VIDEO: Do-Not-Track and the Economics of Third Party Advertising @justinmrao @PrincetonCITP #DoNotTrack

On September 16 2016 the Princeton CITP presented Microsoft researcher Jason Rao speaking on Do-Not-Track and the Economics of Third Party Advertising. He presented the results of a recent white paper on the topic, summarized as:

Retailers regularly show users online ads based on their web browsing activity, benefiting both the retailers, who can better reach potential customers, and providers of web content, who can better monetize their traffic. Many such ads rely on third-party information brokers that maintain detailed personal information, prompting legislation such as do-not-track that would limit or ban the practice. We gauge the potential economic costs of such privacy policies by analyzing anonymized web browsing histories of 14 million individuals. With respect to advertisers, we find that about 3% of retail sessions are initiated by third-party capable advertising, this magnitude holds across market segments and for online-only retailers. For content providers, 32% of aggregate traffic comes from websites that display third-party advertising and this traffic is concentrated in online publishers (e.g., news outlets). For these sites, we use existing estimates of the returns to advertising and the impact of paywalls. Most sites in the top 10,000 could generate comparable revenue by switching to a “freemium” model in which loyal site visitors are charged about $2 a month (the typical user frequents 2-3 of these sites), but outside the 10,000, this is typically not possible because they do not receive enough “loyal traffic.”

Video is below (skipping the intro):

View on YouTube:
Transcribe on AMARA:
White paper:
Twitter: #DoNotTrack