Google's Cookie Jar

Online, cookies scare people.  Offline, cookies put smiles on faces (and holes in people’s teeth).   Could they be any more diametrically opposed?

Here is MSFT‘s definition of a cookie:

Cookies are text files that a Web server can store on a user’s hard disk. Cookies allow a Web site to store information (sites visited or credentials for accessing the site) on a user’s machine and later retrieve it. The pieces of information are stored as name-value pairs. Cookies are designed to be readable only by the Web site that created them. A name-value pair is simply a named piece of data. It is not a program, and it cannot “do” anything. A Web site can retrieve only the information that it has placed on your machine. It cannot retrieve information from other cookie files or any other information from your machine. For more information on how to handle cookies in Internet Explorer, read the Microsoft.com Cookie FAQ.

Google today announced that they were going to put a cookie on any browser who visits a site in the Adsense Network.  The first reaction to hearing this for many people is probably negative.  However, this could be a very good thing and could advance online advertising a step further in the right direction.

By Google dropping a cookie on browsers, they know the frequency at which you have visited their “network.”  One issue that many advertisers have (and consumers certainly know about it because they voice their frustrations) is setting a global frequency cap across an entire media plan constituted of different sites.  It’s difficult, just ask any media planner.  Doable – yes, but not perfect.

Since the Google Adsense network is vast, having a way to track global frequency for advertising across is very helpful and sexy to advertisers.  If you’re not part of the advertising world, you may be asking why “frequency” is important.

First, frequency is the amount of time a person is exposed to a particular ad in a set period of time.  There is a point where the law of diminishing returns kicks in and running too many ads to a particular user may actually work negative against the brand.  If you’ve surfed the internet and have seen the same ad over and over and over again and you’re wondering why… they are probably having problems with setting frequency or managing the yield curve.  There are other reasons why but they are not for this little ramble.

Additionally, there are two conversion metrics that both DART (DoubleClick) and Atlas (Microsoft) use for measurement:  click-through and view-through.  Click Thru (CTR) is what we know of when a user clicks an ad and goes to the website that it’s affiliated with.  A View-Through is another form of conversion that accounts for when a user is exposed to an ad but does not click it, but later, ends up at that advertisers site (within a certain amount of time).  Google is looking to better measure this, especially as conversion attribution is becoming a hot topic in today’s advertising landscape.

The Cookie Jar that Google is building may sound scary but it’s in the best interest of all of us.  If companies can serve much more targeted ads, then they actually can become useful instead of the “punch the monkey” that we seem to get quite often.