CPPA’s proposed regulations would hurt small businesses

OPINION – I’ve run a one-man home inspection business since 1992. I’d prefer a steep rooftop to a state regulatory-agency hearing any day of the week — but this past Wednesday, I spoke at a California Privacy Protection Agency (CPPA) meeting. The reason? I’m really worried about how the powerful but little-known agency’s proposed digital-technology regulations will impact my business.

Over the past 30 years, I’ve helped 15,000 families from 100 countries purchase homes in the Bay area. I’m a trained engineer and a licensed contractor. Every report I write exceeds national home-inspection industry standards, because I want to ensure my clients invest in safe, structurally sound homes.

My business is only relevant to the tiny segment of people actively considering buying Bay-area properties. I’d be wasting money if I advertised to the general public, so I use data-powered, automated ads — a.k.a. “targeted” ads — to reach people who’ve been searching online for things like mortgage or insurance services. It’s an efficient, cost-effective way to connect with the right audience. I even get metrics showing which ads get the most clicks so I can tweak or pull ineffective ads and get the best return on my investment.

I also do online marketing — through social media, Yelp, Google Search, and my Google Business Profile — that directs people to my website, which I’ve carefully designed to be as helpful as possible. In some cases, I can even make sure people land on the web page that provides exactly the information they need — say, whether I’m experienced with earthquake bolts. (I am.) I think of my website as my digital ambassador: It helps start important conversations with clients.

Here’s why I’m so worried. The CPPA wants to make California businesses install a variety of pop-up windows in front of their websites if the sites get more than 100,000 hits annually. The pop-ups will ask people if they want to opt out of data-collection and “automated” uses of data such as targeted ads.

The law’s 100,000 website-hits threshold punishes businesses that are growing and succeeding. My own website will soon hit the 100,000-hits mark — at which point the proposed regulations would force me to totally change my advertising and marketing strategy, and — according to the state’s financial analysis — undertake a $20,000 website redesign, then shoulder thousands of dollars in annual compliance costs for the next decade.

In addition, if people opt out of basic data uses — which many would do simply because pop-ups are so annoying — I won’t be able to advertise to the right audience. That would be disastrous for my business: Ninety percent of my customers find me online, thanks to data-powered automated tools that guide the right people to my website. Worse, even if people did learn about my business, they’d have to navigate multiple confusing pop-ups en route to my website, likely driving them away before they even visited.

If people don’t visit my website, I’ll go out of business. Obviously, that’s really bad for me. But it’s also really bad for potential home-buyers and -owners, who’ll lose an experienced local inspector working directly for them, not an insurer or real estate broker. And because California doesn’t require home inspectors to be licensed, many people may end up working with someone dangerously inexperienced who may not be covered by the new rules.

The proposed regulations may be well-intentioned, but they ignore data-powered and automated tools’ enormous benefits. Targeted ads help people find products and services they need — which is why people prefer receiving them over irrelevant ads. And data-powered and automated tools allow tiny businesses like mine to successfully compete against much bigger players.

California’s small businesses deserve rules that help us grow, compete, and succeed. I urge CPPA board members to consider stories like mine and strive to craft more thoughtful, balanced regulations that protect Californians’ data and keep its small businesses thriving.

Jeff Bond is a small business owner in the Bay Area. He founded Inspect.net.