Have I Seen you Before? Measuring the Value of Tracking for Digital Advertising

Abstract

Privacy regulation aiming to reduce the ability of ad platforms to aggregate user data can decrease the quality of ad display and thus challenge data-driven business models. We investigate the effect of privacy protection rules on the market for ads. We leverage a change in Apple's privacy policy, the App Tracking Transparency, to compare ad campaigns targeting iOS users versus Android users. To assess the effect of the policy, we use an original database of estimated ad outcomes on a social network in the US market. The results suggest a relative reduction in targeting efficiency and ad prices.

Keywords: economics of privacy, advertising, App Tracking Transparency

JEL Classification: L5, L83, M37