Northwestern Assistant Professor of Marketing Nils Wernerfelt will present for the Seminar Series.
About Nils Wernerfelt
Professor Wernerfelt joined the marketing department at the Kellogg School of Management in 2023. Professor Wernerfelt holds a PhD in Economics from MIT and a BA in Mathematics from Harvard. Prior to joining Kellogg, he was a Director on the Economics and Policy Research team at Meta. Professor Wernerfelt’s research interests include online marketing, digital platforms, and analytics. Recent work has considered the impacts of privacy regulation on advertising effectiveness, the returns to consumers and advertisers from digital platforms, and the effectiveness of digital advertising for social good causes.
About the presentation
Digital advertising, which uses consumer data to target ads to users, now accounts for most of global ad expenditures. Privacy concerns have prompted regulations that restrict the use of personal data. To inform these policy debates, we develop an equilibrium model of advertising and market structure to analyze the impact of privacy regulation on market outcomes. We test the model’s predictions using the launch of Apple’s App Tracking Transparency feature, which created a natural experiment that limited the use of consumer data. Leveraging data from all U.S. advertisers on Meta combined with offline administrative data, we find that reductions in digital ad effectiveness led to decreases in investments in advertising, increases in market concentration, and increases in product prices. These effects are economically meaningful in magnitude and suggest potential harms to both firms and consumers from privacy regulation.
Please note that this event may be photographed. Images and other content may be published on Flickr and/or used to promote the La Follette School of Public Affairs in the future.
Organizer
La Follette School of Public Affairs, Department of Risk and Insurance at UW–Madison’s Wisconsin School of Business.
Contact
Héctor Pifarré i Arolas, hparolas@lafollette.wisc.edu