Cookie Targeting

As one of the first companies to offer IP targeting, we often have prospects compare El Toro to legacy services they have tried which are typically based on cookie targeting. Let’s take a few minutes and explore cookie targeting of web users and how it works. Simply put cookie targeting is the process of collecting, correlating and aggregating user data using cookies. As most readers of this blog know, cookies are short snippets of code embedded in a website, then downloaded to a user’s browser. Cookies can be first party, think Google persisting your username for Gmail, or 3rd party cookies which are typically used for targeting advertisements. Cookie targeting can take a number of forms including:

• Network Behavioral Targeting – Advertising Networks use behavioral targeting to aggregate data about a user based on their web-browsing and search history and then place topical advertisements in front of that user. Since they serve many advertisements across a variety of sties, they can build a profile of the user that allows for more targeted and topical ad placement.
• Cookie Matching – This is the process of matching cookie data to other identifying characteristics about the web user (typically email, name and/ or address) then integrating this with an off-line list of individuals to develop targeting segments.

So how is cookie targeting different than IP targeting? There are three main differences. First the audience for cookie targeting is limited to only the people who have enabled their browsers to accept cookies. Increasingly browsers including Firefox, Internet Explorer and Safari have changed their default settings to block 3rd party cookies reducing the addressable audience and limiting the effectiveness of this technology. Second, there are significant risks with pending legislation impacting the ability of marketers to continue to offer cookie tracking. Specifically the proposed Do Not Track Me Act of 2011 and the Kerry/McCain Commercial Privacy Bill of Rights Act of 2011 have both proposed the creation of a universal opt-out mechanism for cookie tracking along with restrictions on using data that could be classified as Personally Identifiable Information (PII). Legislation to further restrict marketers’ usage of cookies is inevitable and it will further reduce the efficacy of cookie-based ad campaigns. Finally, as with most new technologies, when marketers take one step forward so do people who want to defraud them. As HTTP cookies have become more valuable for advertisers, the CPM that advertisers pay for ads delivered to cookied individuals have increased, this has attracted people and organizations with nefarious intent whose primary purpose is to sell fraudulent traffic. Obviously, every impression delivered to a bot net or click farm reduces the effectiveness of a campaign.

Keep in mind, browser cookies can be a value added aspect of an ad campaign, especially when used for retargeting. But as companies increase the sophistication of their marketing campaigns, the limitations of web cookies are becoming more apparent. Hence the need for a next generation technology like IP targeting. In our next post we will discuss how IP targeting solves many of the issues discussed above.