Chapell & Associates

Tuesday, July 26, 2005

Rising Cookie Rejection Bites Into Metrics

DMNews - July 11, 2005
Marketers assembled this week at the Ad:tech Chicago conference to discuss the finer points of online marketing must chew on the growing rejection of cookies. As recent studies show, consumers increasingly resist the placement on their computers of cookies - small files that Web sites use to identify users and serve targeted online ads and copy. A cookie rejection study from online analytics firm WebTrends Inc. found average third-party cookie rejection rates across all industries have risen more than fourfold in 16 months, from 2.84 percent of online visitors in January 2004 to 12.4 percent in April 2005.

The Chapell View
I'm not commenting specifically on this article - my thoughts are focused upon Webtrends recent announcement that they've switched most of the clients over to first party cookies. A friend of mine who happens to work for an online publication asked me for my thoughts on this news. I wanted to share my response with everyone...

Well it's definitely self-promotion, but that's not what I would take issue with. And I can't really speak to the integrity or accuracy of the research. There are others out there who could probably weigh in on that. So here's my take...

I think its nice that Webtrends has figured out an ok, albeit short-term, workaround for the "cookie deletion" issue. But the real takeaway here is what the company is responding TO. One of the reasons that they're getting better results with first party cookies is that Anti-spyware software companies aren't yanking them off of desktops as quickly as third party cookies. Consumers seem to fear third party cookies more so than first party cookies, and some anti-spyware companies seem to be playing into those fears.

So while I think this will help Webtrends and their customers over the short term, this type of move is harmful to online media over the long term for several reasons:

- It's somewhat of a concession that third party cookies are somehow bad.
- It addresses the symptom without addressing the problem.

It's not the type of cookie (1st party vs. 3rd party) that should be at issue, it's the BEHAVIOR that needs to be addressed.

You and I have talked about addressing "the cookie issue." I feel that our industry needs to respond to perception issues vis-a-vis the cookie. In a sense, Webtrends is offering a response. But is this the best we've got?
posted by Alan on Tuesday, July 26, 2005 | |

Thursday, July 21, 2005

Too Much of a Good Thing?

Mediapost, July 20, 2005
IS THERE A POINT AT which we cannot use more data? Over the last few weeks I've been spending time with clients and discussing different ways to mine their data to find more efficient and effective ways of targeting their customers. Digital media provides us with deeper dives into information than what was ever possible before, and it allows us to target on a more granular level. But, is there a point where the data becomes an obstacle?

The Chapell View
Corey T makes some good points here. However, I don't see this as an issue of how much DATA marketers can use - it's more of an issue of how much VALUE that marketers can bring to the customer experience by using the data. When Amazon makes a recommendation based upon my purchase history, it isn't creepy - it's valuable. When HP sends me an email telling me that it's probably time to change the toner in my printer, that also isn't intrusive - it's just in time marketing.

To many marketers view data as a commodity to be traded. We need to view it as a property that is licensed from the customer. We need to recognize the implicit exhange here. We need to acknolwedge that customers have a right to decided what pieces of their data ends up on our databases. They have a right to know what we are going to do with that data. And they have a right to enforce our collective responsibility to use that data in a way that positively (rather than negatively) impacts their lives.

Sounds simple, right? Then why isn't everyone doing it?
posted by Alan on Thursday, July 21, 2005 | |

Wednesday, July 20, 2005

Do Not Call list under attack, activists say

MSNBC July 20, 2005
They're back. Or they might be, those pesky telemarketing calls, after nearly two years of peaceful, interruption-free dinners. That's the warning a consumer protection group is about to issue. Legal wrangling threatens to disrupt that dinnertime quiet, according to the Electronic Privacy Information Center, which plans to present its concerns to the Federal Communications Commission later this month. Telemarketing groups are quietly mounting a campaign that would open the door to a floodgate of new calls, EPIC says, pointing to a series of requests filed with the FCC, essentially asking the agency to invalidate state laws regulating the practice.

The Chapell View
I'm certainly not particularly sympathetic to the telemarketing industry. They had the opportunity to negotiate a workable self-regulatory solution. In fact, one could argue that they've had over 20 years to do so. And all the do-not-call legislation in the world isn't stopping the handful of calls I get each week - presumably from individuals hailing from Banglore or other places offshore.

However, I also recognize the difficultly of complying with a patchwork of state laws - some of which tend to be poorly written.

The existing business relationship certainly represents a potential loophole. However, we need to get a better sense of the SIZE of the loophole before passing judgment. Is the 'existing business relationship' exception being abused? In other words, are consumers who purchase a cup of coffee really being inundated with phone calls from the coffee merchant?
posted by Alan on Wednesday, July 20, 2005 | |

Tuesday, July 12, 2005

Giving New Meaning to 'Spyware'

Wired - July 12, 2005
Supreme Court Justice Potter Stewart famously said that he couldn't define obscenity, but that he knew it when he saw it. The same has long been the case with spyware. It's not easy to define, but most people know it when parasitic programs suck up resources on their computer and clog their browsers with pop-up ads. Recognizing that one person's search toolbar is another's spyware, a coalition of consumer groups, ISPs and software companies announced on Tuesday that it has finally come up with a mutually agreeable definition for the internet plague.

The Chapell View
I have tremendous respect for Ari Schwartz' work, and am supportive of any group willing to engage in open discussions regarding Adware/Spyware/Cookies, Etc. And while I've often taken Adware companies to task for failing to provide consumers with meaninful notice and choice prior to installing software ONTO computer, I've also taken anti-spyware software companies to task when they don't provide meaninful notice and consent regarding programs they are REMOVING from consumer desktops.

I've noticed some of Ben Edelman's comments in the article. I don't know Ben personally, but he seems to be a really sharp guy. Given that Ben and Ari (on the surface anyway) would seem to share many of the same views on Adware and Spyware, I can't help but wonder why Ben would be so openly critical of this initiative at such an early stage.
posted by Alan on Tuesday, July 12, 2005 | |

Monday, July 11, 2005

Privacy group asks FTC to probe online investigation firms - July 8, 2005
A privacy rights advocacy group has asked the Federal Trade Commission to investigate whether Web sites advertising investigative services capable of digging up personal information such as phone call records are violating federal laws. Washington D.C.-based Electronic Privacy Information Center filed a complaint with the federal agency on Thursday, singling out Encinitas-based Intelligent e-Commerce Inc., which runs "We've asked the FTC to begin an industrywide investigation into these practices," Chris Hoofnagle, senior counsel at the group's San Francisco office, said Friday...

The Chapell View
I completely applaud Epic for urging the FTC to investigage these crimes, tho it seems unfortunate that the best organizations to go after are websites. As an evangelist for the Internet Economy, I fell like the Internet has already taken a disproportionate amount of blame for ID theft.
posted by Alan on Monday, July 11, 2005 | |

Thursday, July 07, 2005

Spyware, Viruses Changing Consumers' Online Behavior

InternetWeek July 7, 2005
The threat of spyware and viruses being secretly downloaded on their computers has caused the majority of consumers to change their online behavior over the last year, a research firm said Wednesday.

Fully 9 out of 10 consumers say they have made at least one change to avoid unwanted software, the Pew Internet & American Life Project found. For example, more than 80 percent of the 2,000 adults surveyed by Pew said they had stopped opening email attachments unless they were sure the documents were safe...

The Chapell View

One of my takeaways from this report is that consumers are beginning to recognize that the Internet - like most things in life - carries with it some risk of harm to those who enter unaware. In the same way that it might not be a good idea to walk down a dark alley whilst alone at night, it may not be wise to visit websites that you don't know without taking reasonable steps to exercise caution.

In many ways, I think this is a positive thing. Consumers need to play a role in helping to rid the Internet of Spyware and other nefarious elements. And part of that role involves accepting a certain level of responsibility.

I'm certainly not letting business off the hook here. All companies that do business online have a responsibility to provide consumers with notice and choice regarding their Internet experience. But equally, the consumer should not leave basic common sense aside when evaluating those choices. There's still somewhat of a chasm between business and consumer on these issues, but it's encouraging to see that chasm begin to narrow.

A naïve Internet surfer too often begets a burned Internet surfer, and that's certainly not a conducive environment to building trust with consumers. So if there's a growing recognition that you can't surf with closed eyes - that you shouldn't download something onto your computer without paying some heed to what that thing does, that that is certainly a positive development.

Nothing in life is entirely free. If it seems too good to be true, it probably is...

posted by Alan on Thursday, July 07, 2005 | |

Wednesday, July 06, 2005

Opinion: After a privacy breach, how should you break the news?

Computerworld - July 5, 2005
recent data debacles at ChoicePoint, LexisNexis, Bank of America and other places, more and more people are receiving the dreaded news that their personal information is at risk because of a privacy breach. Based on a recent study conducted by Ponemon Institute, we can provide some insight on what customers' expectations are when they receive notification. For the past three years, our institute has focused on consumers' perceptions of the trustworthiness of organizations they regularly interact with. And we believe it is a major threat to the goodwill and trust an organization has established with its customers, employees and contractors if it can't allay the fears of those victimized by a data breach.

The Chapell View
My friend Larry Ponemon provides some great insight. It's often been said that a person (or in this case an organization) demonstrates their true character NOT when things are going well, but in how they react when there's a problem.

I think you're going to start to see PR professional incorporate privacy strategies and best practices into corporate disaster communication programs, much in the same way that we've started to see marketing professional incorporate privacy principles into their outreach programs.

A few takeaways:

  • Tell the Truth, no matter how painful - Almost 86% of respondent's to Ponemon's survey indicated that they'd take their business across the street if they felt that a company was not being honest in their explanation of the breach.

  • Provide real assistance to the true victims of the breach - There needs to be a greater recognition that companies that store sensitive customer information have a responsibility to safeguard that personal information. And when they fail to adequately safeguard that information, the company absolutely MUST take a proactive role in assisting those impacted by the data breach. While I recognize that some companies have done better than others in this area, I am very concerned when I see PR communications which attempt to position the affected company as one of the "victims" of the breach. The organization is not the victim, the customers of that organization are collectively the victims. These are the people who are saddled with the responsibility of monitoring their credit reports for the next several years. (Although some companies have begun to provide credit monitoring for affected customers, they typically do so for only six months.) These are the people who may be turned down for jobs based upon corrupted credit report data as a result of a breach. And these are often the people who lack the financial or educational sophistication to adequately protect themselves from the risk of ID theft as a result of one of these breaches. In many instances these people never asked your company to store their sensitive data. So when you outwardly state or imply that your company was also a victim, you strain credulity.
posted by Alan on Wednesday, July 06, 2005 | |

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