Small business illuminated by digital ads during lockdown

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

"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.

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Limited Statistical Evidence

The listed sources do not provide statistics on small businesses, online advertising, or lockdown impacts. Instead, they are Microsoft Community pages addressing individual issues involving number formatting, WordPad document files, and a computer that turns on after shutdown. These pages therefore offer no reliable basis for measuring advertising adoption, business outcomes, or economic impact.

Evidence Limitations

A sound assessment of online advertising during lockdowns would normally compare campaign performance, audience reach, costs, and business outcomes. No sources were provided here that document such measures or establish an accepted method for evaluating them. Any conclusions about standard practice or limitations should therefore remain tentative.

Digital Platform Context

The supplied material points to Instagram as a major social platform but does not document its historical milestones or role in lockdown-era advertising. Hazal Subaşı's Instagram profile lists 2M followers, 1,596 following, and 375 posts, while Ingram Micro's profile lists 11K followers, 49 following, and 2,019 posts. Instagram's general page describes the service as a place to share interests with people who share them, but the sources do not establish when specific advertising developments occurred.

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.
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Research Not Supplied

No sources were supplied for current research or reviews of online advertising and small businesses. The available material therefore cannot substantiate recent findings, review conclusions, or measured trends. Any discussion of the latest research would require additional, directly relevant evidence.

Unverified Risks

No sources were supplied that identify failures or counterarguments concerning online advertising during lockdowns. It is reasonable to treat claims about effectiveness, affordability, or access as requiring verification rather than assume that digital advertising benefited every business. Specific shortcomings cannot be attributed to the listed evidence.

Fairness in Automated Decisions

The supplied sources compare automated credit scoring through the shared concerns of fairness, transparency, bias, and wider social consequences. Psyfint describes ethical credit scoring as both a regulatory requirement and a business imperative, while Diverse Daily frames AI bias as an ethical challenge beyond a purely technical problem. A separate source reports that a 2024 study found AI credit scoring could systematically exclude gig workers and people outside formal financial systems without corrective measures, suggesting that automated systems should be assessed for distributional effects as well as efficiency.

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.

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Cautious Synthesis

The supplied sources do not include expert commentary on small businesses, online advertising, or lockdowns. A careful synthesis would therefore distinguish documented platform capabilities from claims about economic outcomes. Stronger conclusions require sources that directly examine business experience and advertising performance.

Integrated Digital Workflows

The supplied Microsoft material suggests a future in which productivity, support, identity, and AI services are increasingly connected. Microsoft Support documents shared calendars in Outlook, while the Microsoft Copilot Blog describes a LegalZoom agent working inside Microsoft 365 Copilot so users can complete a legal task without leaving their workflow. Microsoft also describes monitoring unusual Hotmail sign-in activity and may request identity confirmation when a user changes location or device, highlighting security as part of this connected experience.

Systemic Questions

No sources were supplied that directly analyze the broader systemic challenges surrounding online advertising and small businesses during lockdowns. Relevant analysis would need to consider access to technology, unequal resources, privacy, platform dependence, and changing consumer behavior. These issues should be treated as questions for further research rather than as conclusions supported by the listed material.

Everyday Digital Access

Microsoft is described as an American multinational technology company headquartered in Redmond, Washington, whose products have expanded from Windows into cloud computing, artificial intelligence, gaming, and other services. Microsoft's product pages present Microsoft 365, Copilot, Teams, Xbox, Windows, Azure, and Surface as services for home and business users, while Microsoft 365 combines productivity tools, cloud services, security, and AI. Microsoft also provides free online versions of Outlook, Word, Excel, and PowerPoint through Microsoft accounts, illustrating how digital tools can support everyday work, although these sources do not measure their real-world impact on small businesses during lockdowns.

About this Article -

Written with AI assistance from published research, and reviewed by the Mystum team. 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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