[Busec] practice talk: Do-Not-Track and the Economics of Third-Party Advertising (Tues 3pm)

Sharon Goldberg goldbe at cs.bu.edu
Mon Dec 15 12:23:15 EST 2014


Some of you may be interested in this practice talk on privacy and online
advertising.

---------- Forwarded message ----------
From: Zervas, Giorgos <zg at bu.edu>
Date: Mon, Dec 15, 2014 at 11:40 AM

    *Title:* Do-Not-Track and the Economics of Third-Party Advertising
*Speaker:* Georgios Zervas, Marketing Department,  Boston University
Room MCS 241
Tuesday December 16 @ 3pm

*Abstract:*

Retailers regularly target users with online ads based on their web
browsing activity, benefiting both the retailers, who can better reach
potential customers, and content providers, who can increase ad revenue by
displaying more effective ads. The effectiveness of such ads relies on
third-party brokers that maintain detailed user information, prompting
legislation such as do-not-track that would limit or ban the practice. We
gauge the economic costs of such privacy policies by analyzing the
anonymized web browsing histories of 14 million individuals. We find that
only 3% of retail sessions are currently initiated by ads capable of
incorporating third-party information, a number that holds across market
segments, for online-only retailers, and under permissive click-attribution
assumptions. Third-party capable advertising is shown by 12% of content
providers, accounting for 32% of their page views; this reliance is
concentrated in online publishing (e.g., news outlets) where the rate is
91%. We estimate that most of the top 10,000 content providers could
generate comparable revenue by switching to a “freemium” model, in which
loyal site visitors are charged $2 (or less) per month. We conclude that
do-not-track legislation would impact, but not fundamentally fracture, the
Internet economy.

Available at:  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2505643
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