Privacy regulation and online advertising
Name
Tucker_Privacy Regulation.pdf
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346.36 KB
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Adobe PDF
Checksum (MD5)
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Author(s)
Goldfarb, Avi
Tucker, Catherine Elizabeth
Date Issued
January 2011
Journal
Management Science
Publisher
INFORMS
Citation
Goldfarb, Avi, and Catherine E. Tucker. “Privacy Regulation and Online Advertising.” Management Science 57.1 (2011) : 57-71.
Version
Author's final manuscript
Abstract
Advertisers use online customer data to target their marketing appeals. This has heightened consumers' privacy concerns, leading governments to pass laws designed to protect consumer privacy by restricting the use of data and by restricting online tracking techniques used by websites. We use the responses of 3.3 million survey takers who had been randomly exposed to 9,596 online display (banner) advertising campaigns to explore how privacy regulation in the European Union (EU) has influenced advertising effectiveness. This privacy regulation restricted advertisers' ability to collect data on Web users in order to target ad campaigns. We find that, on average, display advertising became far less effective at changing stated purchase intent after the EU laws were enacted, relative to display advertising in other countries. The loss in effectiveness was more pronounced for websites that had general content (such as news sites), where non-data-driven targeting is particularly hard to do. The loss of effectiveness was also more pronounced for ads with a smaller presence on the webpage and for ads that did not have additional interactive, video, or audio features.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1287/mnsc.1100.1246
