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Cookies are small data files typically used by websites to provide customized experiences or to track engagement across the Web. Steps taken in recent years are changing the way that advertisers and site owners use these cookies and may change the face of digital measurement for years to come.
The EU initially passed a Privacy Directive requiring notification about the cookies used on websites, which was later updated in 2009. The update required countries to enact laws limiting the usage of cookies until the website received consent from the user accessing it. In May 2011, the ICO (the UK’s privacy and data protection authority) mandated user consent for all cookies not essential to a website’s operations by May 2012. The ICO recently released an update to the regulation details that clearly explained to marketers that cookies used for the purpose of web tracking and analytics would be impermissible without user consent.
What this means for websites in the UK is that they must request permission to place cookies on visitors’ computers unless the cookies are deemed strictly necessary for operations. Without knowing exactly how the EU Privacy Directive in the EU will affect web analytics, it is safe to assume that the directive will inhibit the ability to track online customer behaviors.
As an act of compliance, the ICO implemented an “opt-in” for site visitors to indicate whether or not the site had permission to track visitor actions on the site. Upon providing the prompt for users to indicate their consent in allowing the company to place cookies on their computer, there was a 90% drop in visibility into customer activity—meaning 90% of site visitors opted out of allowing the cookies on their computers. This is just one example where cookie participation is optional; however, if this same trend persists across other sites, the practice of web analytics will be changed dramatically.
If companies begin to lose visibility into customer engagement on the site, it will be much more difficult to optimize digital marketing campaigns. For instance, companies will be unable to capture what happens after someone clicks on their paid search ads. What differentiated digital marketing from off-line, traditional marketing was the fact that online marketing was so data driven. Decisions made about digital marketing campaigns had ample data to support reallocation of marketing dollars or entry into new spaces in the online world. The return on these investments will be difficult to measure and could slow down the growth of the digital marketing space.
In addition to capturing customer activity to track marketing campaigns, web analytics data is powerful in helping companies understand how to optimize the customer experience. This data is used in informing customer experience optimization. Without this information, companies will not have the ability to conduct tests on site content and layout, improve the shopping cart experience, or modify product or information pages to be easier to navigate. Depending on the percentage of site visitors that allow cookies to be placed on their computers, it will take companies much longer to capture enough activity to make informed decisions. In some cases, this may be entirely impossible.
The most obvious first step for any US company that has an online presence is to immediately evaluate any international sites that fall within the realm of the EU Privacy Directive. The legislation implemented will vary by country, so it is imperative to understand how each country interprets the directive. US marketers should consider the following steps to ensure that sites are compliant with any ICO enforcement action taken in the UK this coming May:
If you have any questions about the article above, or if you would like to receive more information about Site Privacy Auditing or have a more in-depth discussion about potential exposure under the new EU regulations, please reach out to Roy Bielewicz (roy.bielewicz@rosetta.com).