USA Today's Vice President of Sales Lorraine Ross discusses behavioral targeting with iMedia's Neil Perry.
Coming soon from iMedia Communications is a new report, "Demystifying, Defining and Profiting from Behavioral Targeting." For the report, iMedia Vice President Neil Perry interviewed a wide range of industry experts, including USA Today's Vice President of Sales Lorraine Ross. While some of her most important insights appear in the soon-to-be-released report, here we present an extended excerpt from the interview.
Neil Perry: Who is your provider for behavioral targeting, and how long have they been doing it?
Lorraine Ross: The provider is TACODA, and we have been doing it since … I think we launched it September 2003.
Perry: What is the benefit to USA Today of behavioral targeting?
Ross: The benefit to us is it helps us optimize our inventory by putting the focus on the characteristics of the audience, regardless of where they are on the site. You create value by identifying the audience, not just the content they are reading. And, so, you multiply the value. It is not like you are abandoning the value of the contextual relevance; but you are able to say, "Oh, and in addition, we know this about this person."
The less anonymous our reader is to the marketers, the more valuable he or she becomes.
So, it optimizes the inventory. It also helps to drive rates, because you are, to a certain extent, profiling. You are able to profile me, the reader … you are able to get more for exposing the marketer to that reader, that audience member.
Perry: What about for the marketer? How do you serve it up to the advertiser? What is the benefit to them?
Ross: Well, better targeting. I think that there is … the ability to provide more and more targeting against the individual, not necessarily in a [direct response way], you know clickthrough, or take-action kind of way; but, just in terms of being able to identify demographics, behavior (meaning sort of intention, or mindset), geography -- all of these things are incredibly valuable to a marketer, because they are able to speak directly either their best customers, or best prospects.
Perry: All right, now how satisfied would you say you are with the success of your behavioral targeting program?
Ross: I am very satisfied. It is still in its infancy, though. I think that behavioral targeting still has a long way to go as we continue to, first of all, grow our audience and collect and aggregate information about our readers. You know, for example, we have a mortgage calculator on our site. We have looked at creating a behavioral segment around it, because certainly that kind of purchase intent is ... to be able to identify that is phenomenal -- it is phenomenally valuable. But, we don't have enough people at any one time really using the mortgage calculator on our new site, (because we are not a financial site specifically), for it to really make sense for us now.
But, as our audience, as our site continues to grow, or we link into other sites, then that potential is really there to create those segments. So, we are very satisfied with the contribution that behavioral targeting has made so far. But, I think we continue to look out to say, "All right, what else can we do with identifying our readers? How else can we do that? And, how can we even cross path the characteristics? Can we layer things on top of one another to make it that much more specific?"
Perry: Have the marketers who are utilizing it gotten a little skittish of late, with all of the HR29 [anti-spyware legislation] related stuff that is going on out there, and all of the focus on cookies? Or, are they still pretty actively engaged in behavioral targeting?
Ross: They seem to be actively engaged. They care about their success metrics. And, from what I can tell, there is full movement away from rigid adherence to success metrics, such as, "Well, we need people. We don't care how you do it, Mr. Publisher. But, we need people to visit our site and go through three page views, or we don't consider it to be a success." So, they are really, really still very, very busy evaluating on the back end. If we could do it by only serving ads on Tuesdays, and that got them their success metrics, that would be fine with them. It is really the publisher that is saying, "I think I know what would work for you." We are trying to answer the marketer's problem. But, the marketers … I don't even think they care how the problem gets solved. It is really up to the publisher. But, they recognize logically behavioral targeting makes sense as a way to attack that problem.
Perry: Approximately what percentage of your campaigns are behavioral targeted, or include a behavioral targeting piece? And, where do you think it is going to go next year?
Ross: I think there is never a campaign that is solely behavioral targeting. That is largely because we are trying to optimize a client's campaign. They come to us, and we say, "Okay, a little of this, and a little of this, and a little of this." A little contextual, a little behavioral, a little demographic targeting. And, then that gives the publisher the flexibility to, when the marketer comes back and says "This part is really working, but this part is not," you are able to really hold them to the buy. But you know, you start out with three different options, three different choices. So, there is an inherent expectation that the client is going to come back to want to optimize.
But, to answer your question, and what I will do is I will go back to finance and ask for the percentages, because the [estimated] amount of … the number of proposals, or IOs [insertion orders], that actually contain a behavioral targeted component is about 50 percent. But, the amount from behavioral targeting very, very specifically and narrowly stated is maybe, you know, 10 to 15 percent.
Neil Perry: What are your thoughts, and your company's thoughts, about all of the broo ha ha over cookies, and the deletion of cookies, et cetera.?
Lorraine Ross: You know, we have read the Jupiter survey, and I keep up on all of my newsletters, and … I think they are right. I think that there are an awful lot of people who are deleting their cookies, even inadvertently by using AdAware or Spybot. Keeping your PC clean of viruses has become, I think, critical to consumers. And, if by using those products you are wiping out cookies, then, yeah, I think cookie counts are incredibly unstable. So, I think that there is a real issue there. I do. And, I think that it is really problematic. It sets us back, because it prevents us from really understanding a lot of things -- the total size of your audience, frequency -- all of these things are compromised when users are aggressively deleting their cookies. I mean, you run the risk of asking them again for registration information, and it is just … you know, you really get worried about that.
Perry: Yeah. The consumers are getting, I think, much more reluctant to offer up that information, just because those one or two times you get taken advantage of it is just a nightmare.
Ross: Well, and then you … especially when the registration process is a little bit, somewhat onerous. Then, your cookie gets wiped out because you are using an AdAware program because you are trying to eliminate viruses. And, then you go back to your favorite site, and they want the same information all over again. And so it is a slippery slope.
Perry: Yeah, like when you ask just to get a copy of an article, and six screens later you are still filling out some forms, and you start realizing …
Ross: Yeah, I think that that is really a problem. That is why we have made a conscious decision not to go … and here is where the difference is: I think the companies that are contact companies exclusively are going to have a really tough time maintaining a customer information database and asking people for information. I think companies that are utility based, and I mean media companies like Yahoo! … well, you are really going there to use a tool, and the contact is really a nice side business for them. But, you are really going there because that is where your email is. Or, you are going to, you know, you are going to use a tool. Then, I think that they have a better chance of … you would be more likely, more inclined, to go ahead and put that information back in again.
I also think that … (I forgot to mention this earlier) one thing we have done is we have undertaken what we call the "perceptive cookie project" here, where we try to … you probably can only host, I guess it is anywhere up to 20 cookies, at any one time. And, so the cookies will get bumped off if new cookies are being introduced. You just can't host that many. So, we also have tried to do that where certain cookies will be made persistent. It is almost like you put a timestamp on the really important ones. And, you push those to the front of the line. It doesn't eliminate the problem of cookie deletion. But, at the very least, you can take the most important cookies to you … or, the ones that are, you know, site designated, and then make sure that they are the freshest cookies so that they never expire and get bumped off of a browser.
Perry: What advice do you have to either marketers or advertisers that are considering behavioral targeting?
Ross: Ummm … advice. What really works best is when marketers come to us with broadly stated issues, and they help us to solve the problem with them. Because, most of the time, we don't have a canned segment created for them. But, if we apply our brains and some technology we can come up with a customized solution. I think increasingly sites will be required to really come up with more customized approaches to a marketer's problems. And, behavioral, I would include in that. Some of these solutions are only going to work if the site is gigantic -- like one of the portals. But, that is the advice I would give: when you receive directions from clients that are really very tactical … and I get really worried about behavioral standards, because I think, well, one size is not going to fit all. I mean, we might be able to solve your problem without necessarily adhering to an arbitrary standard that you are setting for the behavioral segment. Let us try some different things with you, to try to solve that problem.
Perry: Thoughts on the future?
Ross: Where it is going to go to next is, I think, really interesting, because publishers are increasingly … technology is being developed, software is being developed, that allows publishers to database all of their information and metatag all of their information. And, increasingly, publishers are moving in this direction. We will be able to take advantage of some of the … not so much Google's business model, if you will, by observing the behaviors, on a nuance level on our site. So, for example, publishers are moving towards the dynamic display of information.
So, you come to my site, and you are looking for information about a certain band, say, in the music section. And, the publisher at this point will be able to, very soon, offer you up a page -- and, it really doesn't even exist on our site, but because you requested information about a specific band, we are able to dynamically compose a page of relevant articles, photos, video … you know, links right in front of you.
And, I think where behavioral targeting goes after that is that now I know that you have this interest. And, you have used my site in a way that maybe you formerly would have used a search engine … to be, just to be entertained and get your information. And, that is going to provide publishers with much more insight into their behavior and purchase intent, rather than just, "Well, what did you tell me in your ZAG [ZIP Code, Age, Gender] registration form? And, have you gone to the travel section, you know, a couple of times in the last 30 days?" So, I think publishers, and the publishing model, are really shifting in an interesting way that will allow us to -- without invading anybody's privacy -- be able to really infer a lot more about our readers and be able to offer that kind of relevant advertising that everyone says that they are interested in. So, that is going to change, and I look forward to that, because it is better targeting, better targeting, better targeting!
Perry: Yeah, and really, that is the strength of our business. And, we are really starting to assert our muscle, right now, in that area. So, it is great.
Ross: Yeah, I mean, publishing is changing, and that is going to have a direct impact on our ability to understand readers and serve them better advertising.
Perry: Yeah. Great. Well, listen, I really enjoyed this conversation, and I appreciate you taking the time.
Ross: All right, take care.
Thursday, August 25, 2005
Fixing the Cookie Mess
LIKE IT OR NOT, IF the growing controversy surrounding the misuse of cookies by our industry and their deletion by consumers is to be solved, it will be up to the publishers to do it. I had the great fortune to spend Monday in Toronto at the AdMonsters conference debating the issue on a panel with Walt Mossberg of The Wall Street Journal, Esther Dyson of Release 1.0, Kiumarse Zamanian of Yahoo!, and Bowen Dwelle of AdMonsters. In attendance, and very much part of the debate, were the heads of ad operations from almost all of the 50 largest ad-supported sites on the Web. It was quite a session. In spite of the fact that each of us has historically taken positions quite opposite from the others, everyone largely agreed almost immediately on a couple of key points. (Disclaimer: I can't speak for the panel and the audience, so this is my version of the discussion.)
The online ad industry is facing a large and growing problem with consumers not understanding or trusting cookies that are placed on their browsers, equating them with spyware. This problem is not going away. It is only going to get worse.
It doesn't matter if cookies are not executable software like spyware; consumers don't understand the differences and don't care. They are now in charge. As long as they continue to perceive that a problem exists, they will continue to use software tools and other means to delete cookies and anything else that identifies and tracks them without their consent.
Consumers will only be happy and well served if every company that tracks and uses consumer information is fully transparent about what data is being tracked, how it is being used, and if consumers are given the opportunity to consent to participate in the process.
Publishers are the ones that will have to lead the effort for transparency and consent, as well as police the process, since they are the ones with regular, recurring, and direct relationships with consumers and are the "gatekeepers" that advertisers and their agencies pay to contact and engage those consumers.
Trackable consumer data is becoming a very powerful driver in the digital marketing arena. If publishers do a good job of getting consent and providing value to consumers in exchange for data, they can probably build very large and profitable businesses doing it. Thus, it may not only be good public policy, it is probably good business.
All of these points are certainly still subject to debate by many, but for publishers, the debate must end now. It is easy to look at all of the logistical challenges of providing consumers with notice and an opportunity to consent when cookies are used -- I outlined many of them in my last column -- however, we can't forget that it is the publisher that provides the consumer access for advertisers and their service companies. If publishers don't take the lead, if publishers don't police the use of cookies that capture and exploit consumer data, who will?
How should publishers start? Here are my thoughts.
Notice and consent. Publishers must develop a policy to provide clear and transparent information about how they use cookies or similar technologies. Putting this information in their privacy policies is only the first step, not the last. Basically, publishers should establish themselves as the consumers' trusted partner for data-targeted advertising.
Information and control. Publishers must begin to understand and control how their sites are being used by others to cookie their consumers. They must recognize that their media has and continues to be the channel of choice for spyware companies and brokering companies that place cookies as part of campaigns to "harvest" those cookies. At the least, publishers should institute a policy that requires all advertisers and agencies to disclose to them: 1) a list of all cookies that will be placed on consumers' browsers as part of a campaign, together with the domains within which they will be set; 2) a description of what data will be captured and appended to cookies or a related database; and a description of what the captured data will be used for and for how long it will be kept.
Will there be challenges? Yes. Will ad buyers and service companies push back? Of course they will. Most ad agencies and advertisers don't even know all of cookies they and their service providers set. The cookies that agencies and their service providers set can change frequently between campaigns and during campaigns, so keeping track of all of these will be challenging, for sure. Collecting and monitoring cookie deliveries will make publishers' lawyers worry that they are taking on new liabilities, and may counsel against this. And, it could impact revenue. Since there are a number of large online advertisers that buy media for the primary purpose of capturing consumer data for reuse, it is likely that some of them will balk at disclosure, or refuse to advertise if disclosure is required.
What's the answer? Do it together. If publishers work together on this, they will have enough clout to get it done. Be loud. Be persistent. If you do it right, consumers and their advocates like Walt Mossberg, will be on your side. They will support you; they will reward you with their loyalty.
The online ad industry is facing a large and growing problem with consumers not understanding or trusting cookies that are placed on their browsers, equating them with spyware. This problem is not going away. It is only going to get worse.
It doesn't matter if cookies are not executable software like spyware; consumers don't understand the differences and don't care. They are now in charge. As long as they continue to perceive that a problem exists, they will continue to use software tools and other means to delete cookies and anything else that identifies and tracks them without their consent.
Consumers will only be happy and well served if every company that tracks and uses consumer information is fully transparent about what data is being tracked, how it is being used, and if consumers are given the opportunity to consent to participate in the process.
Publishers are the ones that will have to lead the effort for transparency and consent, as well as police the process, since they are the ones with regular, recurring, and direct relationships with consumers and are the "gatekeepers" that advertisers and their agencies pay to contact and engage those consumers.
Trackable consumer data is becoming a very powerful driver in the digital marketing arena. If publishers do a good job of getting consent and providing value to consumers in exchange for data, they can probably build very large and profitable businesses doing it. Thus, it may not only be good public policy, it is probably good business.
All of these points are certainly still subject to debate by many, but for publishers, the debate must end now. It is easy to look at all of the logistical challenges of providing consumers with notice and an opportunity to consent when cookies are used -- I outlined many of them in my last column -- however, we can't forget that it is the publisher that provides the consumer access for advertisers and their service companies. If publishers don't take the lead, if publishers don't police the use of cookies that capture and exploit consumer data, who will?
How should publishers start? Here are my thoughts.
Notice and consent. Publishers must develop a policy to provide clear and transparent information about how they use cookies or similar technologies. Putting this information in their privacy policies is only the first step, not the last. Basically, publishers should establish themselves as the consumers' trusted partner for data-targeted advertising.
Information and control. Publishers must begin to understand and control how their sites are being used by others to cookie their consumers. They must recognize that their media has and continues to be the channel of choice for spyware companies and brokering companies that place cookies as part of campaigns to "harvest" those cookies. At the least, publishers should institute a policy that requires all advertisers and agencies to disclose to them: 1) a list of all cookies that will be placed on consumers' browsers as part of a campaign, together with the domains within which they will be set; 2) a description of what data will be captured and appended to cookies or a related database; and a description of what the captured data will be used for and for how long it will be kept.
Will there be challenges? Yes. Will ad buyers and service companies push back? Of course they will. Most ad agencies and advertisers don't even know all of cookies they and their service providers set. The cookies that agencies and their service providers set can change frequently between campaigns and during campaigns, so keeping track of all of these will be challenging, for sure. Collecting and monitoring cookie deliveries will make publishers' lawyers worry that they are taking on new liabilities, and may counsel against this. And, it could impact revenue. Since there are a number of large online advertisers that buy media for the primary purpose of capturing consumer data for reuse, it is likely that some of them will balk at disclosure, or refuse to advertise if disclosure is required.
What's the answer? Do it together. If publishers work together on this, they will have enough clout to get it done. Be loud. Be persistent. If you do it right, consumers and their advocates like Walt Mossberg, will be on your side. They will support you; they will reward you with their loyalty.
Monday, August 22, 2005
Cookie Facts: Your Recipe for Success
WE IN THE INTERNET ADVERTISING business are fond of cookies. We need them. We want to keep them. We use them all the time. But we are, undoubtedly, an interested party. Cookie critics, meanwhile, claim that they are just plain bad, while the personal privacy and security software vendors give users the impression that they are the same in quality or intent as the spyware that infests a computer with pop-ups, or the dialer downloads that secretly call a number in Uzbekistan for $5 a minute. But are they really instruments of the devil? Should cookie servers really be tarred with the same brush as the criminals?
First, the basic facts: Cookies are not, and cannot become, executable programs, let alone self-executable ones. They are tiny text files, placed on a computer by a Web server and readable only by the server that placed them. Aside from basic anonymous information like browser type and IP address, cookies contain nothing that the user has not voluntarily supplied. They cannot be configured to do more - if they tried, the user's browser would reject them.
Cookies are, in fact, no more than the innocent lubricant without which the Web's machinery would come grinding to a halt. When you buy things online, a cookie is what makes your shopping basket function. When you return to the site to reorder the same things, a cookie is what tells the site which database record to access to call up details of your past orders. In fact, whenever you go online and experience any degree of personalized experience, a cookie is probably responsible. But, unless you have actively provided personal information to the site that placed the cookie on your computer, it can convey none.
The basic act of delivering a cookie to your computer and later accessing it never involves, and is intrinsically unable to involve, the gathering of any personally identifiable information about you. A tracking cookie can, indeed, be used to gather information about pages viewed on your computer (but only on sites with which that cookie is associated), and that information can be used to serve you ads or content that more closely match your interests - but the information gathered is completely anonymous and utterly untraceable to any individual.
The immediate beneficiaries of tracking cookies served by ad companies are, it's true, advertisers and publishers. But what does that mean? If advertisers are happy, publishers get paid. And if publishers get paid, they have the money to produce the high-quality content that attracts the visitors to their sites, who in turn attract the advertisers. Site visitors, then, are equal beneficiaries. But without the refinement in targeting made possible by the use of cookies, that advertising would be far less valuable and the quality of the content would inevitably suffer.
In fact, if cookies were crippled, you could expect that users trying to navigate the Web would be assaulted by a succession of permission-demanding dialogues, probably in the form of pop-ups, as they did so. Their progress would be slowed to a near halt and many sites would be rendered effectively unusable. The Web in its current form might well collapse, as users would be unable to reach the content and advertisers would be unable to reach the audiences that they each wanted.
At its most basic, it comes to this: Should Web sites remain mostly free and continue to get better? Or should cookies be crippled and the entire commercial sector of the Web be put at risk? My answer is that not only are cookies incredibly useful, but that accepting them on one's computer is the negligible payment one makes for a free service (i.e. the Web) of enormous richness and variety.
First, the basic facts: Cookies are not, and cannot become, executable programs, let alone self-executable ones. They are tiny text files, placed on a computer by a Web server and readable only by the server that placed them. Aside from basic anonymous information like browser type and IP address, cookies contain nothing that the user has not voluntarily supplied. They cannot be configured to do more - if they tried, the user's browser would reject them.
Cookies are, in fact, no more than the innocent lubricant without which the Web's machinery would come grinding to a halt. When you buy things online, a cookie is what makes your shopping basket function. When you return to the site to reorder the same things, a cookie is what tells the site which database record to access to call up details of your past orders. In fact, whenever you go online and experience any degree of personalized experience, a cookie is probably responsible. But, unless you have actively provided personal information to the site that placed the cookie on your computer, it can convey none.
The basic act of delivering a cookie to your computer and later accessing it never involves, and is intrinsically unable to involve, the gathering of any personally identifiable information about you. A tracking cookie can, indeed, be used to gather information about pages viewed on your computer (but only on sites with which that cookie is associated), and that information can be used to serve you ads or content that more closely match your interests - but the information gathered is completely anonymous and utterly untraceable to any individual.
The immediate beneficiaries of tracking cookies served by ad companies are, it's true, advertisers and publishers. But what does that mean? If advertisers are happy, publishers get paid. And if publishers get paid, they have the money to produce the high-quality content that attracts the visitors to their sites, who in turn attract the advertisers. Site visitors, then, are equal beneficiaries. But without the refinement in targeting made possible by the use of cookies, that advertising would be far less valuable and the quality of the content would inevitably suffer.
In fact, if cookies were crippled, you could expect that users trying to navigate the Web would be assaulted by a succession of permission-demanding dialogues, probably in the form of pop-ups, as they did so. Their progress would be slowed to a near halt and many sites would be rendered effectively unusable. The Web in its current form might well collapse, as users would be unable to reach the content and advertisers would be unable to reach the audiences that they each wanted.
At its most basic, it comes to this: Should Web sites remain mostly free and continue to get better? Or should cookies be crippled and the entire commercial sector of the Web be put at risk? My answer is that not only are cookies incredibly useful, but that accepting them on one's computer is the negligible payment one makes for a free service (i.e. the Web) of enormous richness and variety.
Monday, August 15, 2005
Wary Consumers Ward Off Tracking Cookies
The State of Online Measurement
By Seana Mulcahy
If you think the digital world represents a sliding landscape, it does. Part of the constant movement is measurement. Online tracking and analytics has been cooed at by most of us for over a decade now. We love to tell clients and prospects that we can track users from online advertising to search to e-mail and the like. We employ all sorts of third-party ad serving (3PAs), including filters, clicks, tracer tags et al. Our lunch hours, dinners, cocktail parties, boondoggles, seminars, and conferences are laden with talk of impressions, reach, frequency capping, click, and conversions.
If you are reading this you probably know I have been in this space since the first online ad was sold. What you may not know is that this is the same banter, rhetoric, and debate we've been having since 1994. Don't get me wrong. I'm not saying nothing has changed. Companies have built successful and profitable businesses within the space. Technology has advanced, but the market has splintered a bit. It seems like everyone is offering some sort of tracking and optimization service these days. Sites do it. Third-party ad servers have built businesses on it. Heck, even rich media companies offer it.
The world of tracking and measurement is so out of whack that marketers and advertisers don't want to pay for it. It's true. Look around. Sites offer pretty good metrics in regard to your campaigns. 3PAs have been beaten up so severely that they have been forced to succumb to offering dirt-cheap prices. Cost per thousand (CPM) pricing is at an all-time low for serving. Agencies threaten 3PAs by saying if they don't rate cut, they will get a lower price elsewhere, and they can. Rich media companies have some of the most robust tools offering metrics. Great you think? No, because of this stigma they have been giving it away. Now that "rich media" has become a de passé term (and all online ads should be "rich"), what do these companies do with all the tools and services they've built for reporting, tracking, and measurement?
Analytics are important, sometimes even critical - but are we splitting hairs? Do we track too much? Well this writer shouts YES from the top of her soapbox. I'm not saying chuck the whole concept. I'm urging advertisers and marketers to be smart about it. Tools and technology providers need to realize the value of what your company has and notice that you may have shot yourself in the foot by giving it away.
According to the 2004 DoubleClick Adserving Research Trend Report, there is still a debate in regard to how performance should be measured. Ad serving data confirms the idea that online advertising, just like advertising in all other media, has both direct and in-direct response potential. It is important to measure beyond the click. Publishers who sell on click performance are not getting the full value of the ad.
Geotargeting has been on the rise as have view-through and conversion tracking. Behavioral targeting is also on the rise.
So tell me what you think. Are we tracking too much? Are we looking at too many metrics? Perhaps we are looking at the wrong metrics? Post your opinions to the SPINboard. In the meantime, we'll be downloading boatloads of data into CSV formats trying to make strategic decisions about it.
By Seana Mulcahy
If you think the digital world represents a sliding landscape, it does. Part of the constant movement is measurement. Online tracking and analytics has been cooed at by most of us for over a decade now. We love to tell clients and prospects that we can track users from online advertising to search to e-mail and the like. We employ all sorts of third-party ad serving (3PAs), including filters, clicks, tracer tags et al. Our lunch hours, dinners, cocktail parties, boondoggles, seminars, and conferences are laden with talk of impressions, reach, frequency capping, click, and conversions.
If you are reading this you probably know I have been in this space since the first online ad was sold. What you may not know is that this is the same banter, rhetoric, and debate we've been having since 1994. Don't get me wrong. I'm not saying nothing has changed. Companies have built successful and profitable businesses within the space. Technology has advanced, but the market has splintered a bit. It seems like everyone is offering some sort of tracking and optimization service these days. Sites do it. Third-party ad servers have built businesses on it. Heck, even rich media companies offer it.
The world of tracking and measurement is so out of whack that marketers and advertisers don't want to pay for it. It's true. Look around. Sites offer pretty good metrics in regard to your campaigns. 3PAs have been beaten up so severely that they have been forced to succumb to offering dirt-cheap prices. Cost per thousand (CPM) pricing is at an all-time low for serving. Agencies threaten 3PAs by saying if they don't rate cut, they will get a lower price elsewhere, and they can. Rich media companies have some of the most robust tools offering metrics. Great you think? No, because of this stigma they have been giving it away. Now that "rich media" has become a de passé term (and all online ads should be "rich"), what do these companies do with all the tools and services they've built for reporting, tracking, and measurement?
Analytics are important, sometimes even critical - but are we splitting hairs? Do we track too much? Well this writer shouts YES from the top of her soapbox. I'm not saying chuck the whole concept. I'm urging advertisers and marketers to be smart about it. Tools and technology providers need to realize the value of what your company has and notice that you may have shot yourself in the foot by giving it away.
According to the 2004 DoubleClick Adserving Research Trend Report, there is still a debate in regard to how performance should be measured. Ad serving data confirms the idea that online advertising, just like advertising in all other media, has both direct and in-direct response potential. It is important to measure beyond the click. Publishers who sell on click performance are not getting the full value of the ad.
Geotargeting has been on the rise as have view-through and conversion tracking. Behavioral targeting is also on the rise.
So tell me what you think. Are we tracking too much? Are we looking at too many metrics? Perhaps we are looking at the wrong metrics? Post your opinions to the SPINboard. In the meantime, we'll be downloading boatloads of data into CSV formats trying to make strategic decisions about it.
Thursday, August 11, 2005
Taking the Cookie Case to Consumers: It Won't Be Easy
Taking the Cookie Case to Consumers: It Won't Be Easy
by Dave Morgan, Thursday, Aug 11, 2005 6:01 AM EST
AS AN INDUSTRY, WE HAVE spent much of the past month writing, talking, and blogging about the propriety of using browser cookies that track consumer behaviors to manage online advertising. We have also spent much of that time challenging commentators, such as The Wall Street Journal's Walt Mossberg, for the audacity to demand that our industry adopt a level of transparency and consumer consent that is far more stringent than the offline world follows, where highly personal information is routinely bought, sold, and lost by banks, credit card companies, grocery stores, and telephone companies.
While I would love to continue the academic discussion, I am ready to move on. Walt Mossberg has convinced me. It is time that we are straight with consumers. We should give them full transparency not because we have to, but because we should. It will strengthen the bond that online media and advertisers have with consumers, and it will serve us well over the long term.
We should take the same approach to consumer privacy that we are taking to ad measurement. This week, we have seen the first major online publishers comply with the IAB's new ad measurement guidelines, with the announcement that Yahoo!, CNET, Univision, and Weather.com will now only count ad impressions when they can verify that the consumer received the full download of the ad. They didn't have to do this--they did it because it will make the advantages of online advertising even better for advertisers. How will we go straight here? I am not sure, but I know that it won't be easy. Let me explain why.
I have talked to dozens of publishers over the past 10 years about how to better communicate their cookie practices to consumers. While most publishers either want or are willing to communicate more, the complexity of today's content and ad delivery systems makes the accomplishment of that goal quite onerous.
Most large content sites today deliver dynamic content from multiple servers distributed across the Internet, with many of those servers operating in different domains. This is one reason cookies are used--to keep the various bits of content "in state" with each other and with the user's browser. For example, a site's primary content may come from servers in its "newspaper.com" domain, which will set or read several cookies from its content servers and related Web services that use the same domain. The site may also publish syndicated content--maybe from Weather.com--which will set cookies from their domains as they deliver content.
At the same time, the site's ad server will set several cookies to manage the delivery and coordination of creatives for each ad position, in its own domain. That's where the ad content comes from, and the ad's deliveries must be coordinated across dozens of sites for each campaign. The site's traffic statistics and analytic system will set a cookie, out of its domains, in an attempt to accurately determine the number of page views and unique visitors that the site has. Each advertiser and agency involved in each campaign may have its own ad server, which could mean that there will be four or five per page. Each will likely set its own cookie, so that they can each determine the unique reach of their campaigns or to cap the frequency of their different creative units. Finally, the site may be using a behavioral targeting system, which will deliver a cookie to filter the ads that are delivered to the user according to make them relevant.
The challenge is to communicate what is happening to consumers without annoying them. While it is true that most users do not read privacy policies--where they are informed of these policies--it is virtually impossible to prompt the user each and every time one of these cookies is set.
One response to the issue could be to provide all users with a one-time notice to explain all of this--not unlike the type of information provided when requiring users to register--but it would need to be done with a pop-up or interstitial, which are unpopular with users. Plus, the only way to know if the user has already seen and consented to the notice, so that they are not bothered multiple times, is to use cookies to remember the user.
Another thought is for sites to do an ongoing general information campaign on what cookies are used and how. The content could be provided in both editorial form and through "house" ad space. In coordination with that effort, sites could make their privacy policies more noticeable, with some of the critical privacy information appearing directly on the content pages and not just on a deep jump page.
Finally, there is discussion in the industry to create a "white list" of cookies that follow certain best practices and to communicate this list to consumers through the Web publishers. This list would also be coordinated with the distributors of anti-spyware software, so that the cookies could be flagged in a certain way.
While it may not be clear which path is best, I believe that it is time to take a walk down one. It is no longer acceptable to say that what our industry does is less invasive than what other traditional media and direct marketers do; we can do more. The long-term winners in advertising and media will be those able to garner and protect consumer trust. The winners will be those with whom consumers are happy to share information in exchange for better and more relevant content, including ads. That is our future, so let's start figuring out how to get there.
by Dave Morgan, Thursday, Aug 11, 2005 6:01 AM EST
AS AN INDUSTRY, WE HAVE spent much of the past month writing, talking, and blogging about the propriety of using browser cookies that track consumer behaviors to manage online advertising. We have also spent much of that time challenging commentators, such as The Wall Street Journal's Walt Mossberg, for the audacity to demand that our industry adopt a level of transparency and consumer consent that is far more stringent than the offline world follows, where highly personal information is routinely bought, sold, and lost by banks, credit card companies, grocery stores, and telephone companies.
While I would love to continue the academic discussion, I am ready to move on. Walt Mossberg has convinced me. It is time that we are straight with consumers. We should give them full transparency not because we have to, but because we should. It will strengthen the bond that online media and advertisers have with consumers, and it will serve us well over the long term.
We should take the same approach to consumer privacy that we are taking to ad measurement. This week, we have seen the first major online publishers comply with the IAB's new ad measurement guidelines, with the announcement that Yahoo!, CNET, Univision, and Weather.com will now only count ad impressions when they can verify that the consumer received the full download of the ad. They didn't have to do this--they did it because it will make the advantages of online advertising even better for advertisers. How will we go straight here? I am not sure, but I know that it won't be easy. Let me explain why.
I have talked to dozens of publishers over the past 10 years about how to better communicate their cookie practices to consumers. While most publishers either want or are willing to communicate more, the complexity of today's content and ad delivery systems makes the accomplishment of that goal quite onerous.
Most large content sites today deliver dynamic content from multiple servers distributed across the Internet, with many of those servers operating in different domains. This is one reason cookies are used--to keep the various bits of content "in state" with each other and with the user's browser. For example, a site's primary content may come from servers in its "newspaper.com" domain, which will set or read several cookies from its content servers and related Web services that use the same domain. The site may also publish syndicated content--maybe from Weather.com--which will set cookies from their domains as they deliver content.
At the same time, the site's ad server will set several cookies to manage the delivery and coordination of creatives for each ad position, in its own domain. That's where the ad content comes from, and the ad's deliveries must be coordinated across dozens of sites for each campaign. The site's traffic statistics and analytic system will set a cookie, out of its domains, in an attempt to accurately determine the number of page views and unique visitors that the site has. Each advertiser and agency involved in each campaign may have its own ad server, which could mean that there will be four or five per page. Each will likely set its own cookie, so that they can each determine the unique reach of their campaigns or to cap the frequency of their different creative units. Finally, the site may be using a behavioral targeting system, which will deliver a cookie to filter the ads that are delivered to the user according to make them relevant.
The challenge is to communicate what is happening to consumers without annoying them. While it is true that most users do not read privacy policies--where they are informed of these policies--it is virtually impossible to prompt the user each and every time one of these cookies is set.
One response to the issue could be to provide all users with a one-time notice to explain all of this--not unlike the type of information provided when requiring users to register--but it would need to be done with a pop-up or interstitial, which are unpopular with users. Plus, the only way to know if the user has already seen and consented to the notice, so that they are not bothered multiple times, is to use cookies to remember the user.
Another thought is for sites to do an ongoing general information campaign on what cookies are used and how. The content could be provided in both editorial form and through "house" ad space. In coordination with that effort, sites could make their privacy policies more noticeable, with some of the critical privacy information appearing directly on the content pages and not just on a deep jump page.
Finally, there is discussion in the industry to create a "white list" of cookies that follow certain best practices and to communicate this list to consumers through the Web publishers. This list would also be coordinated with the distributors of anti-spyware software, so that the cookies could be flagged in a certain way.
While it may not be clear which path is best, I believe that it is time to take a walk down one. It is no longer acceptable to say that what our industry does is less invasive than what other traditional media and direct marketers do; we can do more. The long-term winners in advertising and media will be those able to garner and protect consumer trust. The winners will be those with whom consumers are happy to share information in exchange for better and more relevant content, including ads. That is our future, so let's start figuring out how to get there.
Tuesday, August 2, 2005
Wary Consumers Ward Off Tracking Cookies
NEW YORK For the Internet industry, a brewing consumer backlash against cookies triggers flashbacks to the privacy battles of Web advertising's early days in the 1990s. Now, with more privacy threats and easier tools for ditching cookies, a growing number of consumers are reacting against marketers tracking their Web behavior.
If the backlash against cookies continues, it could impede advances in ad targeting and accountability, according to industry experts. Behavioral targeting, for instance, is widely considered one of the most promising advances taking shape for Web advertising, but it requires cookies to track browsing habits.
"I think we ignore this at our own peril," said Trevor Hughes, executive director of the Network Advertising Initiative, which sets Internet cookie standards for marketers. "We need to realize there are still concerns in the marketplace, and respect those concerns."
Estimates vary on how widespread cookie deletion is. Jupiter Research estimates 39 percent of Web users delete cookies monthly, and other estimates put the figure as high as 50 percent. Blocking of third-party cookies has risen from 2.4 percent in January 2004 to 13.2 percent this past June, according to WebTrends, a Net analytics firm. The end result, according to agency executives, is that it is more difficult to target ads and track results-the capabilities driving ad money from traditional media to online.
For now, the damage from deleted cookies is manageable for Web marketers, said TS Kelly, vp and director of research and insight at the Havas-owned Media Contacts agency. Advertisers' frequency and reach numbers are still accurate. And since most direct-response ads are acted on within a month, advertisers can still measure their returns-certainly better than traditional media, Kelly added. The biggest impact Media Contacts has seen is for high-consideration goods such as cars and travel, which have longer sales cycles that can make it difficult to gauge the effect of online ads on conversions.
Industry executives said causes of the anti-cookie backlash are varied. Consumers in general are more sensitive to data-protection issues in the aftermath of highly publicized information breaches. The rise of spyware, phishing and viruses has contributed to a growing sense of online dangers, which is stoked in some cases, executives charge, by companies that provide software to combat such threats. Industry trade groups are mulling how to explain cookies' good points to consumers. The Interactive Advertising Bureau has convened a task force to tackle the issue. It is sifting through the conflicting cookie deletion and blocking reports to get a handle on the problem before recommending a course of action, said Greg Stuart, the IAB's CEO. "There's a lot of misunderstanding," he said.
--Brian Morrissey
If the backlash against cookies continues, it could impede advances in ad targeting and accountability, according to industry experts. Behavioral targeting, for instance, is widely considered one of the most promising advances taking shape for Web advertising, but it requires cookies to track browsing habits.
"I think we ignore this at our own peril," said Trevor Hughes, executive director of the Network Advertising Initiative, which sets Internet cookie standards for marketers. "We need to realize there are still concerns in the marketplace, and respect those concerns."
Estimates vary on how widespread cookie deletion is. Jupiter Research estimates 39 percent of Web users delete cookies monthly, and other estimates put the figure as high as 50 percent. Blocking of third-party cookies has risen from 2.4 percent in January 2004 to 13.2 percent this past June, according to WebTrends, a Net analytics firm. The end result, according to agency executives, is that it is more difficult to target ads and track results-the capabilities driving ad money from traditional media to online.
For now, the damage from deleted cookies is manageable for Web marketers, said TS Kelly, vp and director of research and insight at the Havas-owned Media Contacts agency. Advertisers' frequency and reach numbers are still accurate. And since most direct-response ads are acted on within a month, advertisers can still measure their returns-certainly better than traditional media, Kelly added. The biggest impact Media Contacts has seen is for high-consideration goods such as cars and travel, which have longer sales cycles that can make it difficult to gauge the effect of online ads on conversions.
Industry executives said causes of the anti-cookie backlash are varied. Consumers in general are more sensitive to data-protection issues in the aftermath of highly publicized information breaches. The rise of spyware, phishing and viruses has contributed to a growing sense of online dangers, which is stoked in some cases, executives charge, by companies that provide software to combat such threats. Industry trade groups are mulling how to explain cookies' good points to consumers. The Interactive Advertising Bureau has convened a task force to tackle the issue. It is sifting through the conflicting cookie deletion and blocking reports to get a handle on the problem before recommending a course of action, said Greg Stuart, the IAB's CEO. "There's a lot of misunderstanding," he said.
--Brian Morrissey
Monday, August 1, 2005
In 'cookie' fight, it's not clear who's winning
NEW YORK Internet users are taking back control of their computers, and online marketers and publishers are not pleased. But they do not quite know what to do about their conundrum - if it is a conundrum, since they cannot even agree on that.
Until recently, Internet businesses could track their users freely, using so-called cookies, tiny text files they secretly embed on the surfer's hard drive. Now, with the proliferation of antispyware programs that can delete unwanted cookies, they often cannot tell who has been to their Web site or what they have seen. And this erosion of control over a tool for gaining insight into consumer behavior has many of them fretting.
"Cookies are critical from a business perspective," said Lorraine Ross, vice president of sales at USAToday.com. "They help us do things like track our profitability per unique visitor, for instance. But if you don't know how many people are coming in, you don't really have a handle on whether your profitability is improving or not."
This anticookie fervor also hurts the deleters, she says. For example, cookies help a computer limit how many times the user is exposed to annoying ads like a floating, animated message. Such "frequency caps," to use industry parlance, are common among publishers. "So cookies are a really good thing for managing the user's experience," she said.
Last year, though, Ross said executives within USAToday.com, which is owned by Gannett, debated how effective their frequency caps were, since a growing number of Internet users were deleting cookies and possibly seeing a surfeit of animated ads.
Ross pointed out that like most established companies, USAToday.com does not use its cookies to identify its users. "But the user's paranoia is understandable, given the history," she said.
No kidding. Cookies first got a bad name in 1999, when DoubleClick, the Web advertising company, announced that it would use them to identify Internet users and analyze both their offline purchasing patterns and online surfing habits for the stated purpose of showing them more relevant online ads. That plan died a loud, painful death after privacy advocates caught wind of it, and marketers and publishers have taken a much more cautious approach ever since.
Even so, privacy advocates deplore cookies and, as antispyware programs like Webroot Spy Sweeper and McAfee Anti-Spyware have come on the market, surfers by the millions are apparently knocking them out of service as fast as they can be installed. This spring, the online consulting firm Jupiter Research published a report saying that 39 percent of Internet users it surveyed had regularly erased cookies.
"I don't think cookies should be out there at all, but the good news here is that consumers are at least becoming more sophisticated about the appropriate use of cookies," said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington.
Eric Peterson, the analyst who wrote the Jupiter report, pointed out that most of those deleted tracking applications were so-called "third-party" cookies that are placed on the computer by a company other than the site the user visits. Most publishers rely on outside companies like DoubleClick to send ads to the user's computer and track the effectiveness of the campaign.
Antispyware programs often leave in place first-party cookies but remove third-party cookies, the main target of the users' ire. Some people, like Rotenberg, think that total anonymity is the way to go.
The threat to the bottom line is real. Peterson said cookies not only help sites measure overall profitability but are also critical in measuring the effectiveness of individual advertising campaigns. Marketers, for instance, could conceivably pay a Web site to deliver ads to 100,000 people but only reach about 60,000 because so many of them were being counted twice.
"If you're O.K. with getting your ads to half as many people, and not really being sure how effective your campaign was, well, then you can happily put your head in the sand," Peterson said. "Most people tell us they want data more accurate than that."
But are that many people really blocking cookies? Some executives are not so sure.
"When I talk to publishers, nobody says the problem is as big as the press suggests," said Greg Stuart, chief executive of the Interactive Advertising Bureau, an industry trade group. "So our role should be to get to some factual basis." Stuart said his organization is in the midst of planning its own research into the issue, because, he said, much of the recent research "involves asking consumers about what they did, which isn't always a good indicator of their behavior."
Another doubter is Peter Naylor, the senior vice president of sales for iVillage, a network of women's sites. "I don't think the problem is real, based on what we're seeing, or more importantly not seeing," he said.
Naylor said he has not conducted tests or surveys to determine if his company's visitors were deleting or blocking cookies, "but nothing has changed dramatically enough to raise a red flag. And I've heard literally nothing about it from advertisers."
Among those companies fielding the most calls about cookie deletion are advertising technology businesses like Atlas, an online market research company. Young-Bean Song, the director of analytics for Atlas, said that even if the cookie deletion rates were as high as 40 percent, publishers and marketers could still rely on the data from the other 60 percent of the site's users to gauge the effectiveness of their advertising campaigns and other important statistics.
Perhaps because executives cannot agree on the scope of the problem, solutions have been slow to emerge. Stuart, from the Interactive Advertising Bureau, said that if the issue turns out to be as big as some suspect, his organization would likely embark on an advertising campaign to convince online users that cookies are not harmful.
Ross, the USAToday.com vice president, says the real solution is to overcome consumer hostility to what she regards as a legitimate business practice that makes life easier for everybody.
"We have to think about long-term answers," she said. "We need to have users love their cookies, for the right reasons."
Until recently, Internet businesses could track their users freely, using so-called cookies, tiny text files they secretly embed on the surfer's hard drive. Now, with the proliferation of antispyware programs that can delete unwanted cookies, they often cannot tell who has been to their Web site or what they have seen. And this erosion of control over a tool for gaining insight into consumer behavior has many of them fretting.
"Cookies are critical from a business perspective," said Lorraine Ross, vice president of sales at USAToday.com. "They help us do things like track our profitability per unique visitor, for instance. But if you don't know how many people are coming in, you don't really have a handle on whether your profitability is improving or not."
This anticookie fervor also hurts the deleters, she says. For example, cookies help a computer limit how many times the user is exposed to annoying ads like a floating, animated message. Such "frequency caps," to use industry parlance, are common among publishers. "So cookies are a really good thing for managing the user's experience," she said.
Last year, though, Ross said executives within USAToday.com, which is owned by Gannett, debated how effective their frequency caps were, since a growing number of Internet users were deleting cookies and possibly seeing a surfeit of animated ads.
Ross pointed out that like most established companies, USAToday.com does not use its cookies to identify its users. "But the user's paranoia is understandable, given the history," she said.
No kidding. Cookies first got a bad name in 1999, when DoubleClick, the Web advertising company, announced that it would use them to identify Internet users and analyze both their offline purchasing patterns and online surfing habits for the stated purpose of showing them more relevant online ads. That plan died a loud, painful death after privacy advocates caught wind of it, and marketers and publishers have taken a much more cautious approach ever since.
Even so, privacy advocates deplore cookies and, as antispyware programs like Webroot Spy Sweeper and McAfee Anti-Spyware have come on the market, surfers by the millions are apparently knocking them out of service as fast as they can be installed. This spring, the online consulting firm Jupiter Research published a report saying that 39 percent of Internet users it surveyed had regularly erased cookies.
"I don't think cookies should be out there at all, but the good news here is that consumers are at least becoming more sophisticated about the appropriate use of cookies," said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington.
Eric Peterson, the analyst who wrote the Jupiter report, pointed out that most of those deleted tracking applications were so-called "third-party" cookies that are placed on the computer by a company other than the site the user visits. Most publishers rely on outside companies like DoubleClick to send ads to the user's computer and track the effectiveness of the campaign.
Antispyware programs often leave in place first-party cookies but remove third-party cookies, the main target of the users' ire. Some people, like Rotenberg, think that total anonymity is the way to go.
The threat to the bottom line is real. Peterson said cookies not only help sites measure overall profitability but are also critical in measuring the effectiveness of individual advertising campaigns. Marketers, for instance, could conceivably pay a Web site to deliver ads to 100,000 people but only reach about 60,000 because so many of them were being counted twice.
"If you're O.K. with getting your ads to half as many people, and not really being sure how effective your campaign was, well, then you can happily put your head in the sand," Peterson said. "Most people tell us they want data more accurate than that."
But are that many people really blocking cookies? Some executives are not so sure.
"When I talk to publishers, nobody says the problem is as big as the press suggests," said Greg Stuart, chief executive of the Interactive Advertising Bureau, an industry trade group. "So our role should be to get to some factual basis." Stuart said his organization is in the midst of planning its own research into the issue, because, he said, much of the recent research "involves asking consumers about what they did, which isn't always a good indicator of their behavior."
Another doubter is Peter Naylor, the senior vice president of sales for iVillage, a network of women's sites. "I don't think the problem is real, based on what we're seeing, or more importantly not seeing," he said.
Naylor said he has not conducted tests or surveys to determine if his company's visitors were deleting or blocking cookies, "but nothing has changed dramatically enough to raise a red flag. And I've heard literally nothing about it from advertisers."
Among those companies fielding the most calls about cookie deletion are advertising technology businesses like Atlas, an online market research company. Young-Bean Song, the director of analytics for Atlas, said that even if the cookie deletion rates were as high as 40 percent, publishers and marketers could still rely on the data from the other 60 percent of the site's users to gauge the effectiveness of their advertising campaigns and other important statistics.
Perhaps because executives cannot agree on the scope of the problem, solutions have been slow to emerge. Stuart, from the Interactive Advertising Bureau, said that if the issue turns out to be as big as some suspect, his organization would likely embark on an advertising campaign to convince online users that cookies are not harmful.
Ross, the USAToday.com vice president, says the real solution is to overcome consumer hostility to what she regards as a legitimate business practice that makes life easier for everybody.
"We have to think about long-term answers," she said. "We need to have users love their cookies, for the right reasons."
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