Work

Social Media Advertising's Role in Small Business Resilience Amid Lockdowns

Year: 2025

Type: article

Abstract: Research has investigated the impact of the COVID-19 pandemic on business performance and survival, indicating particularly adverse effects for small and midsize businesses (SMBs). Yet only limited work has examined whether and how advertising may have helped shape these outcomes, particularly for SMBs. By constructing and analyzing a novel dataset of more than 79,000 businesses across 49 countries, the authors explore this question and examine the impact of pandemic-induced government stay-at-home orders on business survival. Using staggered difference-in-differences estimators, this research produces directional evidence that government lockdowns increased the likelihood of SMB closure and that social media advertising attenuated this adverse effect. These results are robust across different model specifications and measures of advertising activities. The findings additionally show heterogeneity across business sizes and industries, enriching the understanding of business survival during severe demand crises from a global perspective. The current research suggests that advertising may play an important role in building SMB resilience in light of severe demand shocks and mobility restrictions.

Source: Journal of Interactive Marketing

DOI: 10.1177/10949968251336683

Authors: Shun-Yang Lee, Julian Runge, Daniel Yoo, Yakov Bart, Anett Gyurak, J.W. Schneider

Institutions: Northeastern University, Northwestern University, Meta (United States)

Language: English

Topic: SMEs Development and Digital Marketing

Subfield: Demography

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $5,400