SOURCE: eMarketer

July 19, 2005 07:00 ET

Online Marketers Urged to Convince Web Users of Internet Cookie Benefits

New eMarketer Report Calls for Industry Branding Campaign for Cookies

NEW YORK, NY -- (MARKET WIRE) -- July 19, 2005 -- Web advertisers and publishers must proactively reach out to Internet users about the benefits of Internet cookies. The online ad industry could face major problems without a strong marketing effort to persuade consumers that cookies are harmless, that they don't violate privacy and that they are not a type of spyware.

That's the outlook from eMarketer, which today releases The Cookie Report, in which eMarketer senior analyst David Hallerman analyzes recent cookie reports and offers an in-depth look at the benefits and misperceptions of online cookies.

"Marketers must cajole consumers into accepting cookies," Mr. Hallerman says. "They must express the benefits of cookies, such as free online content and easier Web browsing."

Consumers have long been concerned about cookies. The issue flared up in 1999, when DoubleClick hoped to merge cookie-derived details with offline database information. In 2001, the European Union moved to eliminate cookies, an attempt that was blocked through a lobbying effort spearheaded by the Interactive Advertising Bureau UK.

"What's new in today's cookie debate is being driven by two different trends," says Mr. Hallerman. "First, consumers are growing increasingly alarmed about online security. Second, marketers are demanding more detailed ad measurement and delivery, comprehensive user tracking through various stages of Internet encounters, and proof of the effectiveness of ad targeting based on user behavior -- all of which involve cookies."

Consumer deletion and rejection of cookies undermines confidence in a host of online performance measurements, including the number of unique visitors, customer retention and conversion rates.

"A key promise of online advertising has always been its greater accountability," he continues, "because it's more readily measured. But since that measurement often relies on cookies, online marketers may face a problem -- a big problem."

Since roughly half of all Internet users are unconvinced about the benefits of cookies, Mr. Hallerman argues, a key step is a full-blown ad campaign promoting all the ways cookies benefit consumers. A 'Cookie Campaign' could focus on delivering a persuasive message about personalization, free content, ease of shopping and navigation, and relevant advertising.

Self-reported comprehension of cookies varies considerably. In a recent spyware study, the Pew Internet and American Life Project reported that 68% of Internet users say they have a good idea of what "Internet cookies" means, which is a sharp jump from the 43% of users in 2000 claiming the same level of understanding.

According to InsightExpress, 76.9% of US Internet users claim that they understand what cookies are, whereas 55% of respondents told Dynamic Logic that they definitely know what cookies are.

Compare those results to the 50.3% of Internet users in a BurstMedia survey (of all ages) who either have a small level of knowledge about cookies (19.9%) or admit to knowing nothing about them (30.4%).

"While the debate rages on over whether cookies are harmful or beneficial," says Mr. Hallerman, "many users are taking the decision into their own hands -- and leaving marketers out of it."

eMarketer's The Cookie Report aggregates the latest data from leading researchers -- Atlas Institute, BurstMedia, InsightExpress, JupiterResearch, The Pew Internet & American Life Project, The Ponemon Institute, Safecount, WebTrends and others -- with eMarketer's objective, unbiased analysis to give you the up-to-date information you need to make well-informed business decisions in this fast-changing market.

For more information on purchasing a copy of The Cookie Report, visit eMarketer online at http://www.emarketer.com.

About eMarketer

eMarketer is "the First Place to Look" for market research information related to e-business, online marketing and emerging technologies. eMarketer aggregates and analyzes e-business research from over 1,700 sources and brings it together in one place. This research is presented in analyst reports and the "eStat Database" -- the most comprehensive compilation of up-to-date e-business and online marketing statistics in the world. For more information, visit www.emarketer.com.

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