Survey of Minnesota small- and mid-sized business leaders finds digital and social media advertising helps SMBs compete, reach customers, and grow.
[St. Paul, Minn.] — As Minnesota legislators consider proposals that would tax social media advertising and digital advertising services, a new report from the Minnesota Technology Association (MnTech) finds that Minnesota small- and medium-sized businesses (SMBs) rely on these tools to compete, grow, and reach customers. MnTech warns that new taxes on digital and social media advertising could increase costs for SMBs and make it harder for them to find customers, sell products, and expand in a challenging economy.
Key findings: Digital advertising fuels Minnesota SMB success
- 81% of Minnesota SMB leaders use digital advertising.
- Among Minnesota SMB advertisers:
- 81% say digital ads are important to their company’s success.
- 86% say digital ads help them reach new customers.
- 82% say digital ads help them compete with larger companies.
- 81% say digital ads deliver a better return on investment compared to traditional/offline ads (e.g., TV, radio, newspapers).
Key findings: Social media platforms are a primary channel for Minnesota small businesses
- Among Minnesota SMBs that pay for digital ads:
- 65% use Facebook
- 55% use YouTube
- 37% use Instagram
- 37% use TikTok
Key findings: Online advertising platforms help SMBs execute and manage advertising
- 79% of small business advertisers rely on digital ad platforms to connect with publishers and place ads.
- 71% of small business advertisers rely on platforms to manage and negotiate ad placements.
Key findings: Higher costs would hit small businesses during economic uncertainty
- Almost half (47%) of Minnesota SMB leaders rate the US economy as “not good.”
- 64% say inflation and economic uncertainty are making it harder to successfully run their business.
- 77% say digital tools are important to navigating inflation and economic uncertainty.
MnTech encourages policymakers to consider the downstream impact of new advertising taxes on Minnesota entrepreneurs and the communities they serve.
About MnTech
MnTech (Minnesota Technology Association) is a statewide, membership-driven organization that champions Minnesota’s technology ecosystem through advocacy, community building, and talent initiatives. Learn more at mntech.org.
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Methodology:
The Minnesota Technology Association curated research completed Minnesota based research conducted by RXN. The survey polled 108 Minnesota-based small- and mid-sized business (SMB; <500 full-time equivalent (FTE) employees) leaders who sell products or services to businesses and/or consumers. The survey was conducted from November 7-December 17, 2025, and has a margin of error of +/- 9.4%. Every person surveyed is an SMB leader who is involved in making decisions that affect their entire business.
