318. IJRM. Economic Consequences of Online Tracking Restrictions.
June 6, 2024
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In today's digital world, concerns about consumer privacy are growing. Regulators are thinking about limiting how long tracking technology can be used. It is important to understand the economic effects of these possible changes. Today’s guest is Klaus Miller, an Assistant Professor of Marketing at HEC Paris. He talks about the research he and his colleague did on this topic, which was recently published in the International Journal of Research in Marketing (IJRM). He explains how tracking works, the economic impact of different rules, and what the future of online advertising might look like.
Highlights from the interview include:
The History & Mechanics of Online Tracking: Tracking was designed to give the web a memory, enabling features like shopping carts and personalized content. Tracking works by generating a unique identifier for each user and recording their behavior on websites or apps.
Types of Tracking: Stateless tracking identifies users based on their device's unique configuration without storing information on the device, whereas stateful tracking stores information on the user's device, such as cookies, which helps in identifying users during future visits.
Economic Consequences of Tracking Restrictions: Shorter tracking lifetimes protect user privacy better but can lead to higher economic losses for advertisers and publishers.
Value of Cookies Over Time: The average cookie lives about nine months and generates around €2.52 per EU internet user. Some cookies increase in value over time, while others decrease, often depending on the user's behavior and interests. The potential economic losses related to a 30-day cookie lifetime restriction was estimated to be about €3.40 per EU internet user, whereas a two-year restriction was projected to result in a comparatively lower loss of around €1.30 per EU internet user.
Click here for the research.
The Up Next podcast’s access to this content is courtesy of the International Journal of Research in Marketing, an international, double-blind peer-reviewed journal for marketing academics and practitioners. IJRM aims to contribute to the marketing discipline by providing high-quality, original research which advances marketing knowledge and techniques. As marketers increasingly draw on diverse and sophisticated methods, IJRM‘s target audience is comprised of marketing scholars, practitioners (e.g., marketing research and consulting professionals) and policymakers.
IJRM aims to be at the forefront of the marketing field with a particular emphasis on bringing timely ideas to market. The journal embraces innovative research with the potential to spur future research and influence practice. Hence, it welcomes contributions in various aspects of marketing. The editors, while accepting a wide array of scholarly contributions from different disciplinary approaches, especially encourage research that is novel, visionary or path breaking.
Guest & Corresponding Author
Klaus M. Miller is an Assistant Professor in the Marketing Department at HEC Paris and a Chairholder at the Hi! PARIS Center on Data Analytics and Artificial Intelligence for Science, Business, and Society. His research interests meet at the interface between empirical quantitative marketing, management economics, and information systems—specifically, his research concerns advertising and privacy issues in the digital economy. During his Ph.D. and afterward, he was a frequent visiting scholar at the Wharton School of the University of Pennsylvania and the Graduate School of Business at Stanford University. Klaus’s research is currently under review or published in top-tier academic journals such as the American Economic Review, the Journal of Marketing Research, Information Systems Research, and the International Journal of Research in Marketing. He often collaborates with the industry in his research projects to answer research questions at scale.
Co-Author
Bernd Skiera is a Chaired Professor of Electronic Commerce at Goethe University Frankfurt (Germany). He received an ERC Advanced Grant to research the economic consequences of more consumer privacy on the Internet. He is a Fellow of the European Marketing Academy (EMAC) and his publications appeared in journals such as Management Science, Marketing Science, Journal of Marketing Research, and Journal of Marketing.
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International Journal of Research in Marketing
Klaus Miller
Bernd Skiera