You can’t have your cookie and eat it…

Now before you ask, I’m not talking about the tasty baked treat loved by a sesame street character with a voracious appetite, but rather the less appetising internet variety. You can have your chocolate chip cookie and eat it you’ll be glad to know, but for the other type of cookie it is a different matter. 

The cookies I’m talking about are the ones that have been central to online privacy debates since the dotcom boom and more recently EU legislation governing how they are to be gathered by websites (not the Cookie Monster… nom nom nom). For those of you in the marketing world this is an important piece of internet legislation to be aware of.

In the UK, the law has recently changed to make sites more open about how they track their users, requiring sites to give consumers notification that their site uses tracking files, and a chance to opt in or out of such measures, or else face penalties.

Now, this all seems fairly straight up and not something you could really pick a bone with – who wants to be followed unknowingly? It ain’t nice in a dark alley and it ain’t nice online.

However, if websites that track users now have to allow people to opt out (presuming a good chunk will) the advertising model that is central to the online revenue stream for many sites is under threat. Naturally, the majority of the UK’s largest websites have made no signs of compliance with the new laws so there’s no immediate danger but it is still worth considering the implications.

You see, web advertising is far cheaper than alternative media and therefore trying to increase its value is vital to the strategy of many sites. User tracking helps this in two ways: firstly, it fixes the basic mechanics of tracking which adverts get clicked, and how often. The second method, though, is the key: cookies track your internet activity – your searches, the sites you’ve visited, what you’ve downloaded etc. So, when you search for flights to Spain, the next time you go online an ad might pop up on a website with the latest hotel and flight packages for the Costa del Sol! Quite smart really, even if sometimes it can be a tad hit and miss.

Ultimately, better use of data and tracking means better advertising and a better user experience. The information economy needs it to survive – Google and Facebook included.

If online consumers now decide to opt out of these tracking files in their masses then the implications are quite simple, the advertising model will collapse, leaving two alternatives: paying for the services a site offers, or letting it shut; a case of your money or your (online) life.