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Links vs. Cookies: A Tale of Two Web Economies

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I credit Jonathan Strauss of link analytics company awe.sm with coining the phrase “the link as the cookie.” I’ve been borrowing that expression for the past year because it not only describes his service and the meta concept of linked data, but it also encapsulated what intelligent landing page optimizers had been doing for some time – taking parameters from URLs and using them as rules to dynamically deliver relevant and persuasive content.

Strangely though, the data revolution, at least as it relates to advertising, seems to have passed the link by. The cookie is where much of the excitement and focus around new data sources for targeting and optimization rests. “BlueKaing” data (a term I heard for the first time a couple of weeks ago) has now become a verb to describe the re-emergent cookie economy. This unbridled buzz caused Andy Monfried of Lotame to caution the display community last week to look beyond the cookie for targeting.

“The holy grail is not just cookie targeting, but to see the linkage between the top of the funnel and the bottom.”

Yet the cookie is being used by every color of advertiser including (or especially) Google to target campaigns to “audiences” or to “in-market” rather than to specific sites. Some of the excitement around cookie data is justified but it is also fraught with a host of challenges to publishers and advertisers, almost none of which protect the best interests of either.

In contrast, the link economy is immune to the issues swarming around the cookie economy, even furthering my consternation about why the link economy is so grossly undervalued and under-hyped. The reality is using the link as a set of rules for content/ad delivery has implications much more far reaching than landing pages and URL shorteners. As anyone who has made money on the web through transactions can attest, since the inception of the commercial web, the link is its most valuable currency.

The first thing to realize about the size and value of the link economy is that the engines of it are the three of the largest web properties in the world - Google, Facebook and Twitter. The second important point about the link economy is that it is natively cross platform - search, email, mobile, social - links can get distributed and can work anywhere. The third important point about the link economy is that it provides an immediate trigger for any media object - video, audio or text. The last and maybe most important value of the link economy is that it is both realtime and lasting. One link can get you a million visitors in a day – it can also get you million visitors over three years.

Contrast the link’s value to cookies that are driven by a small percentage of online media spend, are not cross platform, have no native trigger mechanism to launch media and whose value decreases quickly until it is zero. This is why it blows my mind that BlueKai can raise $20M when in the scale of these two web economies a company like bit.ly commandingly leveraging the link economy should be seen as creating incredibly more long-term value. Somewhere there is a huge disconnect happening. Maybe it's just happening in my mind, though I doubt it.

I doubt it because we have already witnessed the link build three of the largest and most effective media channels on the web; PPC, email & affiliate. Links also serve as the core logic function for facilitating every major transactional site from Amazon, to eBay, to Craigslist. I have no doubt that the value and economic impact of the link will continue to increase exponentially over the coming years far outpacing any media value cookies are creating. In fact, as many of you may already be thinking, it is really not a fair comparison. But as a marketer who has built a career off the link, I often find myself wondering where is the buzz, where is the appreciation, where is the strategy, where is the technology* for the most simple, native and valuable web attribute of all, the link?

* VigLink and their competitor Skimlinks are two new and cool technologies I've seen recently.

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Comments

Here are two examples of technology/services that underscore the value of the link:

www.zemanta.com - If your content is relevant and of high quality, 10s of 1000s of bloggers will link to it.

www.tynt.com - As a publisher, you can make sure that a backlink travels with the content that people copy from your site - not as a policing mechanism, but as a valuable encouragement for readers to click-thru to the whole story.

Great post!

Thanks Jim. Those are both nice link technologies. Thanks for mentioning them. I look forward to following their evolution as commercial services that can drive higher revenue for publishers and/or more ROI for advertisers.

It really all comes down to what type of re-direct is going on. bit.ly is all 301 re-directs so no adserver can get in there or it will become a 220 re-direct and then SEO doesn't work. It's like google has created a little walled advertising garden around 301 re-directs. An imaginary line that nobody will cross. With an adserver you can turn yourself on to a firehose of different advertising and monetization methods. With a link re-direct you are limited to SEO.

Brian - Those are great points about adservers & redirects but there are certainly site-side solutions to these problems that publishers can benefit from if data was parsed or passed, no?

Great post Jonathan, thanks for bringing the humble link back into focus!

Also an internet marketer from the world of SEM, now entrenched in helping publishers monetize their content with alternatives to display advertising - I too see the disconnect between the value of cookie economies and link economies.

One challenge is the perception of the link economy: publishers are hesitant to add links. It leaks visitors, ad-impressions, link juice. With the fear of falling foul of paid-links to the search engines (because of their 'immediate triggers', links drive traffic and link equity) the appeal of running a cookie passively grows significantly to a publisher.

So, an ecosystem that encourages publishers to link more often to relevant merchants, facilitated by the right technology (such as ours :) ), is a win-win-win scenario: win for publishers who can monetize outgoing traffic without having to nofollow, win for merchants who get more links to their site, and SEO benefit around them, and win for users who discover what they want more easily.

Its hard to do both - the *guarantee* of value from a link coupled with the passing of SEO benefit = paid link. Affiliate links work in the ecosystem above because there is *no* guarantee of compensation - you may have not convinced someone to buy, or worse your cookie loses to the last click model.

This is part of the big issue of multi-attribution, how do the intent generators ( http://cdixon.org/2009/09/29/why-content-sites-are-getting-ripped-off/ ) get adequately compensated for linking to a merchant if they are so far up the purchasing funnel?

Of course if you nofollow your commercial links, or use javascript based links, its easier to build a link economy beyond CPA, but its not quite as elegant.

To come back to your thoughts about a link's value, aside from SEO or CPA, if publishers can be helped together analytics on their outbound links or use them to dynamically drive behaviour (another cool technology doing this is Chango.com re: inbound search links), I agree it could be much more powerful, flexible and transportable than the cookie mechanism (so long as its deployed publisher side re: Brian's comment).

Nicely stated. I think Links and Cookies aren't mutually exclusive.

Jonathan, great points (saw your comment to fred as well). I think Skimlinks is a fantastic idea that deserves broader attention.

I think one of the issues is that the ad tech space is pretty insular, with a lot of really smart people in the industry talking about these issues, visions, tradeoffs, but until clients and publishers both get smarter on the topic, there probably will be few real solutions as there is so much obfuscation, marketese and gobbledygook spouted by most providers.

Darren - you are right and in retargeting in display they are mutually inclusive. Though that may be a problem in and of itself.

Roy - you are right too. there is a load of hype on the buy side and very little in the way of tools on the sell side.

Darren - you are right and in retargeting in display they are mutually inclusive. Though that may be a problem in and of itself.

Roy - you are right too. there is a load of hype on the buy side and very little in the way of tools on the sell side.

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