Privacy Regulation and Online Advertising

Goldfarb, Avi; Tucker, Catherine

doi:10.2139/ssrn.1600259

Cited by 95 publications

(105 citation statements)

References 31 publications

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“…Instead, by giving consumers explicit control over how their data is being used and therefore potentially increasing information about the data collection process firms may be able to alleviate some of the tradeoff between how informative their advertising can be and how intrusive consumers find it. This tradeoff has now been shown to be real and substantial in (Goldfarb and Tucker, 2011c). That paper studies empirically the economic effects of privacy regulation for the advertising-supported internet.…”

Section: How Can and Do Firms Respond?mentioning

confidence: 99%

“…Goldfarb and Tucker (2011c) suggests there may be large costs of privacy regulation if governments simply take an approach of restricting the use of data. The introduction of Facebook privacy controls studied by Tucker (2011b), though beneficial for advertising performance, is not ideal, because it is not clear that consumers were well-informed about the extent to which the new privacy controls actually applied to data used for advertising.…”

Section: Future Directionsmentioning

confidence: 99%

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The economics of advertising and privacy

Tucker¹

2012

International Journal of Industrial Organization

149

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One of the new realities of advertising is that personal information can be used to ensure that advertising is only shown and designed for a select group of consumers who stand to gain most from this information. However, to gather the data used for targeting requires some degree of privacy intrusion by advertisers. This sets up a tradeoff between the informativeness of advertising and the degree of privacy intrusion. This paper summarizes recent empirical research that illuminates this tradeoff.

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Section: How Can and Do Firms Respond?mentioning

confidence: 99%

Section: Future Directionsmentioning

confidence: 99%

The economics of advertising and privacy

Tucker¹

2012

International Journal of Industrial Organization

149

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“…Currently proposed regulations governing behavioral advertising in the US are focused around the mechanics of how firms implement opt-in and opt-out use of cookies and other tracking devices (Corbin, 2010). Previous empirical research suggests that this approach, by limiting the use of data by firms, reduces ad effectiveness (Goldfarb and Tucker (2010b)). By contrast, the results in this paper suggest that when privacy regimes are primarily focused on letting customers choose how personally identifiable information about them is shared and used, there is no negative effect on advertising performance.…”

Section: Introductionmentioning

confidence: 99%

Social Networks, Personalized Advertising, and Privacy Controls

Tucker

2011

SSRN Journal

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This paper investigates how internet users' perception of control over their personal information affects how likely they are to click on online advertising. The paper uses data from a randomized field experiment that examined the relative effectiveness of personalizing ad copy to mesh with existing personal information on a social networking website. The website gave users more control over their personally identifiable information in the middle of the field test. The website did not change how advertisers used anonymous data to target ads. After this policy change, users were twice as likely to click on personalized ads. There was no comparable change in the effectiveness of ads that did not signal that they used private information when targeting. The increase in effectiveness was larger for ads that used less commonly available private information to personalize their message. This suggests that giving users the perception of more control over their private information can be an effective strategy for advertising-supported websites.

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“…This means that our estimates reflect the placement of ads in their natural settings. Consistent with industry norms and our prior work (Goldfarb and Tucker, 2011c), we define a 'campaign' as an ad shown for a specific product on a specific website.…”

Section: Data On Display Advertisingmentioning

confidence: 99%

Standardization and the Effectiveness of Online Advertising

Goldfarb

Tucker

2015

Management Science

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The technological transformation and automation of digital content delivery has revolutionized the media industry. Increased reliance on automation has also led to requirements for standardization of content-delivery formats. This paper examines how the memorability of banner advertising changed with the introduction of new standards regularizing its format. Using data from randomized field tests, we find evidence that for most ads, ad effectiveness falls as the use of standard formats rises. The decline is smaller when a standardized ad appears to be more original (such as ads created by an ad agency). Therefore, a likely explanation is that increased use of a standard format makes it harder for basic ads to distinguish themselves from their competition because the ad format commands less attention.

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Privacy Regulation and Online Advertising

Cited by 95 publications

References 31 publications

The economics of advertising and privacy

The economics of advertising and privacy

Social Networks, Personalized Advertising, and Privacy Controls

Standardization and the Effectiveness of Online Advertising

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