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A Leeds professor鈥檚 research looks at the challenges of online regulation in balancing consumer rights and market fairness.

On the internet, cookies are crumbling as mainstream web browsers look to phase out the third-party tracking codes that have given rise to targeted digital advertising. But consumers shouldn鈥檛 feel like firms are simply giving up on personalized marketing.听

鈥淥n the contrary, different strategies will be taken in order to achieve the same ends鈥攁nd whether that is an improvement, in terms of privacy, remains to be seen,鈥� Prof. Scott Shriver said.

Shriver, an assistant professor of marketing at the University of Colorado Boulder鈥檚 Leeds School of Business, knows what he鈥檚 talking about: As a researcher on the front lines in the battle over digital privacy, one of his major challenges is tracking consumers who鈥檝e opted out of tracking.

鈥淵ou have to get a little bit creative, in terms of adopting some of the techniques that industry uses to get around privacy constraints,鈥� Prof. Shriver said. 鈥淲e look at unique combinations of metadata that we can observe through your browser, your IP address, your rough geographic location and other techniques.鈥�

The economic tradeoff to data privacy

The sophistication involved in tracking unwilling users is on Prof. Shriver鈥檚 mind as he goes from researching privacy from a self-regulation standpoint鈥攖he AdChoices program adopted by the U.S. advertising industry鈥攖o a federally regulated one. He鈥檚 now exploring the European GDPR regulation, which gives consumers much more control of their data and has inspired spinoffs, most notably in California.听

But there are economic tradeoffs to such regulation that aren鈥檛 fully understood.

鈥淕iving consumers more choice and more control over their data is a good thing, but you鈥檝e also got this unintended consequence in that the bigger firms鈥擥oogle and Facebook鈥攚ill be the ones more capable of navigating the landscape,鈥� he said. 鈥淪o the bigger companies get bigger, and we don't want one or two firms controlling the entire digital advertising ecosystem鈥攖hat鈥檚 perhaps worse than not having enough consumer control over data.鈥�

Prof. Shriver鈥檚 work on the economic consequences of GDPR is still in development, but a similar paper published in Marketing Science looked at the cost of opting out under AdChoices. That research, conducted alongside Prof. Garrett Johnson, of Boston University, and Ph.D. candidate Shaoyin Du, won the John D.C. Little Award at the 2021 INFORMS Marketing Science Virtual Conference, presented to the best marketing paper published in an INFORMS journal.听

The paper concluded that, as maligned as cookies may be, they鈥檙e incredibly effective. Only about one-quarter of 1 percent of online ads are served to users who opt out of tracking. As a result of those opt outs, publishers lost a little more than $8.50 per person in 2015鈥攅quivalent to $5.7 million in lost revenue.听

For regulators, that should illustrate the perils of careless legislation. Falling ad values will squeeze third-party players, allowing sophisticated giants like Google to vacuum up more business. It also means publishers may be forced to charge for content that consumers are used to getting for free.听

Prof. Shriver acknowledged there鈥檚 no silver bullet, but he hopes his work help illustrate the complexity of the challenge lawmakers face.听

鈥淚t highlights this cat-and-mouse kind of nature of privacy regulation,鈥� he said. 鈥淭hese are welcome changes, but we do have to be careful of unintended consequences.鈥� 听

Part of the challenge, he said, is that in the United States, there isn鈥檛 as much conversation around digital privacy as in other parts of the world.听

鈥淭he more data I gather, the more anecdotal conversations I have with people about the topic, the more I鈥檝e realized that I鈥檓 an outlier, in terms of having an innate concern about this,鈥� he said. 鈥淚n fact, I鈥檓 shocked by how how few people actually give this serious consideration.鈥�

A second act in academia

His perspective may be related to how he came to this research thread. Marketing wasn鈥檛 Prof. Shriver鈥檚 original calling; he originally studied physics and astronomy with an eye to an academic career, but got caught up in the boom years of the internet and got involved with startups. He got an MBA from UCLA with the intent of pursuing venture capital, but some of his professors talked him back into academia.听

鈥淭he more I thought about it and did some due diligence about quantitative marketing and the kind of things that could be done in the field, I thought it might be a good fit, given my math and science training,鈥� Prof. Shriver said.听

Now, he鈥檚 hoping that perspective helps him be an advocate for digital privacy that doesn鈥檛 create monopolies or have other consequences.听

鈥淭his has always been of interest to me, so I feel fortunate that I鈥檝e been able to get a toehold in this area and hopefully continue to ask the right questions about privacy and consumer behavior,鈥� he said.听