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Can Privacy Technologies Replace Cookies? Ad Revenue in a Field Experiment

Author

Listed:
  • Zhengrong Gu
  • Garrett A. Johnson
  • Shunto J. Kobayashi

Abstract

As regulators seek to balance user privacy with publisher sustainability, Google's Privacy Sandbox offers a potential replacement for third-party cookies. This paper presents the first independent estimates of the publisher-side economic effects of Privacy Sandbox, a suite of privacy-enhancing technologies for online advertising. Leveraging an open, industry-wide field experiment, we partner with a major ad management firm to evaluate over 200 million ad impressions across more than 5,000 publishers. We find that removing third-party cookies reduces publisher revenue by 29.1%, while Privacy Sandbox preserves just 4.2% of this lost revenue. We further document that Privacy Sandbox increases ad latency and reduces impression delivery by 2.9%. The results underscore the continued economic tension between privacy and the funding of online content.

Suggested Citation

  • Zhengrong Gu & Garrett A. Johnson & Shunto J. Kobayashi, 2025. "Can Privacy Technologies Replace Cookies? Ad Revenue in a Field Experiment," CESifo Working Paper Series 11931, CESifo.
    • Handle: RePEc:ces:ceswps:_11931
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    More about this item

    Keywords

    privacy; online advertising; privacy-enhancing technologies; online content;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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