This week, the Digital Advertising Alliance announced the results of an economic study, conducted by Professors Howard Beales and Jeffrey Eisenach of Navigant Economics. The findings support a few things that the NAI and its members understand very well: (1) that Interest Based Advertising not only increases relevance for consumers but the economic value of the online advertising ecosystem as a whole, and (2) that websites of all sizes – but especially small publishers – depend on the revenue generated from third-party advertising technology to survive.
The DAA’s study found that third-party technology models are heavily used across the Internet. “Even the largest publishers rely on third-party technology models to serve approximately half of their advertising impressions, while ‘long tail’ publishers rely upon third party technology models for up to two thirds of their advertising volumes.” It further concluded that the availability of cookies increases the value of online advertising by 60 to 200 percent, depending on the length of the cookie’s life.
It’s no surprise that the web relies heavily on relevant advertising, given the significant increase in price that advertisers are willing to pay for impressions when they are backed with the non-PII data that third parties provide to the ecosystem. The study confirms that smaller publishers are “disproportionately dependent on these intermediaries” and that Interest-Based Advertising serves as a crucial component of the diverse and democratic Internet users enjoy today. These advertising models uphold much of our free access to both long-tail publishers and platforms for user-submitted content.
DAA Managing Director Lou Mastria was correct in pointing out that industry self-regulation also plays an important role in keeping this whole ecosystem running smoothly. In order to continue to reap the benefits and economic value that Interest-Based advertising provides, it’s critical for consumers and policy makers to trust the system. We share the DAA’s commitment to addressing consumers’ privacy concerns, increasing the quality and availability of educational resources, and enhancing both transparency and choice.
To read more about the study, visit http://www.aboutads.info/resource/valueinfostudy.