This article addresses the lack of comprehensive cost-benefit analysis in the ongoing debates about restricting online tracking to protect consumer privacy. The focus is on estimating the economic consequences of lifetime restrictions on cookies for publishers. The study analyzes data from a large European ad exchange, covering approximately 128 million ad impressions over 2.5 years from 54,127 users. The average cookie lifetime is found to be 279 days, with an average value of EUR 2.52 per cookie. It is observed that only 13% of cookies increase their daily value over time, but their average value is four times larger than the average value of all cookies. The article explores three potential cookie lifetime restriction regimes: short (30 days), medium (360 days), and long (720 days). These restrictions could be implemented by setting the expiration date for each cookie, aligning with the right to be forgotten principle outlined in Europe's GDPR. Implementing a one-year or two-year restriction would decrease the lifetime value of cookies by 25% or 19%, respectively, resulting in a decrease in the overall value of all cookies by 9% or 5%. Considering Europe's EUR 10.60 billion cookie-based display ad revenue, these restrictions would endanger EUR 904 million or EUR 576 million annually, equivalent to EUR 2.08 or EUR 1.33 per EU internet user. The article also provides insights into marketing strategy challenges and opportunities for advertisers and publishers based on these results. The data used in this study are sourced from a programmatic marketplace for online display, mobile, and video advertising, representing around 84% of its relevant market's monthly internet users. The data include anonymized desktop and mobile browsing traffic and cover a wide range of auctions conducted over ~2.5 years. To analyze the economic consequences of cookie lifetime restrictions for publishers, a random sample of cookies/users was drawn from the real-time bidding (RTB) data set which represents 1% of unique cookies on a randomly selected day allowing for a representative analysis of cookies used by users accessing the internet at different times during the day. The study is the first to exploit longitudinal auction data over ~2.5 years to determine the value of cookies and assess the impact of cookie lifetime restrictions providing valuable insights into potential economic implications for publishers as well as shedding light on importance considering both costs and benefits when discussing regulatory aspects related to online tracking and consumer privacy protection .
Summary- The study looked at how long cookies (pieces of information stored on computers) last and how much they are worth.
- It found that most cookies don't increase in value over time, but some do and they are worth more than the average cookie.
- The study also explored different rules for how long cookies should last, like 30 days or 720 days.
- If the rules were changed to make cookies last shorter or longer, it would decrease their value and overall value of all cookies.
- This could be a problem for advertisers and publishers who use cookies to target ads.
Definitions
- Comprehensive cost-benefit analysis: A careful study that looks at all the costs and benefits of something
- Online tracking: Keeping track of what people do online
- Consumer privacy: Protecting people's personal information when they use the internet
- Cookies: Pieces of information stored on computers that help websites remember things about users
- Publishers: People or companies who create and distribute content, like articles or videos
Cookie Lifetime Restrictions: A Cost-Benefit Analysis
The ongoing debates about restricting online tracking to protect consumer privacy have largely overlooked the economic consequences of such restrictions. This article seeks to address this gap by providing a comprehensive cost-benefit analysis of lifetime restrictions on cookies for publishers. To do so, the study uses data from a large European ad exchange covering approximately 128 million ad impressions over 2.5 years from 54,127 users. The results provide valuable insights into potential economic implications for publishers as well as shedding light on importance considering both costs and benefits when discussing regulatory aspects related to online tracking and consumer privacy protection.
Background
The data used in this study are sourced from a programmatic marketplace for online display, mobile, and video advertising representing around 84% of its relevant market's monthly internet users. The data include anonymized desktop and mobile browsing traffic and cover a wide range of auctions conducted over ~2.5 years.
Analysis
To analyze the economic consequences of cookie lifetime restrictions for publishers, a random sample of cookies/users was drawn from the real-time bidding (RTB) data set which represents 1% of unique cookies on a randomly selected day allowing for a representative analysis of cookies used by users accessing the internet at different times during the day. The average cookie lifetime is found to be 279 days with an average value per cookie estimated at EUR 2.52 . It is observed that only 13% of cookies increase their daily value over time but their average value is four times larger than the average value of all cookies indicating that these long-term “sticky” cookies are more valuable than short-term ones .
Three potential cookie lifetime restriction regimes were explored: short (30 days), medium (360 days), and long (720 days). These restrictions could be implemented by setting the expiration date for each cookie aligning with Europe's GDPR right to be forgotten principle . Implementing a one-year or two-year restriction would decrease the lifetime value of cookies by 25% or 19%, respectively resulting in an overall decrease in all cookie values by 9% or 5%. Considering Europe's EUR 10.60 billion cookie-based display ad revenue , these restrictions would endanger EUR 904 million or EUR 576 million annually equivalent to EUR 2.08 or EUR 1.33 per EU internet user .
Implications
This study is first to exploit longitudinal auction data over ~2.5 years to determine the value of cookies and assess impact on them due to implementing various lifetimes restriction regimes providing useful information not only about potential economic implications but also marketing strategy challenges faced by advertisers and publishers alike based on these results . While it has been widely accepted that restricting online tracking can help protect consumer privacy , this research provides evidence that there may be significant financial losses associated with such measures if they are not carefully considered regarding both costs and benefits before implementation .
In recent years, European regulators have debated restricting the time an online tracker can track a user to protect consumer privacy better. Despite the significance of these debates, there has been a noticeable absence of any comprehensive cost-benefit analysis. This article fills this gap on the cost side by suggesting an approach to estimate the economic consequences of lifetime restrictions on cookies for publishers. The empirical study on cookies of 54,127 users who received 128 million ad impressions over 2.5 years yields an average cookie lifetime of 279 days, with an average value of EUR 2.52 per cookie. Only 13% of all cookies increase their daily value over time, but their average value is about four times larger than the average value of all cookies. Restricting cookies lifetime to one year (two years) decreases their lifetime value by 25% (19%), which represents a decrease in the value of all cookies of 9% (5%). In light of the EUR 10.60 billion cookie-based display ad revenue in Europe, such restrictions would endanger EUR 904 million (EUR 576 million) annually, equivalent to EUR 2.08 (EUR 1.33) per EU internet user. The article discusses these results' marketing strategy challenges and opportunities for advertisers and publishers.
