Will the cookie crumble in May 2011?

Marketers are encouraged repeatedly by their peers to be as targeted as possible in the way they connect with their audiences.  Building campaigns that offer a personalised tone, using relevant content, at the right time are key factors in achieving success. Over time increasingly intelligent ad serving technology and processes have been developed to deliver these aims. However, forthcoming ratification of the EU’s Directive on Privacy and Electronic Communications, penned to come into effect by May 2011, could hinder further developments in this field and have subsequent ramifications to the online marketing industry as a whole.

So what’s all the fuss about?  In amongst pages and pages of other litany, the new law includes an article that demands that websites receive every visitor’s prior consent before setting cookies on their PC.  An exception exists where the cookie is “strictly necessary” for the provision of a service that has been “explicitly requested”, the idea being cookies are required for the use of a shopping basket, or to remain logged into your favourite social network.  As it stands, this law seems set to hamper the prospects of the online advertising industry as whole, particularly the serving of behavioural ads.  The big question then is how “strictly necessary” will be interpreted?

The recital of that article (designed to guide the Government on implementation) states that where it is technically possible and effective, in accordance with the relevant provisions of the Data Protection Directive, the user’s consent to processing may be expressed by using the appropriate settings of a browser or other application.

Since the directive was first published, the advertising industry has relied on this as justification for saying that cookie settings already in use within a user’s browser indicate consent. However, the EU’s Privacy Watchdog (The Article 29 Working Party) disagrees. They have pointed out that most browsers accept cookies by default.  In its view, to comply with this law, visitors should be explicitly asked to give their consent.  There therefore seems to be confusion about what the eventual outcome will be across Europe. On a UK level the Department for Business Innovation and Skills (BIS) – which is tasked with applying the directive in the UK – has offered only limited guidance. Its recommendation repeats the ambiguities in the source material and said that it will leave the ICO (the Information Commissioner’s Office) to deal with compliance.

The EU’s Privacy Watchdog has at least extended an olive branch of sorts to the industry, stating that one expression of consent can cover thousands of sites, rather than a consent per ad model. Because it is generally ad serving platforms that deliver ads, set cookies and map engagement rather than individual advertisers it seems that the ball is back in court of the technology providers. 

Practical application of the law may involve ads containing explicit warnings and links to information pages offering more information about the cookies they seek to set.  This will offer the user more transparency and is something that the Internet Advertising Bureau (IAB) is already supporting and working towards.

Whatever the conclusion, effective targeting continues to be key for the ad industry. Our own European research underlines the importance of targeting, with 66% of European consumers saying that online advertising needs to be relevant to their interests and a further 51% saying they prefer digital marketing campaigns that contain targeted special offers.  These findings show a need for a non intrusive method of targeting that can serve the needs of industry and consumers alike, calling for more education from industry bodies and peers to make sure that both parties are supported.

Pete Rowe

Peter Rowe has held the position of Managing Director, affilinet UK, since 2008 and is a member of the European Management Team. He has full operational responsibility for all areas of the UK business including Sales, Affiliate Management, Client Services, Marketing, Strategy and Finance.
As part of the team that launched affilinet UK in late 2005, Peter has helped establish affilinet in a highly competitive marketplace and been integral in recruiting and growing key accounts. Prior to joining affilinet Peter was Head of Operations at dgm and a Project Manager for HP Global Services working in the Telecoms practice. Peter holds a BA (Hons) in Business and Finance.
Interview with Peter Rowe.

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