 Estimating the Value of Retargeting in the Online Advertising MarketYuhan Fang and Kohei Kawaguchi No j34t8_v3, SocArXiv from Center for Open Science Abstract: In response to growing privacy concerns, many browsers have implemented restrictions on third-party cookies and cross-site tracking in online advertising. Advertisers are concerned that such retargeting prohibition policies could lead to a reduction in ads' click probability, thereby affecting the bid values. This paper investigates the economic consequences of prohibiting retargeting in online advertising by analyzing data from a demand-side platform (DSP). Our analysis shows that the DSP's bid values for non-retargeted impressions on Google Chrome are more than 60\% lower than those for retargeted impressions. Yet this difference understates the true disparity in bid values, as retargeting status is observable only for internal auction winners. By modeling the internal auction process and estimating advertisers' valuations, we identify even larger differences between retargeted and non-retargeted impressions: 76.04% for Android and 71.40% for Windows. Our counterfactual simulations indicate that a complete ban on retargeting would substantially reduce expected bid values—by 30.06% for Android and 49.84% for Windows users. These results underscore the significant economic tradeoff between enhancing privacy protection and maintaining advertising market efficiency. Date: 2025-02-01 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:j34t8_v3 Access Statistics for this paper More papers in SocArXiv from Center for Open Science |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.