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.
Thursday, August 11, 2005
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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