New privacy law will impact online advertising, claims web agency

McNaughton: possible threat to e-commerce sites

McNaughton: possible threat to e-commerce sites

Businesses that run websites aimed at UK consumers are being given up to 12 months to get their house in order before enforcement of the Privacy and Electronic Communications Regulations, which recently came into force in the UK. The main threat of the new regulations, which concern user privacy relating to the use of website cookies, will be to advertising revenues, claims Brant McNaughton of Ecce Media.

Cookies store small amounts of data, necessary for modern websites to function; storing shopping cart details, viewing history and preferences.

McNaughton says this new law will particularly affect cross domain cookies, used by search engines and advertising portals to deliver targeted advertising.

“An icon will be required to appear on the advert in question requesting permission to use cookies. Just how invasive these requests will be to users is unclear,” said McNaughton.

“The downside of this will be the possible reluctance of big advertisers to continue to fund advertising campaigns on the current scale if they are rendered somewhat impotent.”

McNaughton added: “This may lead to a reduction in the revenues a website brings in through displaying adverts – which may affect the profitability of ecommerce websites.”

Ecce Media said it was also unclear of the effect the new rules will have on cookie-based site traffic tracking software, such as Google Analytics, which is routinely installed on websites by the owners.

McNaughton said for the general nuts and bolts of an ecommerce website, not much will change.

“As most ecommerce websites detail the use of cookies to manage and run the shopping cart in their terms and conditions little, if anything will have to change to comply with the new ruling. The new law states you must now inform visitors to your website when cookies are used and for what purpose.”

The rules do not require websites to obtain consent from the user in the case of cookies that directly relate to the provision of a service explicitly requested by the user.

“Businesses that rely on advertising on their websites for revenue will no doubt have concerns moving forward and consumers will be hoping that these costs won’t be passed onto them,” said McNaughton.