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Locked ComputerEvery time a consumer surfs the web and clicks on a site, online marketers can place “cookies” on that user’s computer, showing them where he or she starts, proceeds, and ends the online encounter—as well as what he or she buys, and doesn’t. For many consumers, such close access to their behaviors is an unacceptable invasion of privacy.

In response, the marketing industry as a whole has sought to find solutions and self-regulations that would calm customers, satisfy cautious regulators, and still enable marketing firms to gain access to invaluable information about consumer behaviors. Those attempts appear to have stalled. The online marketing industry simply has not been able to agree about how to police itself.

New legislation introduced in the U.S. Senate attempts to police their activities for them. The proposed law would mandate a do-not-track option that would allow users to opt-out, easily and quickly, from cookie implantations. Although an existing Ad Choices website already has allowed 1.5 million Internet users to prevent cookies, critics argue that the industry-run site is difficult to use and deliberately makes the do-not-track button hard to find.

Consumers’ demands for such privacy protections keep growing though. Therefore various browsers, such as Apple’s Safari and Mozilla’s Firefox, have introduced or are working on cookie-blocking technology. This technology-over-technology solution seems likely to lead to additional jumps though, as marketers seek to find ways to get around the blocks.

The reason for online marketers’ insistence on using cookies, even in the face of customer discontent and legislative threats, is the outstanding value that the information collected through cookies can provide. Only by knowing how, when, and where people really browse online can marketers make sure that they target consumers accurately. Cookies also are a major source of revenue for targeted advertising firms that sell their consumer data to other advertisers, promising the most accurate information when it comes to selecting who will receive their marketing messages.

With such strong motivations on each side, the outcome remains anyone’s guess. But ultimately, marketing needs to be about satisfying customers. And if customers don’t want cookies, marketers will be hard pressed to convince them to take one.

Source: John Bussey, “Taming the Spies of Web Advertising,” The Wall Street Journal, August 8, 2013