Rising Cookie Rejection Bites Into MetricsMarketers assembled this week at the Ad:tech Chicago conference to discuss the finer points of online marketing must chew on the growing rejection of cookies.
As recent studies show, consumers increasingly resist the placement on their computers of cookies - small files that Web sites use to identify users and serve targeted online ads and copy.
A cookie rejection study from online analytics firm WebTrends Inc. found average third-party cookie rejection rates across all industries have risen more than fourfold in 16 months, from 2.84 percent of online visitors in January 2004 to 12.4 percent in April 2005.
"The effects of cookie rejection typically result in the loss of unique and repeat visitor metrics, and in some cases the Web analytics system does not track the visit at all," said Jeff Seacrist, director of product marketing at WebTrends, Portland, OR.
"Report distortion from cookie rejection is much greater if the Web analytics solution relies heavily on cookies for purchase histories or campaign responses or as the solution's only method to sessionize visits," he said.
WebTrends' study is distinct from others that focus on growing cookie deletion rates, even though cookie rejection should cause more alarm. Rejection refers to visitors blocking cookies from ever being set on their machines, while deletion occurs after the consumer has visited a site.
While cookie rejection rates have leveled off since January, WebTrends finds the trend itself is fueled mainly by software that blocks third-party cookies. This includes personal firewalls, proxy servers, anti-spyware software and available settings in the Windows XP Service Pack 2 release of Microsoft's Internet Explorer browser.
The retail sector, at a 16.9 percent rate, is the leading industry vertical experiencing third-party cookie rejection. Close behind are telecommunications' 15.4 percent, healthcare's 14.7 percent, manufacturing's 13.3 percent and transportation's 13 percent.
WebTrends analyzed 16-month data spanning 5 billion visitor sessions from the most trafficked sites on its hosted on demand service using third-party cookies to calculate an average rejection rate for each month.
Seacrist admitted the exact number of visitors who block cookies from being set on their machines cannot be determined, mainly because they are rejecting cookies. For instance, a single consumer visiting a particular site more than once is recorded as a new visitor each time.
Research in the marketplace confirms that third-party cookies are vulnerable to blocking and deletion. One way to address that issue is for sites to switch to using more legitimate first-party cookies in their analytics to generate more accurate data on consumer behavior online. First-party cookies are served to the visitor's browser directly from the Web site's domain, rather than from a third-party Web analytics vender.
WebTrends has another suggestion. Analytics solutions should offer backup sessionization methods that do not rely on cookies to get a comprehensive view of visitor behavior and the performance of online marketing campaigns.
There is little doubt that the typical online consumer misunderstands cookies. Web analytics firms and industry associations must educate the public on cookies and their use.
"Even though most every cookie is benign, only containing a unique ID, visitors are wary of third-party cookies, which, by their very nature, are not served by the site that the person has chosen to visit," Seacrist said. "Businesses need to move to first-party cookies and maintain clear privacy policies. There also needs to be a best practice methodology used by vendors that relies on genuine first-party cookies rather than tricking browsers and that stores only the most necessary information within a cookie."
Separate studies from online market researcher InsightExpress, Stamford, CT, confirm the need for more consumer education around cookies.
The studies found that three-quarters of the polled consumers said they knew what cookies were. But only 25 percent of them described correctly what a cookie does or is.
Of those responding, 77 percent said they delete cookies to clean up the computer and free up memory, 67 percent wanted to protect their privacy and prevent tracking and 57 percent sought to delete or remove spyware.
"Some even thought deleting cookies would eliminate spam or prevent viruses," said Sandy Kraft, formerly vice president of marketing at InsightExpress. "Only the tracking prevention reason is a true benefit of cookie deletion. So many are, or think they are, deleting cookies for the wrong reasons."
Three-quarters of the consumers in the InsightExpress studies said they use software to detect adware or spyware. Some of these programs identify cookies as potential threats to consumers' computers.
That said, the Interactive Advertising Bureau and Safecount, an all-volunteer industry effort to help accurate measurement of media, announced initiatives to help cut cookie deletion rates.
"At present, cookie tracking still yields more direct and accurate feedback of campaign results than nearly most types of marketing," Kraft said.
Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation 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