October 20, 2013
You’re sitting at a bar with three of your friends, enjoying some beer and cocktails. You’re chatting, laughing, and just catching up. You turn your head and see a guy in a neon yellow shirt, staring at you and smiling expectantly.
“Hey there, I’m Bob Smithback from Howdy Toyota,” says the neon shirt guy. “I have that Prius C hatchback you’ve been looking for. Here’s my card!”
First thought? Weird. Second thought? I just bought a Ford Focus. Go away. Third thought? Wait, how did he know I considered buying a Prius?
Six months ago, you did some online research about purchasing a Toyota Prius, but you ultimately went with the Focus instead. When you visited autoreviewrr.com (fake website) during your research, a single bit of computer code, known as a cookie, was stored in your Web browser. This is how Mr. Smithback knew you were researching the Prius.
In this case, “C” is for cookie, but even more so, “C” is for creepy — especially for consumers.
What Is This “Cookie?”
A cookie is a piece of code that is stored in a user’s website browser or hard drive. These tracking cookies are used by website owners to gather data on the browsing activity of visitors. A visitor is given a unique identifier so information on how many times he visits the site — and which products or pages he navigates to — can be associated with him.
Cookies can be helpful when used to store passwords or credit card information for easy purchasing. Other sites use this data to create personal recommendations for users, which is when things can go terribly wrong.
The tracking data is used to sell advertising, either on the site or through third-party providers. It can be used for retargeting campaigns (for example, you view a Tiffany & Co. necklace, and then ads from Tiffany appear in the sidebar ads on various sites you visit) or to showcase traffic to set advertising rates.
Website owners hope this means you’re provided with more relevant and targeted advertising, but many feel this level of tracking is an invasion of privacy — one they never agreed to. And this is where things can start to get creepy and potentially inaccurate.
The Problem with Tracking
Cookies can actually begin to harm your business. Though it seems like cookies are providing you with obviously relevant data, much of this data may be inaccurate and will begin driving customers away.
First, using cookies opens up a privacy issue. Especially in today’s culture of “the NSA is always watching,” people are hypersensitive to invasions of privacy. As soon as your website visitors realize they’re seeing a Prius ad on your website because they Googled “Prius” six months ago, they may trust you less and avoid your website in the future.
Second, cookies can be irrelevant. Most families share computers and accounts, especially when using websites such as Amazon or Netflix. This is why you may get recommendations for “Jane Eyre” right alongside a Tom Clancy novel. Does this make sense? No. Does it make Amazon look a little stupid? You decide.
Third, cookies can ignore the timing of recommendations. If a consumer researched the Prius six months ago, he has probably already made a decision about which car he will buy and may have even recently purchased a vehicle. This means a Prius ad six months later will be confusing and irrelevant to the customer.
Discover the Alternatives
The primary goal for companies’ cookie usage is to deliver relevant content to customers. But cookies can be inaccurate, and other tools, such as Gmail’s email text analysis or native advertising, can be better alternatives.
The simple text analysis within Gmail, which analyzes what consumers are saying and receiving via email, is evolving into linguistic analysis. The analysis adds meaning behind the phrases and words within consumers’ text, providing qualitative data — the “why” behind an action or thought.
Native advertising via social media plays on consumers’ desire to read stories. Native advertising, when done correctly, means keeping product placement on the sidelines, rather than making it the star of the show. Native advertising serves stories with a side of product promotion.
Instead of collecting cookie data that simply says, “John went to a website and researched a Prius,” text analysis and native advertising analyze John’s other interests and passions and tune content to those.
Cookies are Neanderthals. They are quickly headed for extinction, blocked by consumers who are using plug-ins and browsers that promise more privacy, like DuckDuckGo. Advertising technology has evolved and will hinge on the enormous amount of data that consumers create. Don’t be the creepy guy in the neon yellow shirt. Look for alternatives to cookies to tailor advertisements and create recommendations your customers will actually pay attention to.
Guest author Jack Holt is founder and CEO of MATTR. Jack founded S3 Matching Technologies in 2001, bringing to market big data SaaS products with matching algorithms. Tens of thousands of users, including Hewlett-Packard, the New York Stock Exchange, Proctor & Gamble, and others depend on these apps each day. Follow Jack on Twitter!
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