Media: All about ... The e-Privacy Directive

Will new regulations jeopardise behavioural targeting?

Targeting ads online could be about to get harder (Pic: Jason Heath Lancy)
Targeting ads online could be about to get harder (Pic: Jason Heath Lancy)

Those pesky, meddling Brussels bureaucrats have been at it again. Incorrigibly cheeky scamps that they are. It always seems that we don't get to hear about what they're up to until it's almost too late - and then we have to run about like headless chickens as we desperately try to save bendy bananas or the Great British Banger. Or, indeed, the good old-fashioned cookie.

What happens typically is that, at a loose end one afternoon, a handful of European Union funsters will get together and (in a light-hearted attempt to justify their vast salaries) propose some amendments to the last set of amendments to an obscure piece of legislation that has been hanging about on the statute books for donkey's years. Like, say, the Privacy and Electronic Communications Directive. It's the sort of title designed to make most normal people's eyes glaze over.

And that's the point, really. The amendments will be announced, responses from interested parties will be canvassed (then possibly ignored) and a timetable for implementation will be published. And then, a matter of weeks before the legislative deadline, someone somewhere will wake up to the implications and realise that a whole industry may be under threat.

In this case, we're talking about web commerce. The amended e-Privacy Directive (as we'll call it to try to stop your eyes glazing over) will require site operators to obtain "explicit consent" to store cookies - the data tags that record your online behaviour and preferences.

This could have major implications for the whole user experience online - and the biggest potential problem for the advertising industry is the damage it might do to the business of behavioural targeting.

And, of course, behavioural targeting online is the media world's 21st century big idea. In theory, at least: it's something everyone talks about but no-one really does, as yet, in a truly meaningful fashion.

1. The "wake-up call" as regards amendments to the e-Privacy Directive, which are due to come into force on 25 May, was made by the Government's Information Commissioner, Christopher Graham, whose office will be responsible for policing the new rules. His speech drew attention to the fact that the Department for Culture, Media and Sport, whose responsibility it is to integrate the directive into UK law, has been dragging its feet - making it more than likely that UK companies will be faced with the prospect of a last-minute panic to be compliant.

This created widespread anxiety. But, in pointing out that there is wiggle room in the day-to-day implementation of the directive, he also sought to reassure: "We recognise that the internet as we know it today depends on the widespread use of cookies and there are, of course, legitimate business reasons for using them. So we are clear that these changes must not have a detrimental impact on consumers nor cause an unnecessary burden on UK businesses. One option being considered is to allow consent to the use of cookies to be given via browser settings."

2. At one end of the spectrum, there are those who suggest this is all a storm in a proverbial tea cup. They argue, variously, that: previous attempts to regulate in this have failed because the whole business is just too fiddly; in any case, the amendments, when you read them carefully, are still uselessly vague; and it won't be hard to offer once-and-forever catch-all permission pop-ups that most users will be happy to click.

At the other end of the spectrum, there are those warning of a potential meltdown. As one such put it: "If users are presented with a pop-up every time a cookie is going to be set, they are simply going to go to sites outside of Europe that are not hampered in the same way. It will put us at a major disadvantage compared with American sites."

3. Behavioural targeting has been at the centre of a number of important deals recently. Microsoft, for instance, has been working closely with the data services company Experian for many months now - and it recently signed a partnership deal with the "retargeting" specialist Criteo. Omnicom has also just concluded a data-sharing deal with Microsoft, following similar agreements with Yahoo! and AOL.

4. Targeting and privacy issues also made the headlines last week when the EU announced it was to bring forward new legislation this year, forcing Facebook and other social networking sites to give users more control over the use of their personal data.



- UK website owners play down the likely impact of amendments to the e-Privacy Directive. As one senior source puts it: "This will introduce additional responsibilities for advertisers and ad networks but compliance shouldn't be burdensome. Although it is difficult to predict the long-term impact on the ad market, my understanding is that, in the US, where a comparable framework has been in operation for some time, the impact has not been unduly detrimental."

- In any case, media owners tend to be ambivalent about behavioural targeting, not least because it gets in the way of trading - while it enhances the value of some parts of their inventory, it marginalises others.


- Many advertisers fear the bad publicity that may surround privacy issues, while remaining sceptical about the long-term gains that behavioural targeting can deliver. Because, when it comes down to the fine granularity of this, advertisers fret about who it is they should actually be trying to reach.

In practice, many find themselves advertising to people who've just bought their product. Which hardly seems to be a canny use of resource. The only real target group that matters in this context (consumers on the verge of purchasing a rival brand) is, in privacy terms, the most problematic of them all.


- For many casual observers, coverage of the European Union directive shenanigans will serve as yet another reminder that the use and abuse of personal data by advertisers continues to be an issue. Others will wonder what all the fuss is about.