WebTrends Advises Sites to Move to First-Party Cookies Based on Four-Fold Increase in Third-Party Cookie Rejection Rates

Web analytics leader unveils accuracy best practices on top of industry’s only first-party cookie support for both software and hosted web analytics

PORTLAND, Ore., May 23, 2005 - WebTrends Inc., the global web analytics market share leader, today unveiled results of research it conducted on the increase of Internet users blocking third-party cookies. Commonly used by hosted web analytics services, third-party cookies track a site's unique visitors and their responses to marketing campaigns and web site promotions. In addition to the research, WebTrends has issued best practice recommendations as well as a series of product enhancements with the new version of WebTrends® 7, to deliver the most accurate and actionable analytics in the industry for precise decision-making.

While other recent industry research has focused predominately on rising cookie deletion rates, cookie rejection is a more serious issue. Rejection refers to visitors blocking cookies from ever being set on their machines, as opposed to deletion, which happens at some point after the individual has visited a site. Cookie rejection immediately affects the accuracy of all metrics rather than causing a gradual decline in the accuracy of reports spanning weeks or months.

WebTrends top-level findings indicate that across all industries, average third-party cookie rejection rates have increased more than four-fold in the last 16-months, from 2.84 percent of web site visitors in January 2004 to 12.4 percent in April 2005. The growth in this trend has leveled off since January 2005, and seems to have been primarily fueled by software that blocks third-party cookies, including personal firewalls, proxy servers, and available settings in the Windows XP Service Pack 2 release of Microsoft Internet Explorer.

WebTrends research indicates the following industry verticals are experiencing third-party cookie rejection at the following rates:

* Retail - 16.9%
* Telecom - 15.4%
* Healthcare - 14.7%
* Manufacturing -13.3%
* Transportation - 13.0%
* Technology - 12.4%
* Media - 12.1-%
* Insurance - 12.0%
* Services - 11.8%
* Travel/Hospitality - 11.8%
* Legal/Accounting - 10.6%

Effects of Cookie Rejection and Deletion

Both cookie rejection and cookie deletion result in a loss or distortion of essential metrics. Cookie deletion artificially inflates unique visitor counts and degrades repeat visitor metrics over time, since visitors who delete their cookies are incorrectly recognized as new visitors upon their return. The effects of cookie rejection typically result in the loss of unique and repeat visitor metrics and in some extreme cases, the web analytics system does not track the visit at all. Report distortion from cookie rejection is much greater if the web analytics solution heavily relies on cookies for purchase histories or campaign responses, or, as the solution's only method to sessionize visits.

Attaining Web Analytics Accuracy

A recent consumer survey from independent analyst firm, JupiterResearch, supports the growth in cookie rejection, citing 28 percent of Internet users as claiming they selectively reject third-party cookies (JupiterResearch, "Measuring Unique Visitors," March 10, 2005). Jupiter concludes that "site operators must move toward exclusive use of first-party cookies in data collection efforts."

"The growth in Internet users rejecting third-party cookies is certainly not something that can be ignored by analytics providers or the organizations that rely on those numbers to manage their businesses," said Greg Drew, WebTrends CEO and president. "Customers are counting on their web analytics vendors to adopt best practices for cookie-based measurement, including the use of first-party cookies and backup methods that don't rely on cookies for attaining the critical insights into visitor behavior and the performance of marketing campaigns that have proven to give companies a distinct online advantage."

Leveraging its long-standing 10 years expertise in software and five years with hosted web analytics, WebTrends now offers the most secure and broadest first-party cookie support in the industry for both software and hosted solutions, as well as fallback sessionization methods for unique visitor and visit-tracking that are completely independent of the use of cookies, including authenticated usernames, session IDs and IP+Agent.

Available at no additional charge, WebTrends unique first-party cookie management solution adheres to the best practices in the industry by enabling customers to use their own first-party cookie or automated solutions from WebTrends to add legitimate first-party cookie tracking, which allows them to retain ownership and management of their SSL certificates. Additionally, customers currently using third-party cookies won't lose any existing data as that information is automatically transferred to new first-party cookies. Customers can also opt for low-cost professional services designed specifically to help them implement first-party cookie tracking.

Businesses that are concerned about the accuracy of their web analytics due to the increasing percentage of visitors blocking third-party cookies, can access best practices information and a checklist for evaluating first-party cookie solutions at www.webtrends.com/upload/BB_1st_Party_Cookies_FINAL.pdf.

Methodology for WebTrends Cookie Research

WebTrends analyzed 16-months of data spanning 5 billion visitor sessions from the top trafficked web sites on its hosted On Demand service using third-party cookies, and calculated an average rejection rate for each month. The sites were then grouped according to Standard Industrial Classification (SIC) codes to produce the vertical-specific, third-party cookie rejection rates.

The exact number of visitors that block cookies from being set on their machines cannot be determined, precisely because they are rejecting cookies; for example, a single person visiting a particular website more than once will be recorded as a new visitor each time. However, WebTrends fallback IP+Agent sessionization provides an accurate picture of the trended growth in third-party cookie rejection, and allows site owners to compare the activities of cookied and non-cookied traffic to better estimate the total number of visitors that engage in this behavior.