• by Roy Shkedi , March 15, 2006

Since advertising cookie technology is key to behavioral targeting, I've been closely following the ongoing debate about cookies. However, I've noticed that in this debate third-party cookies are often singled out by some as being intrusive and worthy of deletion, while first-party cookies are regarded as an accepted part of the Internet. Anti-spyware companies' false portrayal of third-party cookies is one of the main reasons for the continued negative reputation of third-party cookies. Because lawsuits and threatened legislation have curbed the worst forms of spyware and adware, anti-spyware companies have to create a need for consumers to continue buying their products. Falsely portraying third-party cookies as harmful and intrusive serves the anti-spyware companies' financial interests.

In this environment, we wanted to compare the risks and benefits of third-party and first-party cookies.

In terms of risk, third-party cookies are portrayed as more intrusive and potentially damaging than first-party cookies because they track a consumer's path across the Web. As large portals start to develop their own behavioral programs, in which their advertisers' ads will be distributed across the Web based on their visitors' behavior within their properties, first-party cookies will be used not only to track a user's behavior within a portal's properties but anywhere across the Web, in the same way third-party cookies are used.

Therefore, third-party cookies are no more risky than first-party cookies. If we take into consideration that most large portals collect personally identifiable information (PII) while the vast majority of companies using third-party cookies do not collect PII, third-party cookies, if anything, are less risky than first-party cookies.

How about benefits? Many brick-and-mortar retailers offer rewards programs and frequent-shopping discount cards that consumers eagerly sign up for--giving detailed PII for enrollment. Online, third-party cookies provide consumers with the same tailored relevant offers but without requiring the consumer's PII, while first-party cookies provide the same benefits, with most of them associated with PII as already noted.

Having compared the risks and benefits offered by first- and third-party cookies, I have to ask the question: why are some people still suspicious of third-party cookies?

Most consumers benefit from tailored ads but have no idea that those targeted offers are delivered thanks to third-party cookies. As we have long argued in the past, educating consumers about the benefits of third-party cookies is a noble cause, but we find it hard to believe that such efforts will move the needle much. What can we do to change the false perception of third-party cookies? Let's start by building trust!

Consumers are comfortable with first-party cookies since they are delivered by known entities (the sites they visit). Consumer know who is delivering the cookies, they may or may not know the benefit in accepting those cookies, but most importantly, they know exactly whom they can contact if they have a problem with a first-party cookie. In comparison, most consumers have no idea who dropped third-party cookies, how to contact those companies, or what benefits they provide.

We can start by providing consumers with ads that include the name of the company delivering them. Clicking on the name of the company delivering the ad will take consumers to a dedicated page that tells them about the company and gives them the option to opt-out. This will put consumers in the driver's seat. They don't need to understand how cookies work. All they need to know is that if an ad delivered to them is not to their liking, they see no value in it, or worse, they consider the ad to be offensive, they can easily opt-out from receiving more ads from the company that delivered that ad.

This will also ensure that the companies delivering the ads will take the extra step to make sure that ads are truly useful to the consumer. Because if ads are not relevant, the consumer is always one click away from opting out.

What do you think? Makes sense?

Instead of educating consumers about cookies, simply put the customer in the driver's seat. Let consumers be the judge of the value of our ads.