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Collaboration Exercise 9

Adam Coleman Instructor


CTEC 205


Presented by:
Daniel Belza
Kristie Linn
Scott Hanna
Sierra McClellan
Zac Russell

TEAM

TABLE OF CONTENTS
INTRODUCTION

CREATION AND PROCESS OF THIRD-PARTY COOKIES

PURPOSE OF COOKIES
BLOCK THIRD-PARTY COOKIES

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THIRD-PARTY COOKIES AND FREE USE OF WEB CONTENT

REVENUES LOST
VALUATION OF FACEBOOK
FORBES AND FREE ONLINE CONTENT

CONFLICT OF INTEREST

DEFAULT AD BLOCKERS
CRITERIA TO ALLOW THIRD-PARTY COOKIES

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PRIVACY OF OUR DATA

BEHAVIORAL MARKETING

WHAT TO DO WITH THEM?

BIBLIOGRAPHY

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INTRODUCTION
In this collaboration, the topic of third-party cookies will be discussed, along with
how they are created and processed, their security, and if they are necessary. While
Team 1 answers the assigned questions of this exercise, they will be following the
procedures they set in place during Collaboration 1 of this MIS class.

CREATION AND PROCESS OF THIRD-PARTY COOKIES


Third-Party cookies are small amounts of data that are stored on your computer's
hard drive created by a domain other than the one you are using, such a third-party
advertiser. This is done when a website you are visiting loads data from a domain
that is not the principal domain. Third-party advertisers may have agreements with
many web pages, which recognize your IP address and can record your response
data from each of these web sites you visit. The third-party advertiser can then track
your cookie log and see the pattern of various web sites that you visit and what ads
they send per your IP address.

First-party cookies are associated with the principal domain you are visiting and
only add cookies based on that website; however, they can identify you by your IP
address and supply this information to the third-party advertisers.

PURPOSE OF COOKIES
The main purpose of a cookie is to identify users and possibly prepare customized
web pages or to save site login information for you. A web server has no memory so
the hosted web site you are visiting transfers a cookie file of the browser on your
computer's hard disk so that the website can remember who you are and what your
preferences are.

There are two different types of cookies, session cookies and persistent cookies.
Session cookies are cookies that are erased when you close the web browser. The
session cookie is stored in temporary memory and is not retained after the browser
is closed. Session cookies do not collect information from your computer. They will
typically store information in the form of a session identification that does not
personally identify the user.

Persistent cookies or permanent cookies are cookies that are stored on your hard
drive until it expires (persistent cookies are usually set with expiration dates) or
until you delete the cookie. Persistent cookies are used to collect identifying

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information about the user, such as web behavior or user preferences for a specific
website.


BLOCK THIRD-PARTY COOKIES

Each member of Team 1 was asked to summarize the procedures that are needed to
view cookies issued from a given site.

For Safari it is pretty easy to block or allow third-party cookies. Long in the short,
open Safari preferences, select privacy options, under block cookies select always
block, allow from current website only, or allow from websites I visit.

Firefox cookies are enabled and/or blocked by going to the Firefox menu and then
select preferences. Then click privacy and set "Firefox will:" to use custom settings
for history. After that, click and check the box next to "Accept cookies from sites" to
enable cookies then click OK.

It is also pretty simple for Google Chrome to block or enable third-party cookies.
First, click the Chrome menu on the browser toolbar. Then select Settings and click
Show Advanced Settings. In the "Privacy" section, click the Content Settings
button and in the Cookies section, the cookies setting can be changed.

THIRD-PARTY COOKIES AND FREE USE OF WEB CONTENT


As the MIS textbook notes, In large measures, ads pay for the free use of Web
content and even Web sites themselves. If, because of fear of privacy, many people
block third-party cookies, substantial ad revenues will be lost. For this section of
the collaboration, Team 1 will be discussing the how this movement will affect the
valuation of ad-revenue dependent companies.


REVENUES LOST

According to an article on nakedsecurity.sophos.com from August 12, 2015,
approximately $22 billion in revenue will be lost for advertisement companies that
rely on third-party cookies. More people are using ad-blockers. The author, John
Zorabedian, notes that the number of monthly active users (MAU) of ad blocking
software reached 198 million in June 2015, a growth of 41% since the same period
last year.

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Approximately one-third of users on the Internet are using a form of ad-blocking


software, which are preventing many companies to gain ad revenue. (BLOGS) By
continuing this movement, charges could potentially be assigned or increased to
users viewing web pages that would have normally been supported by ad revenue.
This could then lead to industry regulations and allowing legislation to control these
charges. (HBR)

VALUATION OF FACEBOOK

From the Pew Annual State of the Media report, Facebook and other ad-revenue-
dependent companies (Google, Microsoft, Yahoo, and AOL) make up 61% of digital
revenue, according to an article on The Atlantic website. Facebook has inadvertently
transitioned from desktop users to the mobile market. As the article notes, the
average American spends about 42 minutes a day on Facebook, accounting for 1 out
of every 5 minutes spent on a smartphone.


FORBES AND FREE ONLINE CONTENT

From Forbes Website Terms of Service, Free access to the content made available
to you on the Website is possible due to the paid advertising that appears on the

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Website. Without this advertising, we would not be able to provide you with this
content for free. In exchange for your free access to this content, you agree that you
will not, and will not permit any third party to, remove, obstruct, modify or
otherwise interfere with the delivery or display of advertisements on the Website.
By reading this, ad blocking will only affect the users of the free online content. If
you want to view the site for free, then you will have to disable the adblock and
allow cookies. However, Forbes has been awarded the TRUSTes Privacy Seal,
according to their privacy policy. They note, Our primary goal in collecting user
information is to enhance your experience on our website and the web. We use
aggregated (gathered up data across all user accounts) information to develop
content targeted to users' interests and to better the website user experience.
Forbes.com is committed to your privacy and other than as provided herein or after
receiving your specific consent, Forbes.com will not share any personal information
with any third party at any time, unless required by law.

CONFLICT OF INTEREST
As it has been previously discussed, third-party cookies help generate ad revenues
and allow for free Internet content. However, users privacy is still in question. Many
companies continue to have a conflict of interest regarding third-party cookies and
these uncertainties at hand.


DEFAULT AD BLOCKERS

As we previously learned, ad blocking will affect the advertising industry
significantly. However, by having ad blockers installed, it increases page load time,
protects privacy, and it eliminates the annoyance of interruptive ads. Unfortunately,
by blocking these ads, some of your favorite websites are going out of business. We
may be annoyed with all of the pop-up ads that we receive, but many companies are
not using third party-cookies for advertising. Instead, they are using them for
analytics as site views and traffic sources to better understand what sites people are
visiting and how long they are on those sites.

CRITERIA TO ALLOW THIRD-PARTY COOKIES

The criteria used to grant third-party cookies should consist of relevance, benefits,
reputation, and agreements. It is important for users to understand the relevance of what
they are accessing and how it may affect them in terms of data and information being
stored. By disclosing the benefits of tracking your data by a company beforehand, it
allows the user to not only understand what is being tracked, but it provides a level of
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trust between the user and the third-party tracking your data. The reputation of the
company is also very valuable to the user. The transparency and character of a company
provides a higher level of trust between them and the user, which increases the users
confidence that their data will be secure and properly used.
Having an agreement by the company that can be viewed prior to accepting a third-party
cookie, provides the user with the necessary documentation of who the company is, what
the company is using your data for, their security measures, and what they intend on
doing with the data once they are finished with their reporting. Being prompted to allow
or not to allow third-party cookies when visiting a website will allow a user to chose if it
will be relevant, beneficial, from a reputable company, and inform the user on how the
data collected will be used.

PRIVACY OF OUR DATA


As documented in previous sections of this collaboration, todays third-party
cookies have hidden processes. Users are not clear of what is being done behind the
scenes with their data being collected to track their web viewing behavior. With the
infinite amount of data collected and parties involved, the possibilities are very
difficult to comprehend.


BEHAVIORAL MARKETING

To achieve behavioral marketing according to 360i.com, Internet users are shown
online ads that vary based on any number of actions users may have previously
conducted, such as visiting an advertiser's site, shopping for specific items, or
viewing certain ads. As this may seem like an innocent way to target the behavior
of Internet users, the users generally have not give consent to do this. Also, as these
third-party companies are tracking the behaviors of users across multiple sites,
there has not been substantial value for the users to fully allow this type of tracking.
According to the Privacy Rights Clearinghouse website, there are several concerns
with behavioral advertising: Consumers may not be aware that data is associated
with their profiles; Consumers may not be able to view the data associated with
their profiles and have inaccuracies corrected; There are no maximum retention
periods on data and no security requirements for the retention of data, leaving it
susceptible to hackers and security risks; Information about minors may be
collected and used for behavioral advertising.

Now if you a user is on a specific website, that company has a vested interest in
what the user is viewing on their site. As long as this company is collecting
information based on their site, this can be considered justifiable. This company can
also ask to track the behavior of the user across multiple sites, provide a privacy
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policy, and state the reasons to track the data, which are all defensible by that
company and even seen as ethical.

Now it can be argued that third-party advertising using contextual targeting may
actually be relevant to consumers as the advertising relates to the information that
they are searching on that specific site. However, the data that this third-party is
collecting may not be relevant or secure, as noted in the section Criteria to Allow
Third-Party Criteria of this collaboration. Many companies that are anonymously
tracking your behavior do not have flawless security measures in place to protect
the data that they have gathered from the user. The users are surfing the Internet
blindly and dont know which information is being collected, the purpose behind the
collected data, and are not given a copy of the collected information.

Behavioral targeting leads to group-based discrimination by allowing your
information to be compromised by several companies independently. Companies
using a particular block of IP addresses coming from particular websites do this. As
noted from AllAboutCookies.org, private data collecting is a serious concern as the
constitution only covers government actions. However, there is insurance that will
cover you if your data is compromised. Third-Party Cyber Liability Insurance would
cover any and all financial or personal losses to the company or the individual.

In the short of it, consumers should have their privacy respected and be allowed to
give their approval before a third-party, without direct relation, begins tracking
their behavior.

BENEFITS OF THIRD-PARTY COOKIES


There are several benefits to third-party cookies. The biggest being that the Internet
isnt necessarily free. Users are paying for sites that are being surfed s with their
eyes and their data. Some websites, such as news or magazine sites, allow for a user
to view them up to so many times for free before having to pay. Advertisers are
operating off of users data, which in turn is directly paying for the Internet. By
utilizing third-party advertisements, the Internet has allowed many publishing
providers to receive funding without creating a virtual monopoly. Eliminating third-
party advertising would reduce revenues and would decrease the amount of
Internet channels or publishing providers to advertise through.

Consumers and users are also be benefiting by the convenience of third-party


cookies. Cookies remember the websites users have visited and the information
about certain forms, such as auto-fill for addresses and email information.
Personalization is also benefiting users by catering to the searches and content the
user frequents. Companies like Amazon and Facebook are geared towards the users
preferences and advertise product relevant to their search history. Lastly, Ease of

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Control is beneficial to users as it provides the ability to display, edit, and delete
cookies as desired.

WHAT TO DO WITH THEM?


Given all that this collaboration has taught Team 1, it was asked that we think about
what we would do with third-party cookies. The options that were give: a) nothing;
b) require Web sites to ask users before installing third-party cookies; c) require
browsers to block third-party cookies; d) require browsers to block third-party
cookies by default, but enable them at the users option; e) something else.

Team 1 unanimously agreed with choosing (b), require Web sites to ask users before
installing third-party cookies. This not only gives users the control over their data, but
puts the ball in the right court by forcing advertisers to disclose ALL information relating
to the use of user's data. Users then have the option to accept or not to accept thirdparty cookies and continue with the associated website or not. If third-party data is used
properly, ethically, and legally, then the purpose behind tracking behavioral trends and
other advertising data structures will be relevant, beneficial, reputable, and in agreement
with the consumers who are providing the data.

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BIBLIOGRAPHY
"All About Computer Cookies - Privacy Concerns on Cookies." All About Computer
Cookies - Privacy Concerns on Cookies. N.p., n.d. Web. 04 Dec. 2015.
<http://www.allaboutcookies.org/privacy-concerns/>.

"Behavioral Marketing / Reports / Search & Social Marketing Strategies / 360i."
360i. N.p., Sept. 2008. Web. 04 Dec. 2015.
<http://www.360i.com/reports/behavioral-marketing/>.

Bhat, Faizan. "Ad Blocking's Unintended Consequences." Harvard Business Review.
N.p., 12 Aug. 2015. Web. 02 Dec. 2015. <https://hbr.org/2015/08/ad-
blockings-unintended-consequences>.

Dwoskin, Elizabeth. "Ad-Blocking Software Will Cost the Ad Industry $22 Billion
This Year." Digits RSS. N.p., 10 Aug. 2015. Web. 02 Dec. 2015.
<http://blogs.wsj.com/digits/2015/08/10/ad-blocking-software-will-cost-
the-ad-industry-22-billion-this-year/>.

"Endress+Hauser Website Cookies." Endress+Hauser Website Cookies. N.p., n.d. Web.
02 Dec. 2015. <http://www.endress.com/en/endress-hauser-website-
cookies>.

"Fact Sheet 35: Social Networking Privacy: How to Be Safe, Secure and Social." Social
Networking Privacy: How to Be Safe, Secure and Social. N.p., n.d. Web. 04 Dec.
2015. <https://www.privacyrights.org/social-networking-
privacy#behavioral-advertising>.

Fagan, Keith. "Why We May Need Third-party Cookies after All."
IMediaConnection.com. N.p., 4 May 2015. Web. 04 Dec. 2015.
<http://www.imediaconnection.com/content/38596.asp>.

Filloux, Frdric. "The Rise of AdBlock Reveals A Serious Problem in the Advertising
Ecosystem | Monday Note." Monday Note. N.p., 8 Dec. 2014. Web. 02 Dec.
2015. <http://www.mondaynote.com/2014/12/08/the-rise-of-adblock-
reveals-a-serious-problem-in-the-advertising-ecosystem/>.

"FORBES.COM PRIVACY STATEMENT." Forbes. Forbes Magazine, n.d. Web. 02 Dec.
2015. <http://www.forbes.com/fdc/privacy.html>.

"FORBES Website Terms of Service." Forbes. Forbes Magazine, n.d. Web. 02 Dec.
2015. <http://www.forbes.com/terms>.

Kroenke, David M., and Randall Boyle. Using MIS. Eighth ed. Print.

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LaFrance, Adrienne. "Facebook Is Eating the Internet." The Atlantic. Atlantic Media
Company, 29 Apr. 2015. Web. 02 Dec. 2015.
<http://www.theatlantic.com/technology/archive/2015/04/facebook-is-
eating-the-internet/391766/>.

"Third-Party Vs. First-Party Cyber Risk Insurance: Protect Your IT Firm Right."
Techinsurance. N.p., 10 Jan. 2014. Web. 04 Dec. 2015.
<http://www.techinsurance.com/blog/cyber-liability/third-party-vs-first-
party-cyber-risk-insurance/>.

Zorabedian, John. "Naked Security." Naked Security. N.p., 12 Aug. 2015. Web. 02 Dec.
2015. <https://nakedsecurity.sophos.com/2015/08/12/adobe-and-
pagefair-claim-ad-blockers-will-cost-business-22-billion-in-2015/>.


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