Whining about cookies overstates problem


transparency1_small.jpgADOTAS — I’m starting to read doom-and-gloom scenarios now that online privacy has come to the attention of the FTC and the Legislature.

Gathering data to better target ads to users has breathed new life into the online ad industry, and the fear is that meddlesome regulations out of Washington will kill innovation and destroy a growing value proposition.

I don’t agree with that perspective and here are five reasons why:

1. The industry could use some oversight.

This may be surprising coming from someone in the ad-targeting business: my company Bizo uses cookies for professional business targeting. However, there are shady publishers and networks out there, and using personally identifiable information (PII) is never going to fly. PII and nefarious targeting should be abandoned in order to create an open and transparent industry environment, and Federal regulations would clean this up quite a bit and create a better environment for legitimate players. Selfishly, if it kills a few of the worst offenders, more dollars flow to legitimate targeting platforms, and I count my company among them.

There are plenty of ways to use technology and non-PII data to safely target ads. At Bizo, for example, we use what we call “bizographic” data, information gathered by business sites that includes details such as job title and industry without any personal information. The use of this data allows for great B2B ad targeting and a better experience for both the business user and the publisher — all in a totally transparent environment.

2. Publishers need ads.

As worried as the ad industry is over the prospect of new laws cutting off revenue streams, publishers are equally uneasy about the possibility of losing a big source of income.

If publishers are going to lose much of the value they gain by providing free content in exchange for serving ads, they will go to a “gated” model just like with paid content. With even draconian opt-in regulations, users will simply be required to click a terms of service (”I opt-in to targeting”) before accessing the site’s content. If the user doesn’t want to opt in, then many publishers will send them to a payment form to access the content for a fee. The vast majority of users will simply accept the terms, and opt-in to targeted advertising in exchange for free content.

4. Consumers need ads — and targeted ads are better.

See above. We’re all addicted to free online content, (often to the chagrin of publishers), and without advertising, it can’t exist.

If targeting is hamstrung, the advertiser has to resort to “annoying” tactics like pop-ups and takeovers to raise attention levels. Have you noticed how ads get louder when you watch TV?

However, targeted ads work while creating a much better user experience: They are less annoying and more likely to be useful. If there is a clear user understanding that consumers are receiving free content in exchange for safely targeted ads, most consumers will agree to that tradeoff.

4. Opt-in can actually provide a better environment for relevant targeting.

Let’s use Google as an example. I understand that when I type my key words in the search bar, Google will serve me ads targeted to my search. In exchange, I get the search for free. The value equation is very clear.

Following this line of reasoning a step further, if all publishers begin to require an “opt-in” to view free content, cookies will be placed on the user’s browser indicating that they have accepted the terms on site xyz.com and can go ahead to the content. This will require a browser to accept these cookies. Then, if a user ever deletes their cookies, they will have to opt-in to all of those sites all over again. Thus, this requirement may actually lead to a better environment for legitimate cookie targeting, where cookies aren’t deleted nearly as frequently and the user trade-off is clear.

That clarity is something I think can’t be overstated. Success in this industry needs to be predicated on full transparency. If you have that, the notion of opting in or opting out isn’t even necessary — it’s all clear user tradeoffs. But if it takes an act of congress to bring this clarity to the market so be it.

And, finally:

5. Remember CAN-SPAM?

Check your spam filter. Did that piece of legislation, signed into law by President Bush in 2003, really end email marketing? This legislation won’t end online targeting either. But like CAN-SPAM, it may help to create more legitimacy and transparency.


  1. Good piece, Russell. I think there is plenty more room for transparency and openness in the marketplace. Obviously there will be reluctance among those with highly vested interests to change what they are doing, but some change won’t hurt.


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