100 billion cookies

Seth Goldstein posted, in his usual bizarre fashion, about the billions of cookies that lie behind the billions of dollars which make up the recent ad network acquisitions. Seth’s venture AttentionSoft is trying to empower users to take control of their “attention” (embodied in cookies) because, as these acquisitions show, their attention is very valuable.

While I admire Seth’s unique take on the market for attention, I think the more interesting issue in play here is the fact that these networks thrive on the fragile world of cookies. Banner advertisements generally have miserably low CTRs, although the networks that serve banners argue that they can increase clicks by “targeting” ads served to users. This targeting is done through cookies. If a user navigates to a site that contains a banner ad from one of these networks, the ad “sees” the cookies in the users browser, and if it recognizes any of them it can use that data to serve up a relevant ad. For example, if a user is shopping for a car, he may visit several car manufacturer sites. If Ford is using an ad network, they may try to plant a cookie in the users browser so that when the user navigates to a site that serves ads from the network they run ads in (NYTimes.com, whatever), the site will see that the user has been to the Ford site recently and will serve up an ad for Ford. Additionally, some ads themselves can plant cookies. These ads analyze the content of the page a user has navigated to and plant a cookie that contains information about the ad and the context the user saw it in. You likely have hundreds of cookies in your browser right now – to see them go to Preferences and then look under Privacy or something similar. Some of these cookies are useful and enable autofill or autologin features you likely agreed to, but the majority are likely not.

This system hinges on the cookies making it into the users browser in the first place. Different browsers have different default options for cookie acceptance. Firefox currently only has one option: “Accept cookies from sites.” A user with this option selected will see targeted advertising as they navigate around the web while someone who doesn’t select it will see no targeted advertising. Safari’s options are: “Always,” “Never,” and “Only from sites you navigate to (for example, not from advertisers on those sites) .” Internet Explorer has a scope of options from “Low” to “High” to “Block All Cookies.”

The way in which these options are framed has a large impact on how users choose between them (i.e.: the fact that the “Block All Cookies” is past the “High” security setting may make a user feel like an extremist for selecting it). Similarly, the default security setting on a browser like Internet Explorer, which tends to be used by less savy web surfers, will have a huge impact on how cookies are logged. Now that Microsoft has acquired aQuantive, which relies heavily on cookies to target ads, you can bet that the default IE option will be to allow cookies.

Comscore has done lots of interesting research on user cookie deletion from the perspective of traffic measurement systems. Their study states that 3 in 10 internet users delete their cookies every month. This seems quite high to me. At the end of the day, for the vast majority of internet users the default configuration of a browser has the most impact on cookie acceptance and retention, and with browser makers moving into the advertising world, you can bet that default browser settings are going to become more and more cookie friendly.