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Spyware Heats Up the Debate Over Cookies

Published: August 15, 2005

INTERNET users are taking back control of their computers, and online marketers and publishers are not pleased with the results. But they don't quite know what to do about their conundrum - if it is a conundrum, since they can't even agree on that.

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Marilynn K. Yee/The New York Times

Peter Naylor of iVillage has heard nothing about cookie deletion from advertisers.

Until recently, Internet businesses could track their users freely, using what are known as cookies, tiny text files they embed on the user's hard drive. Now, with the proliferation of antispyware programs that can delete unwanted cookies, they often cannot tell who has been to their Web site before or what they have seen. And this erosion of control over a tool for gaining insight into consumer behavior has many of them fretting.

"Cookies are critical from a business perspective," said Lorraine Ross, vice president for sales at "They help us do things like track our profitability per unique visitor, for instance. But if you don't know how many people are coming in, you don't really have a handle on whether your profitability is improving or not."

It isn't necessarily just corporate America that is threatened by the anticookie fervor, Ms. Ross said - the deleters stand to suffer, too. For example, cookies help a computer limit how many times a user sees annoying ads like a floating, animated message. Such "frequency caps," to use industry parlance, are common among publishers. "So cookies are a really good thing for managing the user's experience," she said.

Last year, though, Ms. Ross said executives at the company debated how effective their frequency limits were, since a growing number of Internet users were deleting cookies and possibly seeing lots of animated ads.

Ms. Ross said that like most established companies, did not use its cookies to identify its users. "But the user's paranoia is understandable, given the history," she said.

Cookies first got a bad name in 1999, when DoubleClick announced that it would use them to identify Internet users and analyze both their offline purchasing patterns and online surfing habits for the purpose of showing them more relevant online ads. That plan died a loud, painful death after privacy advocates objected strenuously, and marketers and publishers have since taken a much more cautious approach.

Even so, privacy advocates deplore cookies and, as software programs like Webroot Spy Sweeper and McAfee AntiSpyware have come on the market, surfers by the millions are apparently knocking the cookies out of service as fast as the programs can be installed. This spring, the online consulting firm Jupiter Research published a report saying that nearly 40 percent of Internet users surveyed regularly erased them.

"I don't think cookies should be out there at all," said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group based in Washington, "but the good news here is that consumers are at least becoming more sophisticated about the appropriate use of cookies."

Eric Peterson, the analyst who wrote the Jupiter report, pointed out that most of the deleted files were so-called third-party cookies placed on the computer by a company other than the one operating the site the user was visiting. Most publishers rely on outside companies like DoubleClick and Atlas to send ads to the user's computer and track the effectiveness of campaigns.

Antispyware programs often leave in place first-party cookies, which can save users the inconvenience of having to log in to a news site each time they visit, but remove third-party cookies, the main target of users' ire. Some people say they think that total anonymity is the way to go.

The threat to the bottom line is real. Mr. Peterson said cookies not only helped sites measure overall profitability, but were critical in measuring the effectiveness of individual advertising campaigns. Marketers, for instance, could conceivably pay a Web site to deliver ads to 100,000 people, but only reach about 60,000 because so many of them were being counted twice.

"If you're O.K. with getting your ads to half as many people, and not really being sure how effective your campaign was, well then you can happily put your head in the sand," Mr. Peterson said. "Most people tell us they want data more accurate than that."

But are that many people really blocking cookies? Some executives aren't so sure. "When I talk to publishers, nobody says the problem is as big as the press suggests," said Greg Stuart, chief executive of the Interactive Advertising Bureau, an industry trade group. "So our role should be to get to some factual basis."

Mr. Stuart said his organization was planning its own research into the issue because, he said, much of the recent research "involves asking consumers about what they did, which isn't always a good indicator of their behavior."

Another doubter is Peter Naylor, senior vice president for sales at iVillage, a network of women's sites. "I don't think the problem is real, based on what we're seeing, or more importantly not seeing," he said.

Mr. Naylor said he had not conducted tests or surveys to determine if his company's visitors were deleting or blocking cookies, "but nothing has changed dramatically enough to raise a red flag."

"And I've heard literally nothing about it from advertisers," he added.

Among those companies fielding the most calls about cookie deletion are advertising technology businesses like Atlas. Young-Bean Song, the director of analytics for Atlas, said that even if the cookie deletion rates were as high as 40 percent, publishers and marketers could still rely on the data from the 60 percent remaining of a site's users to gauge the effectiveness of their advertising campaigns and other important statistics.

Perhaps because executives cannot agree on the scope of the problem, solutions have been slow to emerge. Mr. Stuart of the Interactive Advertising Bureau said that if the issue turned out to be as big as some suspect, his organization was likely to embark on an ad campaign to convince online users that cookies were not harmful.

Already, Internet companies are trying to accommodate Web users in practical ways. In May, WebTrends, a site that had helped online businesses analyze advertising and Web site data by using third-party cookies, began offering its clients the ability to offer first-party cookies without losing the data associated with the old third-party ones. Greg Drew, WebTrends' chief executive, said some users still blocked cookies altogether, so the solution was not completely effective. Still, he said, many clients had flocked to the service.

In the meantime, Ms. Ross of said the real solution was to overcome consumer hostility toward what she regards as a legitimate business practice that makes life easier for everyone. That may be a long shot, but she is hopeful.

"We have to think about long-term answers," she said. "We need to have users love their cookies, for the right reasons."

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Photo: House and billboards in Atlanta, Georgia, 1936
Photo: House and billboards in Atlanta, Georgia, 1936