In one of the first empirical studies looking at behavioral ads–that is, online ads that rely on cookies to track users around the web in order to learn more about them–researchers found that the ads are virtually worthless to publishers, reports the Wall Street Journal.
For the study, researchers at the University of Minnesota; University of California, Irvine; and Carnegie Mellon University tracked millions of ad transactions at “a large U.S. media company” over the course of a week. What those researchers found is that cookie-enabled ads only ended up bringing in 4% more revenue for publishers than ads shown to users that didn’t rely on cooking-tracking technologies.
The finding is significant because for years cookie-based ads have been extolled as major revenue drivers for publishers by those in the online ad industry. If the study is correct, then that’s not actually the case at all and it could have major ramifications for online privacy. If publishers aren’t benefitting much more from cookie-based behavioral ads than from non-cookie-based ads, there would be little room for argument that the privacy-killing, intrusive ad technology is a fair trade-off for using a free internet. As Ashkan Soltani, one of the authors of the California Consumer Privacy Act, told the WSJ:
It is a huge finding in terms of the policy debate. All of these externalities with regard to the ad economy—the harm to privacy, the expansion of government surveillance, the ability to microtarget and drive divisive content—were often justified to industry because of this ‘huge’ value to publishers.
And if that’s now not the case, lawmakers may feel more emboldened to pass stricter privacy laws preventing companies from tracking users around the web knowing that publishers’ revenues won’t suffer much if cookie-based ads are restricted.