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In Focus: Don't Let Third-Party Cookies Crumble Web Results

If you want to run your Web site like a business, you have to track site

As the saying goes, you can't manage what you can't measure. So if you want to run your Web site like a business, you have to track site visitors. I'm not just talking about clicks and unique visitors. You need to know whether people have been to your site before, how often they visit, how long they stay and what they look at. And if it's an e-commerce site, you'll want to know what they searched for, what they bought, their average cart and, to see if your marketing efforts are paying off, where they came from and when they bought.

Figuring all that out requires a Web analytics package. But if you don't have — or don't want — to get into all the servers, storage and expertise required, your only choice is a hosted Web analytics solution. Companies such as Clicktracks, Fireclick, Omniture, WebSideStory and WebTrends can fix you up with an on-demand service that does the counting for you (check out Network Computing's extensive July review for more information).

For small and midsize businesses, hosted is usually the only way to go, but these services typically rely on "third-party cookies" to track your visitors. Cookies are tiny files that are downloaded onto your computer when you browse a site. But as TechWeb recently reported, the trouble with the third-party variety is that they're increasingly being rejected and deleted by anti-spyware programs. More than 30 percent of the 150 million online households in the United States run anti-spyware applications that block or delete third-party cookies, according to JupiterResearch.

Designer Linens Outlet (DLO) started tracking visitors with a hosted solution back in mid 2004, but the third-party cookies were becoming a problem. "Nearly 18 percent of visitors to the site were rejecting tracking cookies, and that's not even counting the question of cookie deletion" says Josh Manion, CEO of Stratigent, a Web analytics consulting firm that was working with the site.

Fortunately, DLO's service provider, WebTrends, has since figured out a way to track visitors using first-party cookies that originate with the site publisher. The difference has been dramatic. "We switched the site over as soon as WebTrends made it available in May, and cookie rejection is now down to less than half a percent," says Manion.

If you're successfully counting 82 percent of your traffic, wouldn't that be good enough to tell you what's happening on your site? In the big picture, yes, says Beverly Dant, DLO's interactive marketing manager. But accuracy is crucial when it comes to understanding the behavior of repeat visitors and repeat customers as well as the effects of marketing campaigns. "[Cookie rejection] meant the reports were overstating the number of new customers and underreporting the percentage of customers responding to marketing campaigns," she says.

As an example, DLO uses customer newsletters, keyword campaigns on Google and shopping portal databases to traffic to its site. But if customers reject or delete cookies, Web analytics won't give a complete picture of which vehicle delivered the best results. "There were definitely a couple of vehicles that we thought weren't profitable, but now we're learning which ones it makes more sense to invest in," Dant says.

Particularly revealing for DLO has been the improved accuracy of reporting on repeat visitors and buyers. "The conventional wisdom was that people shop for bedding only once or twice a year," she says, "but we've learned a lot about the customer lifecycle and we've changed the way we promote shams and decorative pillows because we've found that it can drive people back to the site."