This report intends to contribute a more precise understanding of tracking and its consequences, both economic and social. We describe how:
- tracking works to circulate data and affect privacy
- data circulation benefits the U.S. economy
- the publishing industry uses data to shape the ratio of free ad-supported content to subscription content
- tracking affects aspects of the consumer web experience, beyond cost
- targeted advertising reduces inventory waste
- economic power would concentrate in the hands of the largest four or five technology companies because they are independent of circulated tracking data
- loss of tracking would produce quantifiable revenue losses to independent publishers and their supporting technology infrastructure
Tens of billions of dollars are at stake if third-party tracking ends without mitigation. The U.S. open web’s independent publishers and companies reliant on open web tech would lose between $32 and $39 billion in annual revenue by 2025.
Where Will It Go?
$24 to $29 billion in annual publisher revenues would likely be absorbed by walled gardens (Google, Facebook, and Amazon), and by other leading companies in industries such as telecommunications that hold stores of first-party data and are close to becoming walled gardens themselves.
Either way, the $8 to $10 billion of annual revenue that has been the prize driving the open web’s technological creativity over the last decade, would no longer be available to attract entrepreneurial risktakers and venture investors.