ePrivacy, a tsunami for advertisers?

The ePrivacy Regulation, also known as the “Regulation on Privacy and Electronic Communications”, complements the General Data Protection Regulation ( GDPR) and regulates data exchanged in electronic communications in Europe. Still under discussion in the European Parliament and Council, it should enter into force in 2019. But one of the key measures of this regulation has caused a lot of ink to flow: opt-in – for the deposit of cookies – will be performed on browsers directly, and no longer on websites. What consequences for adtech vendors, media publishers, and advertisers?

What is changing in the advertising ecosystem with the ePrivacy regulation

Cookies, these small text files stored on the Internet user’s browser, are used in the world of web marketing to anonymously* track and identify users. They are the technological support that makes it possible to accurately measure and analyse the behaviour of users on the web. The objective? To improve the various marketing efforts carried out by website publishers and advertisers.

Until now, Internet users could accept or refuse the use of cookies directly on the brand’s website, using a cookie management module (or “cookie banner”). But article 10 of the new ePrivacy regulation stipulates that from now on, the user’s consent to the installation of cookies will be given directly,  and once and for all, when the browser is first opened, and will thus apply to all websites in the same way.

What’s the risk according to digital professionals? That cookie acceptance rates drop drastically. Cookies are now the key to advertising measurement. With the growth of programmatic advertising in recent years, more than 60% of online advertising investments now use cookies! Julien Chailloux, vice-president of French adtech vendor 1000mercist, explained at a conference dedicated to ePrivacy in Paris that “reducing access to this type of data means reducing access to innovation for companies.”

Towards an increasingly unbalanced market?

The media would also be strongly impacted by this measure. According to Anthony Level, Director of Digital Regulatory Affairs at French media group TF1, “the media are not born free and equal when it comes to data”. Indeed, while platforms such as Silicon Valley’s tech giants or new media are in direct and permanent interaction with Internet users, this is not the case with traditional media. He explained that there are three types of information, namely:

• Declared information, collected from forms, for example
• The observed information, notably collected through web trackers (such as cookies) or audience measurement tools (Nielsen, for instance)
• Inferred information from Big data and AI

Today, however, the web giants capture most of the observed and inferred information: thanks to their environments, where users are “logged”, they have already been able to build huge socio-demographic and behavioural databases. By completing this with their significant investments in artificial intelligence, this huge pool of data offers them high-performance targeting capabilities for advertising and enable them to make large advertising inventories available to advertisers. And when we know that Google and Facebook already captured almost 60% of the total value of the online advertising market in 2017…

Anthony Level underlines this imbalance: “Asymmetric competition between players in a multi-media market leads to growth capture by a duopoly, and an increasing weakening of traditional media”.

As already shown in a report of the French Competition Authority early 2018, these two walled gardens are considerably favoured over independent publishers. “We have had many requests from agencies in the sector, pointing to imbalances and questionable practices. We have therefore opened preliminary investigations”, explains Isabelle de Silva, President of the French Competition Authority.

ePrivacy: what do users have to say about it?

On the one hand, Internet users do not want to be constantly solicited, or only when they need to be. According to Julien Chailloux’s example, within the framework of a project conducted for a bank, 1000mercis “was able to double the satisfaction of the people contacted by the company’s call centre” by better targeting Internet users thanks to cookies. These tracers would therefore be a powerful lever to better target prospects and minimise customer solicitations!

On the other hand, users want to be able to navigate easily on the Internet, and quickly find answers to their questions. For Alexandre Viros, general manager of French train travel seller OUI.sncf, data is entirely at the service of the consumer, particularly for pure-players. Identification data, contact data, navigation data… All these processed data have distinct objectives that allow to improve the customer experience. “Our project is to have 14 million different home pages, as many as the number of unique visitors per month on OUI.sncf.”

Finally, according to a study conducted by Accenture, 58% of consumers would switch half or more of their spending to a provider that excels at personalizing experiences without compromising trust. That’s a ‘yes’ to advertising, but only if it’s better targeted!

So, is everything to be reviewed in the ePrivacy regulation? “No,” answers Pierre Petillault, Deputy Chief of Public Affairs at Telco group Orange. Even if the project raises several problems, it proposes both a harmonised framework at European level, a strengthening of the confidentiality of electronic communications and a response to the phenomenon of “consent fatigue” (which refers to the weariness of Internet users when facing the repeated validation of their consent). What will Europe decide in the face of the slingshot of business and the media? See you in 2019 to find out!

*Users are tracked using identifiers (IDs), allowing them to anonymise their online activity.

Translated from French to English by Charles Rogers.