The cookies on your device are worth more than you think


A single cookie, saved by a browser onto a user's device, stays for 279 days on average and is worth €2.52 ($2.73) to publishers and advertisers, a recent study by HEC Paris Business School has revealed. This may explain why it is so hard to get rid of them.

While regulators debate on restricting online trackers, known as cookies, researchers have investigated how much revenue they bring to publishers (i.e., websites that have ad placements).

The study included the cookies of 54,127 users, who were served 128 million ads over 2.5 years. That’s 2365 ad impressions for each user.

Only 54.8% of analyzed cookies survived 30 days, with the remaining deleted. 28% of cookies survived for one year, and 15% of them were still present after two years.

The average lifetime value of a cookie comes in at €2.522. The value was calculated by the price of ad impressions on the cookie.

For example, one cookie was active for 514 days and received 9,162 ad impressions, for which advertisers had paid €10.823 (1.8 cents per day on average).

Researchers observed some cookies (about 12%) that grow in value over time, reaching an average of 11 over their lifetime. Some long-living outliers brought a few dozen euros. Meanwhile, other long-living cookies had decreasing returns over time, with a total value averaging at €4.9.

Most cookies maintain their value over time.

How do cookies earn money?

A cookie is a small piece of data sent from a server to a browser and stored on the user’s device, allowing it to identify the user. While users have control over saving or deleting the cookies, studies show that most internet users just blindly accept them.

The paper explains how the ad impression auction process works in real-time: when a user visits a publisher’s website, it sends an ad call to an ad exchange. The call includes the user ID (cookie ID) and the properties of the ad slots, such as size. Then, the ad exchange collects bids from advertisers for displaying ads. Finally, after determining the winner, the ad is loaded and displayed to the user.

For this research, the data was collected by a European ad exchange, and it allowed Klaus M. Miller, Assistant Professor of Quantitative Marketing at HEC Paris, and Prof. Dr. Bernd Skiera from Goethe University Frankfurt to track the value of cookies over time, “which no previous researchers have achieved.”

The ad exchange, auctioning ad impressions in real-time, reaches approximately 84% of its relevant market’s total monthly internet users. However, the data used is quite old, collected between March 3rd, 2014, and July 16th, 2016.

The goal of the study was to determine how online tracking restrictions could affect publishers’ revenues. In Europe, cookie-based display ad revenues accumulate to €10.60 billion annually.

Advertisers have said that the loss of cookies in the world's most popular browser will limit their ability to collect information for personalizing ads and make them dependent on Google's user databases.

“The potential economic loss to publishers of restricting cookie lifetimes to one year, as the European Union proposes, is 8.524% of the cookies’ total lifetime value,” the study concludes. “Such a policy could incur a yearly loss of approximately €904 million in display ad revenues, which is equivalent to a potential yearly economic loss per EU internet user of €2.082.”

If all cookies were limited to just 30 days, cookie-based ad revenues would decrease by €1.475 billion.

Researchers noted that in the US, online advertising revenue was $209.7 billion in 2022.

The study does not imply that advertisers would suddenly stop spending. While the online advertising industry is moving toward a world without third-party cookies, it’s also working on privacy-sensitive replacements – the need for targeted ads remains.

“Publishers could also invest more decisive in alternative targeting strategies, e.g., contextual targeting. In discussions with regulators, they can use the €2 potential yearly loss per user to discuss a compensation value for providing more privacy.”

The researchers noted that digital marketers plan to increase spending by 5.7% in 2024, and one reason for that is the capability “to track users along their customer journey.”

“Being able to accurately measure the reach and calculate the ROI of digital campaigns is hugely attractive to CMOs,” they quoted Aaron McKee, CTO at Blis.

Some browsers already phased out third-party cookies, and Google is testing the feature on Chrome.

In 2019, Apple began blocking all third-party tracking by launching its second version of Intelligent Tracking Prevention in its Safari browser.

“Google has set a 2024 deadline for preventing cross-site and cross-app tracking and announced eliminating third-party cookies in its Chrome browser.”

Mozilla has offered Total Cookie Protection, which confines third-party cookies to the site where they were created.

For now, cookies are still frequently used to track users despite the availability of other online tracking technologies, such as digital fingerprinting or advertising identifiers.

“Even if cookies are being (partially) replaced, the need for online tracking will prevail as the online advertising industry still wants to track, profile, and target online users to increase the efficiency of online advertising,” researchers said.

They explained that tracking allows firms to acquire more profound insights into user behavior, thereby improving the user experience by implementing strategies for personalizing content. Unsurprisingly, many users and policymakers are increasingly worried about privacy in such cases.

“Advertisers usually use third-party trackers for ad targeting, allowing them to track users across websites and apps. Users may perceive such cross-site and cross-app tracking as infringing their privacy. Thus, several initiatives exist to restrict third-party trackers (cookies) but not necessarily first-party trackers (cookies).”