Did The EU Just Break Digital Marketing?

For digital marketers rightly concerned about GDPR, it would be easy to think that was the only game in town. A massive new piece of draft legislation means they not only have to ensure data is securely stored, but they have explicit, freely given permission to use it for a clearly stated purpose.

That, however, would be a big mistake. It would mean missing the draft ePrivacy Directive which, just for good measure, is expected to come into effect in May 2018, at the same time as the GDPR's massive fines of 4% of global turnover become law. 

Marketers may think the existing regime offers a high level of privacy and that will be tightened by the higher bar placed on gaining permission to market to consumers under GDPR. However, that would be missing a rather crucial point about the ePrivacy Directive.

Strangely enough, I was recently warned by a lawyer that there was a massive sting in the tail of the new Directive. It was one we had all been somewhat aware of for quite a while; however, its impact seemed a little less severe given the huge debate around GDPR. 

The thing about the ePrivacy Directive is that it gives consumers extra control over cookies. Yes, the lawmakers who forced sites to put up those stupid "we use cookies, get over it" boxes with no alternative other than to click the "ok" or "got it" response button have decided to tighten the screws. With the new legislation, EU citizens will be able to block all cookies at device level. There is an argument that this will at least allow them to get rid of those annoying "click here so we can feel we've ticked a legal box" announcements.

On the other hand, the digital marketing industry is deeply concerned that this blanket approach doesn't allow consumers to pick and choose with whom they don't mind dropping a cookie so they get a more tailored experience, both editorially and in advertising. However, there is another side to this -- the decimation of the digital marketing industry in the EU.

Research company IHS Markit has been crunching the numbers, and it believes that digital advertising contributes €526bn to the EU's GDP. This is in direct earning and also the growth it delivers to EU companies. However, with the new rules in place, its dire warning is that this worth could be halved. This is because, the researchers claim, two-thirds of the value of digital advertising is derived from data, and use of data drives 90% of growth in the market. 

Put very simply, cookies allow sites to identify a user, learn a little more about them and then target them better with more relevant messages. That not only improves the user's experience, but crucially, it means that user's visit is worth a lot more to the site than someone they don't recognise and so cannot sell their attention at a premium.

The fear is that consumers don't want to share their data with some sites and so will simply say no to all cookies, although they may have given reputable sites and publishers permission to place a cookie on their devices if offered a tailored choice, rather than an all-or-nothing approach.

There is a hope in adland that the implementation of the Directive may be delayed until after May to avoid a double whammy of new rules alongside GDPR. There is even a little hope that now that the IAB Europe has called out the EU on the rules they might be relaxed somewhat. 

The silver lining for marketers is that the regulation is potentially not finalised. Also, it was only published this January, and so turning that into an approved Directive that is translated into all the various languages required, before being consulted on with local regulators and then enforced is highly unlikely to happen before May 2018.

Digital marketers should be very concerned, however, that this piece of draft legislation could slash the worth of the industry in half -- but hasn't raised too many eyebrows because everyone has been focussing on GDPR. We've all been watching the shark and have not noticed the barracuda fast approaching from behind. 

1 comment about "Did The EU Just Break Digital Marketing?".
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  1. Mike O'Neill from Baycoud Systems, September 14, 2017 at 4:59 a.m.

     "lawmakers who forced sites to put up those stupid "we use cookies, get over it" boxes with no alternative other than to click the "ok" or "got it" response button"
    This is not true. The law did not require these. The boxes were stupid, but they were the online ad industy's manipulative response to what the law did require, which was not to track people without their consent. There were options to respond in a more meaningful way but they chose to ignore them.
    Tracking involves storing or deriving an identifier from a user's device or browser so they can be recognised in subsequent interactions and their online activity collected. This is  used to build a profile about people so they can be targeted with ads.
    The 2009 ePrivacy directive just made the point that this could only be done if the reason for accessing the browser storage, and processing the personal data collected, was explained and the user gave their "freely given, specific & informed consent.
    The draft ePrivacy regulation is in fact a bit more forgiving than the old directive because it allows further exemptions to the need to ask for consent for access to storage. There will possibly be an exemption for "first-party" analytics though we will have to wait to see if this makes it into the final draft.
    The important difference, and why the online adtech industry is up in arms about it, is that the penalties and possibility of civil damages are now in line with the GDPR. When fines were low defying the law had few risks.
    This will no longer be the case after May next year.

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