Marketing 3 min read

New Study Suggests Cookies Increase Ad Revenue For Publishers

faithie /

faithie /

A recent study explored the real value of cookies and concluded that it increases ad revenue for publishers.

The term “cookie” is part of your daily web experience.

You may have come across it the last time you visited a website. It could be a pop-up telling you that although “cookies” will enhance your experience on the site, you could opt-out if you wanted.

Cookies represent data packets that are sent to your computer to help a website track your activities, including visits. It goes by other names such as computer cookie, internet cookie, web cookie, or browser cookie.

Whatever name you choose to call it, the function is the same. It allows websites to create a more personalized user experience. That way, visitors can see the most relevant content.

For advertisers, cookies are useful for retargeting campaigns.

Aside from tracking web users who visited their site, they’ll still have access to these potential customers even after they exit the website, That means publishers can serve their ads to these potential customers on other sites as well.

But what’s the real value of the cookie to websites and advertisers? That was the question that a recent paper published in INFORMS journal Marketing Science sought to answer.

How Cookies Increase Ad Revenue for Online Publishers

According to the study authors, most Americans rarely opt-out of online advertising. However, 0.23 percent of American online ad impression comes from those who decide to opt-out.

These are the users who do not allow cookies to track their web experience, and they were the focus of the study. The researchers wanted to determine the impact of cookie removal on web experiences.

The study discovered that cookies represent higher revenue for online publishers.

In a statement, researcher at Questrom School of Business at Boston University and author of the study, Garrett Johnson said:

“One of our more important findings was that opt-out user ads tend to fetch 52 percent less revenue on the transaction than do comparable ads for users who allow behavior targeting, or opt-in.”

Other authors include Scott Shriver of the Leeds School of Business at the University of Colorado and Shaoyin Du of the Simon Business School at the University of Rochester.

The researchers noted that the inability to behaviorally target opt-out users results in about $8.58 loss in ad spending per opt-out consumer. Publishers and the AdChoices exchange are responsible for covering the cost.

Aside from showing how cookies increase ad revenue for publishers, the study uncovered a privacy paradox.

Several surveys suggest that 66 percent of American consumers are against online behavioral advertising. What’s more, 20 percent of respondents claim to have opted out of using AdChoices.

However, the study suggests that opt-out rates are significantly lower than the previous studies suggested.

We find that opt-out rates are higher among users who install non-default browsers, such as Firefox and Chrome,” says Du. “This tells us that opt-out users are likely more technologically.”

Read More: 5 Dark Web Browsers you can use to Remain Anonymous Online

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