In the last year the EU has introduced new cookie legislation set to be implemented by the UK government by May 2011. Article 5(3) of the Privacy and Electronic Communications Directive states that consent must be given before companies are allowed to place cookies on a web user’s computer or retrieve cookie information already stored there. Although The Department for Business Innovation and Skills (BIS) disagrees, the interpretation of exactly what is meant by ‘consent’ is causing much debate in the online advertising industry. Edward Tidjink, Managing Partner of Addvantage Media, assesses the potential impact of the legislation.
This law has potentially many far reaching consequences for our industry. If taken to extremes, one interpretation would be that, if enforced, every website that you visit will have to ask explicitly whether you are happy to be served cookies before giving you access to content. It may sound far-fetched but that is exactly what some campaigners are lobbying for.
Shortly after the directive was published, the IAB issued a statement countering this view, arguing that consumer’s choice of browser control settings should be sufficient to comply with the consent requirement, however it’s clear many privacy campaigners, and indeed lawyers, do not agree with this principle of de facto consent.
There’s clearly still much debate to be had on this issue but the chief danger is, if enforced without due care and clarification, this ruling will not only greatly alter the consumer’s online experience, but will also put in motion a highly damaging overhaul of how the UK internet industry operates, from analytics to behavioural advertising.
Consumer inconvenience
Beyond the confines of marketing or advertising, the legislation seems to disregard the practical inconveniences of choosing not to install cookies – quite apart from the irritation of constantly having to answering the same question each time you visit a different website.
In the vast majority of cases, the role of a cookie is to make a consumer’s interaction with frequently visited websites smoother; eliminating any extra effort on their part. They might record how long you spend on each page, what links you click, and even your preferences for passwords, page layouts and colour schemes. They can also be used to store data on what is in your ‘shopping cart’, adding items as you click. Cookies do not exist to ‘spy’ on consumers. They are there to make the process of surfing the web easier.
The million pound question is – are the general public aware of this? The truth is, most consumers don’t have a clue what a cookie is, let alone the impact it will have on the way they browse the internet. The only thing imposing a law requiring websites to ask ‘do you want cookies?’ will do is add to the confusion, and needlessly raise concerns about data privacy.
Education, education, education
The industry and bodies such as the IAB and government have a clear responsibility to educate consumers on the impact these issues will have, allowing them to make a clear, informed decision.
The majority of internet businesses rely on advertising funding. Take away the advertising, and website publishers will be forced to make very difficult decisions on how to monetise their content.
Take paywalls, for instance. News of the World and The Daily Telegraph are joining the ranks of national newspapers putting content behind a price tag; however as we’ve seen, this is simply not a viable business model for the vast majority of publishers.
With the decline in users associated with premium content, there comes an obvious decline in space interest from media buyers. It seems inevitable that many would simply not survive the transition.
UK disadvantage
BIS also appears to be forgetting that the internet is a global phenomenon, so any damaging or off-putting legislation affecting UK websites will simply result in an increase of traffic to overseas sites – this would put an end to online display advertising as we know it. It seems prudent to bear in mind at this juncture that online advertising is one of the only facets of the UK economy that has seen growth in the last two years.
US websites would be available to browse scot free and have the ability to pass on their cookie reliant adverts; while UK websites will just present you with the constant, nagging ‘do you agree to be served cookies?’ question wherever you go.
Certainly, there needs to be some form of policing against misuse of data online. Technological malware, such as cookie ‘respawning’, is clearly unacceptable practice, undermining users’ expressed choice not to have that cookie present on their machine.
However, instead of focusing its time on penalising those who participate in this kind of malpractice, the government is potentially damaging the economy by passing this law without considering the consequences. Quite simply, in most cases taking cookies out of standard internet surfing is comparable to taking a sat nav from a confused tourist. It’s unworkable.
It is down to trade bodies and the industry as a whole to stand up for the vast majority of advertisers who are compliant to the IAB’s Code of Best Practice, and lobby the Government to educate consumers on this issue. Failure to do so will ultimately only disadvantage consumers, and the UK industry.
By Edward Tidjink
Managing Partner
Addvantage Media
www.addvantagemedia.com
