12/9/2023 0 Comments Target squeedFor example, if a customer buys shoes on a retailer’s website that has a Meta pixel installed, that purchase information would be sent over to Meta. To get the data from other websites that provides the basis for this matching-called offsite data-social-media platforms encourage businesses to install “pixels”: small pieces of code on their websites that collect information about users and send them to platforms for use in ad delivery. That could have implications for entry into the market, and it could ultimately have downstream negative consequences for consumers if that leads to less variety and higher prices.” Helping advertisers find the right customersĭigital advertising now constitutes a majority of advertising spending, precisely because businesses can tap detailed user data to match ads to potential consumers. “But we found that removing offsite data makes it harder for smaller advertisers to acquire new customers and compete with incumbent firms. “A lot of the discussion around privacy regulation has been focused on the consumer side, and for good reason,” Tuchman says. They found that removing the ability to use offsite data would result in a 35 percent increase in the cost to gain each new customer-and would disproportionately hurt smaller advertisers. The team conducted a large-scale experiment with more than 70,000 advertisers on Facebook and Instagram to find out just how much companies benefit from using offsite data to deliver targeted ads. To study the issue, she teamed up with Nils Wernerfelt, an economist at Meta who will join Kellogg as an assistant professor this fall, along with Robert Moakler of Meta and Bradley Shapiro of the University of Chicago. So how effective was offsite data in helping to harness new customers through advertising, and if it went away altogether, how much would it cost businesses? This type of data is called “offsite data,” because it’s used to target ads on a particular platform but is generated off the platform. ![]() In fact, no one had actually quantified the value of user data-such as browsing activity and online purchases-that is tracked and shared across applications to help deliver ads on many major advertising platforms. ![]() The move, lauded as a win for users’ privacy, ultimately cost big tech platforms billions of dollars.īut when Kellogg marketing professor Anna Tuchman examined the issue, she found very few studies that showed the effect on businesses who advertised on these apps.
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