Economic Loss of Cookie Lifetime Restrictions

Posted: 10 Oct 2017 Last revised: 26 Nov 2018

See all articles by Klaus M. Miller

Klaus M. Miller

Goethe University Frankfurt

Bernd Skiera

University of Frankfurt - Department of Marketing

Date Written: September 30, 2017

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

Suggested Citation

Miller, Klaus and Skiera, Bernd, Economic Loss of Cookie Lifetime Restrictions (September 30, 2017). 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)

Goethe University Frankfurt ( email )

Frankfurt
Germany
+49(0)69-798-33865 (Phone)
+49(0-69-798-35001 (Fax)

HOME PAGE: http://www.marketing.uni-frankfurt.de/en/professoren/miller/prof-dr-klaus-miller.html

Bernd Skiera

University of Frankfurt - Department of Marketing ( email )

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

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

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