WWS Calendar

CITP Lunch: Justin Rao - Advertising, Competition, and Privacy in E-Commerce

Sep 16, 2014 12:30PM to 01:30PM
Sherrerd Hall
Room 306


Restricted to Princeton University
Justin Rao - Economic Researcher, Microsoft Research

Center for Information Technology Policy

We use a large dataset of browsing logs to isolate online shopping sessions and then determine how each shopping session started. While advertising is certainly an important driver of e-commerce, organic web search and direct navigation account for the majority of shopping sessions. Within advertising, sponsored search is by far the most important channel, with many firms relying on sponsored search for over 30% of their traffic. We apply latent semantic analysis to search queries to separate firms into markets. Firms with low within-market share tend to have a higher reliance on advertising, especially sponsored search, as do all firms in more niche markets. Display advertising which can make use of third-party tracking accounts for less than 5% of shopping sessions and very few firms rely on it for more than 10% of their traffic---it does not facilitate competition the way sponsored search does. Consequently, we estimate that "do not track" legislation would have a muted impact on e-commerce and by tracing the source of ads, we estimate there would be limited damage on the web-publishing side as well.
Joint work with: Ceren Budak, Sharad Goel, Justin Rao and Giorgos Zervas (BU, Consulting Researcher at MSR)
Paper can be found at: http://justinmrao.com/dnt.pdf
Justin M. Rao is a researcher at Microsoft Research in New York City. He previously was at Yahoo! Research in Santa Clara, CA for two years after receiving his Ph.D. in Economics from UCSD in 2010. He is an empirical economist with a focus on e-commerce, decision making and writing about himself in the 3rd person.
Food and discussion begin at 12:30pm. Open to current Princeton faculty, staff, and students. Open to members of the public by invitation only. Please contact Laura Cummings-Abdo at lcumming@princeton.edu if you are interested in attending a particular lunch.