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Economic Damage of Cookie Lifetime Restrictions

Author

Listed:
  • Klaus M. Miller

    (Goethe University Frankfurt, Marketing Department, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt am Main, Germany)

  • Bernd Skiera

    (Goethe University Frankfurt, Marketing Department, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt am Main, Germany)

Abstract

Over the past few years, regulators have begun to consider restricting a cookie’s lifetime or even banning cookies altogether 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 in the discourse, we estimate the potential economic damage 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 2.5 years. Only 22% of all cookies increase their daily value over time but the value of that quantile represent 61% of the value of all cookies. This analysis suggests that restricting their lifetime to one year as the European Union proposes (two years as Google advocates) decreases cookie lifetime value by 14.8% (5.9%), which represents a decrease in the value of all cookies of about 7.4% (1.3%). Overall, we find that the average lifetime of a cookie is 215 days (median 68 days) and the average value of a cookie is €1.43 (median €.02).

Suggested Citation

  • Klaus M. Miller & Bernd Skiera, 2017. "Economic Damage of Cookie Lifetime Restrictions," Working Papers 17-02, NET Institute.
    • Handle: RePEc:net:wpaper:1702
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    File URL: http://www.netinst.org/Miller_17-02.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Garrett A. Johnson & Scott K. Shriver & Shaoyin Du, 2020. "Consumer Privacy Choice in Online Advertising: Who Opts Out and at What Cost to Industry?," Marketing Science, INFORMS, vol. 39(1), pages 33-51, January.
    2. Ana Reyes-Menendez & José Ramón Saura & Cesar Alvarez-Alonso, 2018. "Understanding #WorldEnvironmentDay User Opinions in Twitter: A Topic-Based Sentiment Analysis Approach," IJERPH, MDPI, vol. 15(11), pages 1-18, November.
    3. Jörg Claussen & Christian Peukert & Ananya Sen, 2019. "The Editor vs. the Algorithm: Returns to Data and Externalities in Online News," CESifo Working Paper Series 8012, CESifo.
    4. Nico Neumann & Catherine E. Tucker & Kumar Subramanyam & John Marshall, 2023. "Is first- or third-party audience data more effective for reaching the ‘right’ customers? The case of IT decision-makers," Quantitative Marketing and Economics (QME), Springer, vol. 21(4), pages 519-571, December.
    5. Tesary Lin & Sanjog Misra, 2020. "The Identity Fragmentation Bias," Papers 2008.12849, arXiv.org, revised Feb 2021.

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    More about this item

    Keywords

    Cookie; Privacy; Online Advertising; Real-time Bidding; Value of Information; Consumer Protection;
    All these keywords.

    JEL classification:

    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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