By now you’ve probably heard about the latest report from Jupiter Research -- concluding that two out of five internet users delete their cookies from their browser. Like most stats that make one's eyes pop out, this one was a bit hard to fathom. Seth Godin penned an insightful blog rant regarding the validity of the data. I agree with much of Seth’s logic, and perhaps he has a point. Yes, it is extremely difficult to believe that 40 percent of internet users are knowledgeable enough to know how to delete their cookies.
But perhaps the real takeaway from this study is this -- two in five consumers seem to believe that cookies are inherently bad things and that they need to be removed. The exact percentage of consumers who have gone so far as to figure out HOW to remove them is somewhat beside the point. If a significant (and growing) minority of consumers feel that cookies invade their privacy, then their figuring out how to remove their cookies is only a matter of time.
Do you remember the recent fury over HR 29 (The Spy-Act)? As you probably know, the original version of HR 29 could have outlawed third-party cookies. And many in the industry had predicted that it would signal the end of third-party ad serving, behavioral targeting, and email marketing as viable business models. So apparently, what the framers of the Spy-Act have given back to us, consumer sentiment has taken away.
Is any of this making you pine for the return of Interadnet, the cookie-less ad-serving company that came and went a few years ago.
As a publisher or marketer, what do you do about it? Without cookies (or some other non-PII identifying technology), it becomes exponentially more difficult to deliver ads which are relevant to consumer tastes. And while encouraging site registration and using first-party cookies might make things a bit easier on publishers, it doesn’t really help all the advertisers, third-party ad servers, email marketers or analytics companies. Moreover, the very same privacy issues that they have with cookies might make consumers less willing to provide their personal information to a website during registration.
I’ve looked at a good deal of research over the past year. Consumer research conducted by Forrester, Yankelovich, Ponemon, as well as my own firm’s research have concluded that consumers feel bombarded by ad clutter while surfing the web. Ironically, the silver bullet to problems of ad clutter was supposed to lay in the very information collected in cookies: information about what sites a user visits, and the pages he views; information about the products he has purchased and the searches he has conducted. All this information was supposed to be captured in cookies, and used to deliver more relevant ads. But now, as a result of cookie blockers, and consumer-initiated cookie deletions, all that seems in jeopardy. In fact, assuming Jupiter’s results are anywhere near correct, this could be as large a problem for the online industry as the data scandals are proving to be for the offline data world.
How did we get here?
The problem is a huge one, and goes back several years, to the inception of the internet as a consumer medium. Since day one, consumers have wanted their online experience to be relatively free from advertising and free of charge. They want to be able to read the content for free, but they have a fairly low tolerance for the advertising that pays for the content. They want the free piece of software, but aren’t necessarily interested in viewing additional ads in exchange for that software. And as this report bears out, many are reluctant to share any of their data with marketers and publishers -- even non-personally identifiable data.
Back in the golden era of television, advertisers did a very wise thing. They spent time educating consumers on the value proposition of television. In other words, they’d say something like: “We’re going to show you 15 minutes of this really funny guy named Milton Berle. And in exchange for that content, you agree to actively watch this important message from our sponsor Maytag, who will tell you about this wonderful new invention called the automatic dish washer -- it’ll change your lives!”
For a whole host of reasons, we in the online world have never been able to get consumers to embrace the idea that there’s a value exchange between content and advertising. And until that happens, we’re going to be stuck in a spiral created by intrusive, irrelevant ads, and consumers increasingly tuning those ads out.
Interadnet, where art thou?
Alan Chapell is president of Chapell & Associates, a consulting firm that helps companies understand privacy and incorporate consumer perception into product development. He has been in the interactive space for more than seven years with firms such as Jupiter Research, DoubleClick and Cheetahmail. Mr. Chapell is the New York chapter co-chair of the International Association of Privacy Professionals, publishes a daily blog on issues of consumer privacy, and will be teaching a class on privacy and marketing at NYU this summer.