Jupiter: Cookie Cutting Affects Advertisers

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Advertisers will have to alter how they measure online ad campaigns after a new survey shows that a high percentage of consumers deletes cookies.

In 2004, 58 percent of online users deleted cookies, according to a report from JupiterResearch, a division of Jupitermedia Corp., New York. Thirty-eight percent of consumers still think that cookies are "an invasion of privacy and security online," the report said, and many think they do not enhance their experience on Web sites.

"This behavior cripples sites' ability to track users and make critical marketing measurements, such as the number of returning visitors, multi-session campaign conversion and lifetime value," the report said.

While advertisers and site operators assume that consumers appreciate cookies' ability to personalize their Web experience, the JupiterResearch survey found that 42 percent doubt that cookies "positively contribute to site personalization efforts."

A major reason for the cookie-deleting trend is consumers' increasing use of anti-spyware software. Fifty-eight percent used such software in the past year, and another 41 percent used a firewall.

"Many of these applications block third-party cookies by default, and many more will regularly delete cookies from consumers' computers," the report said.

Still, 52 percent of users take time to delete cookies themselves. Seventeen percent of consumers deleted cookies weekly (either manually or automatically via software), and 10 percent delete them daily, the report found.

Based on the high percentage of consumers deleting cookies, advertisers should alter their ROI measurement techniques, said Kevin Lee, chairman of search engine marketing firm Did-it.com, New York.

"Advertisers need to include a fudge factor," he said. "They need to get a handle on what percent of people they lose track of. If they lose track of 10 percent [because of cookie deletion], they should raise their ROI targets by 10 percent."

Serving of third-party ads -- sending users travel ads because they searched for travel information recently, for example -- also will be affected by the trend, because 28 percent of Web users selectively reject third-party cookies, according to JupiterResearch.

One company cited in the report said the number of Web site visitors blocking its third-party cookies has increased steadily in the past two years, from 14 percent in 2003 to 20 percent in 2005.

Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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