Small business illuminated by digital ads during lockdown

Small Businesses, Big Tech: How Online Ads Became a Lifeline During Lockdowns

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Mira Elwood in Business & Economy December 2025 • 4 min read.

"Discover how small and midsize businesses leveraged digital advertising to navigate the COVID-19 pandemic and mitigate the impact of government lockdowns. "


The COVID-19 pandemic presented an existential threat to businesses worldwide, with small and midsize businesses (SMBs) bearing the brunt of the economic fallout. As demand plummeted, revenues declined, and liquidity dried up, many SMBs were forced to close their doors, leaving communities and economies reeling. However, amidst the chaos, a beacon of hope emerged: online advertising technology.

While the pandemic's adverse effects on SMBs have been well-documented, the role of online advertising in shaping these outcomes has remained largely unexplored. Existing research has primarily focused on the extent and moderators of business closures, overlooking the potential of digital advertising tools to help SMBs weather the storm.

Now, new research is shedding light on how online advertising technology helped mitigate the adverse consequences of government lockdowns for SMBs. By analyzing data from over 60,000 businesses in 49 countries, the study uncovers the significant role that digital advertising played in supporting SMB survival during these turbulent times.

Lockdowns and Closures: Understanding the Initial Impact

Small business illuminated by digital ads during lockdown

Government-imposed lockdowns, while necessary to curb the spread of the virus, had a devastating impact on SMBs around the world. The study confirms that these lockdowns led to a significant increase in business closures, exacerbating the economic hardship already faced by these vulnerable enterprises. An average increase in lockdowns in the first month of the pandemic was associated with an average decrease in survival probability of 8.3 percentage points across all countries sampled.

However, the story doesn't end there. The research reveals that online advertising acted as a crucial buffer, moderating the negative effects of lockdowns and improving SMBs' chances of survival. A one standard deviation increase in online advertising expenditures was associated with an average increase in survival probability of 2.8 percentage points across all countries. This suggests that SMBs that embraced digital advertising were better equipped to navigate the challenges of the pandemic.

The study's key findings highlight the power of online advertising during crises:
  • Online advertising attenuated the negative effects of government lockdowns on business survival.
  • SMBs in the services, transportation, and hospitality industries were the most severely affected by government lockdowns, but they also attained some of the greatest benefits from online advertising.
  • Small businesses, including microbusinesses with fewer than 10 employees, benefited greatly from online advertising.
  • SMBs in the agricultural, manufacturing, and construction industries and larger SMBs with 500 or more employees were the least affected by lockdowns but achieved the smallest gains from online advertising.
These findings suggest that advertising played an important role in supporting SMBs in navigating the hardships induced by the pandemic and related government measures. The power of online advertising lies in its ability to help companies reach tailored customer segments with personalized messages quickly and at scale. Personalized online advertising can enhance market-based intangible assets, including brand equity, by enhancing brand identification.

Looking Ahead: The Enduring Value of Digital Resilience

This research offers valuable insights for SMBs, policymakers, and advertising platforms alike. By demonstrating the critical role of online advertising in mitigating the adverse effects of crises, the study underscores the importance of investing in digital resilience and supporting SMBs' access to these vital tools. As businesses continue to navigate an uncertain future, the lessons learned from the COVID-19 pandemic will undoubtedly shape their strategies and investments in the years to come. The enduring value of online advertising as a lifeline for SMBs is now undeniable, paving the way for a more resilient and digitally empowered business ecosystem.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

Everything You Need To Know

1

How did government lockdowns impact small and midsize businesses (SMBs) during the COVID-19 pandemic?

Government-imposed lockdowns had a significant negative impact on small and midsize businesses (SMBs). Research indicates that lockdowns led to a noticeable increase in business closures. These closures exacerbated the economic difficulties that SMBs were already facing. The lockdowns were crucial in curbing the virus, but they also came with substantial economic hardships for these vulnerable enterprises.

2

What role did online advertising technology play in helping SMBs survive the economic challenges of the COVID-19 pandemic?

Online advertising technology acted as a crucial buffer during the pandemic. It helped mitigate the negative effects of government lockdowns, thereby improving SMBs' chances of survival. Increased spending on online advertising was associated with a higher survival probability. This suggests that SMBs that embraced digital advertising were better equipped to navigate the pandemic's challenges. Online advertising enabled these businesses to reach tailored customer segments with personalized messages efficiently.

3

Which industries benefited most from online advertising during the lockdowns?

The services, transportation, and hospitality industries were among the most severely affected by government lockdowns. However, these industries also saw some of the greatest benefits from online advertising. This suggests that online advertising helped these sectors adapt to the changing circumstances and maintain a connection with their customer base during challenging times. These industries were able to leverage the power of online advertising to survive.

4

How did online advertising help small businesses and microbusinesses, and why was it so effective?

Online advertising greatly benefited small businesses, including microbusinesses with fewer than 10 employees. The effectiveness of online advertising comes from its ability to help companies reach tailored customer segments with personalized messages quickly and at scale. This approach enhances market-based intangible assets, such as brand equity, by enhancing brand identification. Personalized online advertising enhances brand equity by improving brand recognition.

5

What are the implications of this research for the future of small businesses and their digital strategies?

This research emphasizes the importance of investing in digital resilience and supporting small and midsize businesses' (SMBs) access to digital tools like online advertising. The study underscores the critical role of online advertising in mitigating the adverse effects of crises. As businesses face ongoing uncertainty, the lessons from the COVID-19 pandemic will shape strategies and investments. The enduring value of online advertising as a lifeline for SMBs is now undeniable, paving the way for a more resilient and digitally empowered business ecosystem.

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