Making the Cookie Case to Consumers

Cookies were a big topic last week, with the release of a Jupiter Research (a Jupitermedia Corp. division) report on the topic. Web sites and online service providers place these small text files on consumers’ browsers to enable them to execute functions ranging from personalizing Web pages and recognizing returning visitors to tracking consumers’ paths and frequency-capping ads.

In a study of consumers’ treatment of cookies on their browsers, Jupiter Research’s analysts determined almost 40 percent of Internet users delete their cookies on a monthly basis, and a number of important analytic and advertising systems that site owners rely on are losing their effectiveness as a result. Most at risk, according to the report, are so-called third-party cookies — the ones placed by service companies such as agency ad servers and many Web analytics providers. These companies operate their services and deliver cookies from domains other than the Web site visited.

Industry pundits have raised a number of questions about the true size and extent of the phenomenon and proffer a variety of theories on the potential causes and effects. Most in the industry, however, agree it’s a serious issue that begs for a solution before it gets worse.

The problem has been brewing for some time. For over three years, Internet Explorer has had sophisticated cookie management capabilities. It’s specifically identified third-party cookies as posing a higher degree of personal privacy risk than first-party cookies, although virtually no companies put personal data in cookies. Most recently, and probably of greatest concern, is many of the companies that sell anti-spyware software to consumers include cookies on their lists of “spyware” applications. This has significantly raised cookies’ visibility with consumers, placing them in a less-than-favorable light with many.

Fewer Cookies Create Plenty of Issues

What are the potential effects of fewer cookies being maintained on consumers’ browsers? Plenty. Many Web site convenience features consumers have come to value could cease to function, such as personalized greetings, stored user names and passwords, saved shopping carts, and frequency caps on certain types of ads. Much of the functionality that makes online media and marketing special and differentiates it from traditional offline channels, such as targeting, interactivity, and extraordinary measurability, could be severely hampered.

Many of these effects will only be a matter of degrees. For some Web sites and service providers, there could be little or no effect at all. As Jupiter Research notes, much cookie deletion only occurs monthly. Those services for which cookie recency is most of the value, such as behavioral ad targeting, ad frequency capping, and shopping cart management, the effect might be minimal. In addition, many Web sites have developed deeper relationships with their visitors and have registration gateways or other personalized services loyal visitors use. This permits them to recognize return visitors and potentially reset user cookies with their original values.

Potential Solutions

Web site owners, marketers, and their service providers must recognize this as an important issue. They must confront it and develop and implement strategies to deal with it. There are a number of existing potential solutions:

• Create real consumer value. Make maintaining cookies more attractive to consumers. If you want users to keep their cookies, give them something in return, such as personalized content or conveniences that can only be accessed with the appropriate cookies in place. If you value ad targeting, make delivering ads people want a priority. There are few better ways to create real value in this market than to increase ad relevance and reduce ad clutter on pages.
• Reach out to anti-spyware software vendors. Affected companies and corresponding trade organizations can organize outreach programs to anti-spyware companies and their distributors. Ensure consumer communication is accurate, cookies are properly classified in their applications, and appropriate vendor communication and grievance procedures are in place.
• Modify Web site user agreements. Make maintaining critical cookies an explicit part of the user agreement for accessing a site and its content. True, this may have little direct effect with consumers. But depending on where agreement terms are placed on the site, it could provide leverage with software companies that are declaring your operational cookies spyware.
• Explore technical alternatives. The Jupiter Research report recommends exploring alternatives to third-party cookies and cookies in general. Among its suggestions: Web analytics providers should deliver their services entirely through first-party domains. Though more complicated and expensive, many service providers do this already, particularly in ad serving and behavioral ad targeting. It also suggests companies explore other addressable, browser-specific technologies, such as Macromedia Flash, which are ubiquitous on browsers and can be used to deliver cookie-like functionality.
• Make the case with consumers. Want consumers to keep your cookies? Talk to them and make your case. All the other steps will have little or no value if Web sites, marketers, and online service providers don’t take the critical step of communicating actual, explicit benefits of keeping cookies on browsers. Consumers must understand what cookies do and what they don’t do. They must understand what they’ll gain from their keeping cookies and what they’ll lose by deleting them. They must understand the business models of the free Web sites and content they enjoy, so they can appreciate what they stand to lose if online advertising is impaired on those sites.

The best and most important strategy is to take the issue directly to consumers and make it issue more than just cookies. We must make the case for all online advertising and marketing. Articulate the benefits consumers derive from our industry loudly and repeatedly. Show cookies as just a small, rather innocuous cog in that larger strategy. Demonstrate that online services can uniquely deliver the news and information they want and need, when and how they want and need it. Prove we can give consumers the specific advertising they want and need, not just generic ads that are mindlessly pushed or broadcast to them like most offline media do.

This is the era of consumers. They’re in charge. Let’s respect that, and make our case to them directly.