Economic Consequences of Online Tracking Restrictions: Evidence from Cookies

84 Pages Posted: 10 Oct 2017 Last revised: 18 Jul 2023

Date Written: July 18, 2023

Abstract

Over the past few years, regulators have begun to consider restricting a cookie’s lifetime as a way to protect consumer privacy. Most of this debate has taken place in the absence of any quantified cost-benefit analysis. To begin to fill this gap on the cost side of this discourse, we es-timate the potential upper-bound of an economic loss for digital publishers of lifespan restrictions on cookies. Our analysis is based on an empirical study on cookies of 54,127 users who received about 130 million ad impressions over 2.4 years. The average lifetime of their cookies is 278 days (median 68 days) and its average value is €1.49 (median €.01). Only 21% of all cookies increase their daily value over time but their average value is almost three-times larger than the average value of all cookies. Restricting their lifetime to one year as the European Union proposes (two years as Google advocates) decreases their cookie lifetime value by 14.1% (6.8%), which repre-sents a decrease in the value of all cookies of about 1.7% (.6%). In light of the €10.6 Bn. cookie-based display ad revenue in Europe, such restrictions would endanger each year €180 Mio. (€64 Mio.) or €.41 (€.15) per European Union Internet user.

Keywords: Cookie; Privacy; Online Advertising; Real-time Bidding; Value of Information; Consumer Protection

JEL Classification: M37, L50

Suggested Citation

Miller, Klaus and Skiera, Bernd, Economic Consequences of Online Tracking Restrictions: Evidence from Cookies (July 18, 2023). NET Institute Working Paper No. 17-02, Available at SSRN: https://ssrn.com/abstract=3046254 or http://dx.doi.org/10.2139/ssrn.3046254

Klaus Miller (Contact Author)

HEC Paris ( email )

Paris
France

Bernd Skiera

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 4
Frankfurt, 60323
Germany
+49 69 798 34640 (Phone)
+49 69 798 35001 (Fax)

HOME PAGE: http://www.skiera.de

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
200
Abstract Views
2,664
Rank
280,858
PlumX Metrics