Cookies have been with us since 1998 and yet not really progressed much before now. But new uses and impending legislation mean everyone is suddenly talking about them. Alex Blyth investigates
B2B marketers are fast discovering some exciting new uses for cookies. In addition, consumer concerns around privacy and impending legislation are posing significant challenges to the future use of cookies. Needless to say cookies are fast becoming a topic that no B2B marketer can afford to ignore.
So what exactly are cookies? “Cookies are the mechanism by which publishers, advertisers, ad networks, ad exchanges, demand side platforms and data exchanges store and track information on a visitor’s computer,” explains Cameron Hulett, SVP of publisher solutions at digital consultants Acceleration.
He continues, “When a visitor arrives at a site, their browser allows that site to drop cookies onto their computer. Each cookie can hold information such as age, location, behaviour group, passwords, and so on. This enables the site and third parties to keep track of the visitor.”
Cookies were originally designed to pass information from the web page you are on to the next one you go to. For example, if you entered the date on a travel booking and then moved onto the next page, that page would keep that date. Before long, however, marketers realised there was much greater potential in the humble cookie: they could embed information in order to target the user not just with better content, but with targeted ads.
A new role for the cookie
Consumer marketers have traditionally led the way in finding sophisticated new ways to use cookies, but B2B marketers have not been far behind. Juliet Hills, brand manager at online marketing company Magiq believes there are four ways B2B marketers currently use cookies. “The differences between the four types are defined by how long they are kept for and who sets them,” she says.
The first type Hills describes is the temporary cookie. This only lasts until you close your browser, so it cannot be used to remember you on a future visit, but it can remember in-session things such as whether you are logged in or what you have in your basket.
The second type is the permanent cookie. As its name suggests, it lasts for a longer period. In theory this can be forever, and there has been some debate around the use of so-called ‘ever-cookies’, but in practice most have expiry dates set when they are created, usually of between 30 days and a year. These are used by marketers for longer-term CRM, tracking and targeting activities.
The third type is the first-party cookie, which is written by the site you are visiting. It is used exclusively to drive activities within the site. The fourth type is the third-party cookie, which is written by sites other than the one you are visiting. These are both the most useful and the most contentious.
Hills explains, “On the face of it, third-party cookies should not be possible, and at the start of the Internet they were going to be outlawed, but that never happened. They get set by content from other sites that is included in the page you are browsing. So, for example, if you are browsing a page on site A, and included in the page is an ad from site X then that ad can set a cookie for site X.”
She continues, “At this point nothing too odd has happened, but if you later go to site B that also has an ad from site X, then site X knows you’ve been to site A and site B and so over time, site X comes to know more and more of the sites you visit. Site X can use this data to change the content it shows you or, worse yet, to sell data about the sites you visit.”
Turning the tide
Cookies, when used responsibly and effectively, have become extremely useful to B2B marketers. As part of lead generation software, they help marketers navigate their way through B2B buying processes, which can be notoriously complex and drawn-out. As part of an advertising campaign, they help marketers deliver highly relevant content, thus enhancing customer satisfaction and improving conversion rates.
There has been very little misuse of cookies by consumer marketers, and even less by B2B marketers, but nonetheless consumer concern over privacy and cookies has grown steadily, and last November resulted in the European Council passing a new law concerning data privacy. That law will be enforced across all 27 EU states by April 2011.
B2B marketers need to be aware of this law and they need to ensure they comply with it. However, Janneke Niessen, COO and co-founder of online advertising specialist Improve Digital, argues that marketers may need to go further if they are to forestall future, more stringent legislation. “Consumers frequently feel that cookies are little more than online stalking,” she argues. “So, the industry as a whole – advertisers, publishers, ad networks and exchanges, technology providers, and so on – must take action now to change that perception.”
Niessen believes this applies to B2B marketers just as much as their consumer counterparts. She says, “All marketers must make easily-understood information available to everyone, explaining how cookies work and pointing out their benefits. They should explain how cookies are essential for sites that are personalised to them, sites that remember the countless passwords required for life online, and so on. Finally, organisations using cookies for retargeting must be entirely transparent in how they collect, store and use that data.”
The future
Looking ahead, cookies face not only legislative and cultural threats, but also technological ones. Hulett explains, “The forthcoming Internet Explorer 9 will contain a new opt-in control that will prevent users from being unknowingly tracked by websites. This basically stops cookies from working for that site. The effect of this will depend on how it is implemented. Right now, most browsers can already do something similar to this, but because it is hidden functionality, it is seldom used.”
Despite all these challenges, the cookie brings many potential benefits and most observers expect it to play an increasingly important role in B2B marketing in the future. Andrew Girdwood, director of Media Innovations, believes that we will become smarter in our use of cookies. He offers this example, “At the moment if a single visitor has a cookie that says they came to the website because of a banner campaign and another saying they came to the website because of a search campaign, they’re treated as two separate customers. We can expect to see marketers using deduplication techniques to sort this out.”
Marketers will also find new uses for cookies, such as in behavioural advertising for mobile devices and on Internet Protocol TV (IPTV). Matt Hall, managing director of lead generation software company Profunnel adds, “Cookies are increasingly incorporated into social media tagging to provide powerful insights into customer behaviour.”
However, for many the key issue over the next few months will be finding a way to encourage responsible use of an increasingly important marketing tool. Stephan Noller, CEO at behavioural targeting agency Nugg and chairman of the IAB Europe policy committee, concludes, “Cookies are the operating system of our industry, and one of the biggest growth factors for online advertising is targeting. I believe that the industry will get active in regulating itself against data abuse and will do a lot to gain the user’s trust through providing maximum transparency, control and education. Alongside this, I expect that [web users] will soon begin to grasp how cookies can help them and how they can control them. That is when we will really see cookies take off.”
