Cookie Technology: Right or Wrong?

Anyone involved in direct or interactive marketing is aware of the scrutiny that cookie technology has recently come under. An article in USA Today’s Money section on Feb. 25, titled “Targeted Ads: Consumer Trap or a Net Necessity?” was on target in the controversy regarding cookies and privacy.

Cookies are a direct marketer’s dream. They allow us to measure the effectiveness of what we’re doing on a Web site and give us general information about clicks, views and how many times a visitor comes to a site. By definition, cookies are small pieces of electronic information that are placed onto a PC’s central processing unit. They download information from sites on the Internet. If you browse the Internet, you are automatically downloading information onto your PC from a site.

At one point in my Web education/experience, I was totally against the use of cookies fearing the potential of privacy abuse by companies. I have changed my position because, as usual, the technology is not the problem – it’s the companies that use it and how they use it. We should not hold back progress because a few will misuse the new techno-tools. Not all data are marketing information (see my last column), and not all potential uses of cookie technology are proper marketing tools.

The original intended purpose of cookies was to keep track of a session or visit to a Web site. This may be a bit simplistic but, for direct marketers, the cookie means that a visitor can travel through a Web site with a shopping cart, and it appears seamless to all involved. That seamless venture, even between different servers that a host site may choose for different parts of its marketing program, is accomplished by use of the cookie.

The cookie does not tell you who has come to the site. The cookie (without getting overly technical) gives you a link to the visitor. This link is actually stored on the user’s machine. If you use AOL, HotMail, Juno, Prodigy or a host of other Internet service providers, you are never or rarely using the same IP address. These ISPs let you browse and use an IP on a first-IP-available basis (think of a Ferris wheel). The cookie provides a persistent record without regard to a particular IP address. So why has the cookie become the center of a firestorm on privacy?

Companies have taken cookie technology and, without asking permission of consumers, have begun to link their Web experiences to personal bricks-and-mortar data. The main focus of this controversy is the firm DoubleClick, which recently purchased the catalog databaser Abacus Direct Corp. DoubleClick’s position is that under careful and responsible supervision (its own), the cookie technology and its link with postal-based data from Abacus will provide organizations more targeted and, therefore, better marketing results throughout Web sites and their clients’ Web advertising. This may be true, but consumers should have the right to decide if they want their personal data used without their permission.

In other words, consumers should give their permission if personal information is used. The Direct Marketing Association just spent a fortune on its Privacy Promise because of our industry’s commitment to consumers.

As of March 2, DoubleClick CEO Kevin O’Connor has suspended his plans to marry consumers’ online and offline behaviors until there are industry and government guidelines. However, the company’s competitors don’t track personal data and they still have effective marketing programs. Engage is just one example of cookie technology being used with anonymous profiling. Keep in mind, cookie technology keeps track of events on a Web site, measures activity and still keeps the user anonymous.

In last month’s column I stated that “what was good for the consumer was also good for direct marketers.” The cookie controversy is going to be decided in favor of the consumer, make no mistake about it. DoubleClick would have all of us believe this is an industry problem, I don’t think so and we shouldn’t make it one.

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