August 1, 2005, 12:00 AM

Crumbling

(Page 2 of 2)

Jupiter is advising retailers to work with their vendors to quantify the deletion effect, giving them a starting point for those calculations. “You’re dealing with a sample but very few companies have a good idea of how large that sample is,” Peterson says. “They don’t know if it’s 39% or 25% or 15% of people deleting cookies on a monthly basis. Unless they know those numbers, they can’t very well do the statistics and figure out how things really look.”

Peterson says he envisions a day when a company or an organization like the Interactive Advertising Bureau publishes cookie deletion rates for different vertical markets, such as online retail, travel or financial services. “Marketers can then use those published rates to better understand how their advertising dollars are really spent,” he says.

Others believe cookies continue to be reliable tools, because retailers still are getting large enough data samples to produce valid results. “Even if the world is as Jupiter paints it, it doesn’t mean it’s the end of the world and it doesn’t mean people can’t rely on their conversion reporting, or their behavioral targeting or reach and frequency reports,” says Young-Bean Song, director of analytics for Atlas Institute, which serves ads and tracking pixels for more than 1,000 advertisers across thousands of sites.

In fact, a recent study by Atlas Institute, whose services represent 100 billion impressions, clicks, and page-views each month, found that even though behavioral data confirms that people are deleting cookies on a regular basis, there are remarkable disparities between users’ responses to cookie deletion and their actual behavior. For example, four out of 10 respondents who claimed to delete their cookies weekly or monthly actually had cookie life spans of more than double their survey responses, Atlas says.

Atlas bases its reach and frequency analyses on stable and long-lived cookies, rather than on every cookie in a log file, according to Song. “It’s basically sampling methodology, but you’re still talking about enormous samples of tens of millions of cookies,” he says. “There’s still a lot of very valid, solid cookie data.”

The short-term metric

Even short-lived cookies can be useful, Song says. “In a world where people are deleting their cookies once a week, the type of metrics marketers really care about are still valid and you’re going to capture the majority of the behavior there,” he says. For example, Atlas’ time-to-convert analysis has consistently found that between 70% and 90% of conversions occur within a 24-hour window of the corresponding click or impression.

Nevertheless, while some see a continuing role for cookies, others are looking for replacement techniques for tracking users. One alternative to using cookies is requiring visitors to log in or register before entering a site, a model once used by many retailers, Peterson says. When executed well, a user’s unique identifiers can be passed on to most web measurement applications, he says.

But this might not be a good option for retailers because many consumers don’t want to register or create an account with an online merchant, Peterson says. “If the driving force is accuracy and visitor counts, then it’s a good idea to do,” he says. “But if your driver is to sell more, it probably just creates an impediment, in which case you would want to opt for the revenue over the accuracy.”

Some hold out hope they can convince consumers of the value of cookies. But that will take an orchestrated campaign by online providers-such as content publishers Yahoo, MSN and AOL-that have close relationships with their customers and, therefore, the best chance of building trust, Song says.

Halting the war

One such industry effort is Safecount.org, an organization of agencies, advertisers, publishers, and technology companies whose goal is to develop accurate online measurement practices that protect the privacy and security of consumers. On its site, Safecount.org states that it “wants to prevent a cold war with consumers and find a middle ground.”

The newly created group plans to audit companies, compiling a list of those using all the best practices associated with online data collection, says Song, a member. The group also plans to educate the public and government about the benefits of online measurement such as cookies, Song says. Safecount has not released any details on those education campaigns.

Meanwhile, online retailers will have to learn to operate in an environment where cookie-based data is suspect. “Unless something can shift the consumer mindset away from voting in favor of privacy and voting against cookies, marketers and advertisers are just going to have to get used to the situation,” Peterson says. l

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