A bit of a stray from the norm this week on this blog, we're going to talk about some legislation that has just been ratified by the EU. Before I start I should point out that I am not a lawyer and so this is just my opinion on the situation. But if you are a regular reader of this blog you will have remembered that in November last year I wrote a post about the EU cookie law that was introduced. Recently, this has been ratified by a working party on the subject to clear up some interpretations.
Advertisers and publishers would rather not ask users if they want to be tracked for advertising purposes because users' answers could damage their businesses. But it's hard to avoid asking that question: the Working Party's interpretation of the law is, in purely legal terms, the most compelling interpretation, however flawed and unhelpful the law itself may be.
So the compelling story is that so far this is a bad thing for advertisers and Publishers - it really affects their business models. They are going to have to ask users if they want to be tracked on their advertising and if they don't, then they will lose out on a whole host of information. Click through rates of display advertising have plummeted and stand at about 0.1%. It is generally accepted for display adverts that the main purpose of them is for branding to encourage users to come back to the site at a later date. It is of course more or less impossible to track this if you can't draw information from the advertising back to the sale of a product. This is of course done by linking a tag loaded on an advert with a tag on a sale complete page with the use of a cookie.
Now we have suddenly affected a group of Marketers who aren't necessarily trying to do any behavioural targeting, but they are trying to monitor the effectiveness of their advertising. If they can't do this, they'll move to a more favoured method that means they can monitor this. More of that in a minute, but if the death of the newspapers was started by the web, the death of online news could be started very easily in this new ruling.
What about networks like YouTube? Every time I embed a YouTube video on my site, Google is going to drop some cookies on my computer so that it will know that this video has been viewed and by who. This sounds like not only are you going to have to expressly ask permission every time you look at a website, but potentially at every single bit of embedded content.
Finally there is an opposite end to the advertising - if I pay money for Google to put me on their sponsored search results, I want to be able to tell if causes more people to buy my product. If it doesn't, then I'm not going to spend that money. How does this work? Well it links up the information that is passed in the tag of the landing page that says that you have come from a paid keyword, with the information passed in the tag of the thank you page. How does it do this? Yep - they have the same cookie ID.
What about online optimisation tools like Omniture's Test and Target or Google's Website Optimizer? These tools allow you to do A/B testing on your site, but to do this they need to know which one performs better. Yep, they need that cookie information.
And in all the examples above we haven't really done anything that the user would notice, that would infringe on their personal data rights, but what we have done is optimised our business and increased revenue.
This whole this strikes me as an odd way of working the system. It's a bit like banning glasses because people are drinking too much alcohol. Not only are you having a big effect on things like Web Analytics which are mainly harmless ways of getting information on how to optimise your site, but the behavioural advertising guys are just going to come up with new ways of getting around this issue.
I'm hoping that the UK Government takes a stand and doesn't ratify it. Unfortunately the only ones arguing against are the IAB and the Publishers, who are concerned about their revenue streams. Really we need one of the big analytics companies to make a stand - an Omniture, a Webtrends or a Google.