Commentary

Google Says Cookie-Blocking Hurts Publishers

Earlier this year, a study by academic researchers about behavioral advertising suggested that ad targeting didn't do much for publishers' bottom lines.

But Thursday, Google cast doubt on those findings. The company said it conducted its own study, which concluded that blocking cookies “materially reduces” revenue for publishers.

For its report, Google analyzed a fraction of traffic on each of the 500 largest Google Ad Manager publishers in the last three months. When users lacked cookies, publishers received 52% less revenue, according to Google.

“Lower revenue for traffic without a cookie was consistent for publishers across verticals -- and was especially notable for publishers in the news vertical,” Google's Chetna Bindra wrote Thursday in a blog post. “For the news publishers in the studied group, traffic for which there was no cookie present yielded an average of 62 percent less revenue than traffic for which there was a cookie present.”

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For the earlier study, released three months ago, researchers at Carnegie Mellon, the University of Minnesota and University California Irvine examined millions of ads that appeared online during one week in May of 2016, on websites owned by a large media company. (The study doesn't identify the company.) The researchers found that the media company received just 4% more in revenue when tracking cookies were available to ad-tech companies.

The contradictory results of the two studies may well be impossible to reconcile without significantly more detailed information.

But Google's study is likely to meet with more enthusiasm by the ad industry, which has long claimed that free content online is fueled by online behavioral advertising, or tracking users across the web in order to deduce their interests and serve them with targeted ads.

Those claims have been taken seriously by policymakers. Last year, the Federal Trade Commission suggested in a staff report that publishers would be harmed by privacy rules that limited online tracking. “If consumers were opted out of online advertisements by default (with the choice of opting in), the likely result would include the loss of advertising-funded online content,” the FTC wrote.

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