6th August 2019

New Cookie Guidance from ICO Could Cripple Online Businesses

David Walsh

Launched on 3 July, new guidance on cookies from the Information Commissioner’s Office (ICO) will have far-reaching implications for online businesses big and small.

The new Privacy and Electronic Communications Regulations (PECR) will directly affect how companies are permitted to use cookies on their websites and mobile apps, with the biggest change being that only ‘essential’ cookies are to be permitted without the explicit consent of the user.

Significantly, the cookies for Google Analytics (GA), perhaps the most powerful tool companies have to monitor, track and report on their website’s performance, and other analytic tools are considered ‘non essential’. If users choose not to enable GA or other web analytic cookies, there will be serious repercussions for the effectiveness of online marketing and advertising - it could very well mean the end of analytics as we know it.

What is a Cookie?

“A cookie is a small text file that is downloaded onto ‘terminal equipment’ (e.g. a computer, smartphone or smart TV) when the user accesses a website. It allows the website to recognise that user’s device and store some information about the user’s preferences or past actions.” - ICO

How will this change affect my business?

Currently, most credible businesses deploy analytics cookies by default, and give users the option to easily disable them. The new guidance from the ICO means that businesses will now no longer be able to deploy non-essential cookies on the launch of the site. They will have to wait until users explicitly approve their deployment, and the truth is that - given the option - very few users will choose to do this.

Without this information coming from cookies - such as discovering how a user came to land on the website or being able to track the journey of a visitor as they move around the website - companies will end up being blind to what's happening in their business.

What Does This Mean, Really?

It is important not to underplay how sizeable the impact this fundamental change to the use of cookies will have. Even in small cornershops, owners can follow a customer as they move around the store, see what products they look at and for how long, and note what displays catch their attention. Shop owners can then use this information for their visual merchandising, follow-up advertising and so on in order to curate a tailored service and more profitable business.

If analytic cookies aren’t enabled, website owners will have no idea how people came to discover and visit their sites, for example, whether it was from a social media advert, a referring website or if they used specific search terms in Google. Without this information, companies will struggle to effectively target their advertising to maximise return.

What Are the Long-term Consequences?

The longer term consequences could see an increase in prices as companies feel bound to spend more on advertising and in promoting their services. The concern is that even an increased spend on things like banner ads, social adverts or paid search will struggle to provide consistent results.

Essentially, without tracking cookies in place it will be difficult to see which advertising channel is proving effective - retailers simply won't be able to ensure that their promotional activities are optimised.

What Can My Business Do About These Changes?

First, website operators must decide what they want to do about this latest requirement - we suspect many will choose to wait and see what the big companies do first. It may take time for this ICO guidance to filter out across UK businesses. In the meantime, it is important to familiarise yourself with the new guidance, which is available in detail on the ICO website.

The basic three-part rule is that you must:

  1. Tell people the cookies are there
  2. Explain what the cookies are doing and why
  3. Get the user’s consent to store a cookie on their device

How We Can Help

After speaking with your data officer and deciding how best you want to proceed for your business, get in touch with us today and we will help implement your strategy.