigate conflicting state privacy laws, with compliance costs often exceeding $50,000 annually—more than many spend on hiring. Similarly, large corporations can afford inefficiencies in advertising on traditional channels like print, broadcast, and radio, whereas smaller businesses cannot. 

Regulations highlight the risks of complexity. California’s CCPA imposed $55 billion in initial costs, disproportionately harming small firms. Similarly, the EU’s GDPR cost firms an average of $16 million each, benefiting Big Tech while driving smaller competitors out.”

The American Privacy Rights Act (APRA) was introduced by as introduced in April 2024 by Senator Maria Cantwell (D-WA) and Representative Cathy McMorris Rodgers (R-WA). While the legislation went nowhere thanks to GOP leadership, there have been rumblings about more legislation potentially coming through Congress. Of course, Congress could also work to offer a level playing field, helping to provide an end-around state action. Thomas highlights this, stating, “Congress must enact a national privacy framework that protects consumers while providing businesses of all sizes with clear, uniform rules. Without action, further fragmentation will only benefit the biggest companies while pushing smaller players out of the digital marketplace.”

Georgia has, for the most part, taken a hands-off approach to regulations on digital advertising, focusing mostly on concerns that AI-generated “deep-fakes” pose, whether used in ads or disseminated through other means. However, no legislation has made its way to the Governor’s desk yet.

For most small business owners, their job is to perfect their craft, sell their products, or provide their service, and marketing is just not a core part of their expertise. Digital advertising takes out the guesswork, the rigorous decades of expertise needed, and simplifies the process so small business owners can focus on what’s most important…their small business. 

Above all, digital advertising ensures equal conditions for small businesses who can now compete with larger corporations on the same level, reaching potential customers in their communities and beyond without the need for large budgets. Whether executed through social media, search engines, or email marketing, digital advertising enables businesses to increase growth, sales, and overall brand recognition while remaining a cost-efficient choice. 

For small businesses, digital advertising is no longer optional; it is essential for endurance and success. While Republicans have majorities in both chambers and the White House, Congress should do everything in its power to protect these important, cost-efficient, and globally effective tools to keep Georgia’s and America’s small businesses competitive.