Personalized advertising fuels growth and drives competitiveness for European businesses
In almost every conversation I have with customers today, I'm asked the same question: “how can I grow my business in this moment of incredible innovation and possibility?”. It’s a topic that preoccupies the minds of leaders —- from multinational CEOs and to founders of small, local businesses alike. Similarly, powering growth and competitiveness is also top of the agenda for the European Commission (EC) and national governments across the European Union (EU) in 2025. As the backbone of Europe’s economy, we should be doing all we can to empower small businesses who are an essential driver of productivity and prosperity overall.
A new report by the Centre for Information Policy Leadership (CIPL) based on research by Public First, commissioned by Google1, highlights the critical role personalized digital advertising plays in driving economic growth and competitiveness, especially for small and medium-sized businesses (SMBs).
This survey of 4,287 EU SMBs across 13 countries found that 86% attributed revenue growth directly to personalized digital advertising.
Helping small businesses compete
SMBs rely on personalized ads to reach specific audiences, expand into new markets and compete effectively. For many, this is the only way to reach their customer base. More than three quarters (76%) of EU SMBs agree that personalized ads enable them to compete with larger businesses while 73% said it would be impossible or difficult to find the customers their business needs without personalized advertising.
Berlin-based Raus has been helping city dwellers embrace the great outdoors with boutique cabins since 2001. Using Google's AI-powered campaigns, Raus was able to reach potential new guests with minimal effort and a limited budget. In fact for every euro invested, they generated 40 euros.
Supporting publishers
Personalized advertising also helps to keep content freely accessible to users, supporting publishers of all sizes who sell ad space on their own websites. Almost half (46%) of EU publishers surveyed said that personalized ads help their business by enabling them to earn more revenue, compete with larger publishers (35%) and hire more people (33%).
Both the Draghi report and the EC’s Competitiveness Compass warn that regulatory barriers are a key factor in Europe’s slowing economic growth stifling small businesses’ ability to grow and innovate. Regulations that limit responsible data use — and being able to learn from ad measurement — will weaken competitiveness making it harder for companies to sell goods and improve.
Unintended consequences
This is reflected in CIPL’s report where respondents outlined the potential negative impact on their businesses. Almost half (47%) of EU SMBs anticipated they would increase prices and 21% feared they would even reduce staff to compensate for increased costs and lost revenue. Users would lose out too: more than half (56%) of EU publishers surveyed would add a paywall or move to a subscription model, and 74% would increase the number of ads on their content.
The sustainable growth of small and medium businesses is critical to Europe's future economic success, and we must pay attention to their perspectives.
Responsible AI and data-driven advancements in advertising can accelerate Europe’s economic growth. 82% of EU publishers anticipate that AI-driven personalized ads will have a positive influence on their company’s competitiveness within five years, while 76% of EU SMBs surveyed are already using AI for digital ads. That's why Google is helping businesses learn to use AI: through the AI Opportunity Fund 80 organisations will train 20,000 people across 24 European countries in a range of industries.
Europe already has the strongest consumer and advertising protection standards in the world, but further regulation could stifle innovation and harm businesses large and small who use personalized advertising to find customers. Consumers deserve protection online and we provide transparency and clear choices to people, while investing in privacy enhancing technology that enables businesses to find the right audiences. We know that people prefer relevant ads, and, done right, personalized ads help people discover new products or services.
