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In 2020, I started a digital marketing firm in Kearney. Over the past six years, I’ve helped nearly 50 small Nebraska businesses grow and compete using data-powered digital ads and marketing.
Unfortunately, a proposed bill, Legislative Bill 1025, is likely to drive up the cost of data-powered social media advertisements — making it harder for Nebraska small businesses to reach the right customers, succeed and serve their communities.
LB 1025 would tax social media companies based on the number of Nebraska users whose data they collect. But social media companies will simply pass the cost of this tax along to the small businesses that advertise on their platforms — meaning the tax would, in practice, largely be paid by small Nebraska businesses.
Those businesses are already struggling with rising costs and economic uncertainty. A new advertising tax is the last thing they need right now. Moreover, data-powered social media ads are some of the most affordable and effective forms of advertising available. They’re particularly important here in Nebraska, where — in order to succeed — small businesses often have to attract customers from multiple cities and towns.
A business in Kearney, for instance, typically has to reach customers in Lexington, Hastings, Grand Island, North Platte, and Minden. These small businesses can’t afford to run newspaper, TV, or radio ads in all those towns. But by using data-powered ads, often on platforms like Facebook or TikTok, they can affordably connect with people who are likely to be interested in their products and services.
That precision advertising is critical to their success — allowing them to make the most sales with the fewest ad dollars, and boosting their bottom line. Using smart, regional digital marketing campaigns, I’ve helped small businesses ranging from roofing companies to clothing boutiques dramatically increase their revenue by attracting customers from up to 90 miles away.
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While proceeds from the new tax are intended to fund juvenile mental health initiatives — a cause I wholeheartedly support — I worry that LB 1025’s negative impact on local businesses may hurt existing, critically important community-based resources for kids. Small businesses are the heartbeat of Nebraska’s communities — providing jobs and mentoring opportunities, supporting kids’ organizations and sports teams, keeping local economies strong and, critically, boosting the tax base that funds schools and programs that are vital to kids’ well-being. When Nebraska’s small businesses struggle, so do its communities and kids.
LB 1025 contains two additional, serious weaknesses. First, although its sponsors’ core concern is social media’s impact on kids, the bill does nothing to prevent kids from accessing social media. Second, although LB 1025 seeks to penalize social media companies for collecting consumer data, the bill, if passed, would force the companies to collect significantly more personally identifiable information than they currently do.
That’s because the companies would have to prove users’ — including minors’ — place of residence to regulators, requiring them to access sensitive documentation such as driver’s licenses. Worse, collecting all that sensitive data would create serious new privacy and security risks.
I understand lawmakers’ concerns about social media, and I share their desire for accessible juvenile mental health resources. But those are issues that should be addressed and funded directly. Taxing data-powered digital ads won’t keep kids away from social media. But it will make advertising more expensive — hurting Nebraska small businesses and the communities, families and kids they serve. Lawmakers should rethink LB 1025 and amplify policies that empower Nebraska’s small businesses — and ensure its young people thrive.
Quinten Saathoff is the founder of Kearney-based digital marketing firm Caspian Creates.
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