Who Took the Cookies From the Behavioral Cookie Jar?

Who took the cookies from the cookie jar?
Consumers took the cookies from the cookie jar.
Who me?
Yes, you!
Not me! Couldn’t be.

Who would’ve thought there’d be a shared concern to the whereabouts of the cookies in this children’s rhyme and those in our industry.

Consumer cookie deletion and the corresponding online advertising implications are currently hot topics. They’ve been written about abundantly in the last weeks by various trade publications (including ClickZ). By now, you probably know Firefox has the capability to erase cookies with a click of the mouse. Then Jupiter Research (a Jupitermedia Corp. division) found 4 out of 10 Internet users delete cookies from their primary computer at least once a month. And a recent Ponemon Institute study finds 44 percent of U.S. consumers think online ads should be legally banned.

All these pieces raise one essential question: what will happen if the cookies really are gone?

Offer the Cookie Monster an Incentive

Online certainly isn’t the only cookie jar that tracks consumer behaviors and information. Large grocery chains and retailers such as Safeway and Wal-Mart have practiced data collection superbly, for decades. People sign up for membership cards that supposedly provide savings on purchases. We rarely hear privacy-intrusion complaints associated with these reward cards. Most consumers don’t even realize their beloved stores track their purchase behaviors and patterns; they’re just happy about the savings. And the Purina coupons printed on the backs of sales receipts are surprisingly useful after buying a big bag of cat litter.

So why is online being crucified for an age-old practice that’s used by other channels? Because permission to target isn’t free. There must be some kind of benefit (preferably monetary) associated with the exchange of information.

The July 2004 ChoiceStream survey finds over 60 percent of U.S. Internet users will spend 5 minutes or less answering questions regarding their interests in exchange for personalized content. This sounds like a perfect opportunity to offer incentives for providing self-disclosed data.

Perhaps we’re asking the wrong cookie-deletion question. Instead of, “Why are people deleting cookies,” we should ask, “How do we get them to allow cookies?”

There must be more general education and awareness pushed to consumers so they understand the somewhat counterintuitive increased privacy and relevant online experience cookies can provide them. Online should develop a more comprehensive incentive program for consumers so even the most diligent cookie sweepers will think twice before they hit the “delete” button.

Using the Subscription Model

If marketers can no longer monitor online consumer behaviors via cookies, maybe the answer isn’t to track and store data on the browser level. A feasible solution might be to simply shift tracking to publisher sites that offer subscription-based content to capture consumers’ personal information. Subscription doesn’t necessarily imply cost; consumers could certainly have free access to content with registration.

Publishers can then obtain user preferences and apply these self-disclosed (i.e., opt-in) interests as proxies for behavioral affinities in targeting. Since the registration process provides the targeting parameter, frequent or periodic user profile updates will allow sites to dynamically tailor the advertising to increase relevance and potentially match product purchase cycles.

Today, there are many successful subscription models. The Wall Street Journal Online, eBay, and, to a certain degree, Yahoo, all lucratively monetized and managed their audiences. The subscription model empowers sites to become more effective as marketing vehicles, since the sites “own” the consumers. It also significantly benefits consumers, because ads are more relevant as they’re matched back to users’ registered preferences.

The subscription model, however, will only benefit technology-based behavioral targeting vendors, such as Tacoda and Revenue Science (who work only with publishers with registration already in place). It’ll allow targeting outside of cookies and likely cripple the large ad networks that don’t necessarily own the sites they sell inventory on.

What Does This Mean for Online Media?

Consumers aren’t fully aware of cookies’ intrinsic value, nor how much they can improve the online experience. The privacy issue is certainly a valid concern, but it’s perhaps attributed to fear of the unknown rather than privacy protection.

To openly preach about cookies’ benefits probably sounds like “1984”-style propaganda. The solution might not be as simple as proposing some third-party measurement firm (e.g., Nielsen//NetRatings) completely manage all consumer data.

To battle consumer fear of privacy invasion, perhaps we need to make them an offer they can’t refuse. Humans, after all, are driven by two primal emotions: fear and desire. If the reward is right, people just may let marketers fill their cookie jars.

By the way, the same Ponemon study also finds some 66 percent of U.S. consumers say they would find banner ads less intrusive or annoying if the ads were more relevant. Looks like behavioral targeting is in the right business after all!