Commentary

Google: Publishers Lose Half Of Ad Revenue From Cookie Blocking

Digital publishers lose 52% of revenue on average when readers set their web browsers to block cookies, the data files used to track the online activities of internet users, according to a study by internet search giant Google.

News publishers see an even steeper revenue loss of 62% as cookie-blocking prevents advertisers from reaching target audiences effectively. Google discussed the study’s findings in a blog post that mostly focused on proposals to improve consumer privacy without undermining ad sales.

To measure the effect of cookie blocking, Google’s ad team ran a test among 500 global publishers from May to August. The company disabled cookies on a randomly selected part of each publisher’s traffic, Chetna Bindra, senior product manager of user trust and privacy at Google, said in a blog post.

Google has a vested interest in a growing market for digital advertising. Parent company Alphabet earns 84% of revenue from ad sales, while its efforts to diversify into cloud computing and hardware, like mobile phones, haven’t boosted top-line results significantly.

The biggest threat to Google’s ad business comes from lawmakers and regulatory agencies that are cracking down on the sharing of consumer data that underpins media sales. The company faces lawsuits over its data-sharing practices, especially after the European Union enacted a stricter privacy law last year.

Google has tried to walk a fine line between the needs of advertisers and the demands of regulators by emphasizing consumer choice and transparency. The company favors the use of cookies for ad personalizations — especially compared with a less transparent method of audience tracking known as “fingerprinting” -- until publishers, advertisers, technology companies, consumers and regulators can develop a broadly accepted alternative.

On Thursday, the company published a proposal to give online users more control over how their data is used in digital advertising, and is seeking feedback from interested parties.

Google also started a project called Privacy Sandbox to urge publishers, advertisers, web developers and technology companies to share proposals that will protect consumer privacy while supporting the digital ad marketplace.

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