Analysis: Weekly Web Watch - Why the online marketers need to confess their love of 'cookies'

The companies that serve online advertising have over the past year started to take the profiling and targeting of Internet users to a new level. Ad networks, such as DoubleClick and 24/7, along with other media planning firms which serve ads, can now tell as soon as someone arrives on a site where it delivers ads, whether that person has visited one of their clients' sites in the recent past, and even which pages the person visited.

The companies that serve online advertising have over the past year started to take the profiling and targeting of Internet users to a new level. Ad networks, such as DoubleClick and 24/7, along with other media planning firms which serve ads, can now tell as soon as someone arrives on a site where it delivers ads, whether that person has visited one of their clients' sites in the recent past, and even which pages the person visited.

The companies that serve online advertising have over the past year started to take the profiling and targeting of Internet users to a new level. Ad networks, such as DoubleClick and 24/7, along with other media planning firms which serve ads, can now tell as soon as someone arrives on a site where it delivers ads, whether that person has visited one of their clients' sites in the recent past, and even which pages the person visited.

This is done by putting software onto the advertiser's site long before anyone looks at the advertising. This software then marks the computer of each visitor by placing a small file, known as a 'cookie,' on the visiting computer.

Cookies reveal nothing about the user other than what the advertiser and ad serving company know at that moment. For example, cookies can reveal if a customer has visited a site before, what products he or she did and did not find interesting, and what, if anything, was purchased.

When the Internet user subsequently visits a site where the same ad serving firm operates, the ad server will recognize any cookies previously deposited.

Users who had previously visited EddieBauer.com would be identified as potential Eddie Bauer customers, for instance. It then becomes obvious which ad to show that person, out of the many that could be served up.

For example, visitors who abandoned their virtual shopping cart at the last moment could be offered a special deal on sweaters.

Increasing the relevance of advertising in this way has been proven to lower the cost 'per desired user action' across an advertising campaign.

This is, of course, great for marketers. It should also be good news for consumers, since in theory people will see less irrelevant advertising.

It is far less invasive than DoubleClick's proposal to merge online behavior with offline catalog purchases, which sparked furor over privacy issues earlier this year.

However, these techniques are likely to blow up in the face of the online advertising industry as nobody is telling ordinary Web users that it is happening. Nobody is bothering to explain the benefits. And when the public does find out, it is going to come as a big surprise that their Web usage patterns can be known in such detail.

It doesn't matter that the information cannot be tied to anything personally identifiable. It doesn't matter that the information is completely innocuous.

The point is that people don't know this, and people feel threatened by what they don't know. By not being transparent, the online marketing and advertising industry is allowing consumer journalists and privacy advocates to draw a picture of Internet profiling and tracking as some sort of arcane, and threatening, magic. It is allowing marketers to be portrayed as 'the enemy'.

The answer is openness. It is not just a willingness to tell people something when they ask that's needed, but a desire to inform Web users before they ask, and sell them on the benefits. It needs to go beyond PR and public education, to build transparency into the software and the structure of the Web, in a way that is easy to see and understand. It will require the collaboration not only of the major ad networks and buyers, but also the big media owners and browser makers, primarily Microsoft, Netscape and AOL.

It's a big job, but failure will severely limit the options of online marketers in the future.



- Stovin Hayter is editor-in-chief of Revolution. He can be reached at stovin.hayter@revolutionmagazine.com.



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.