The new EU cookies law – due to be implemented in less than four weeks – could cost UK firms a ‘scary’ £10bn in lost sales, advertising revenues and businesses moving overseas.
According to an analysis by online customer data platform QuBit, the change is “one of the most important” in web development of the last five years.
Its ‘worst case’ analysis suggests that business could lose £2.6bn as new visitors are discouraged from visiting websites that request consent for cookies.
Some companies may opt for mandatory registration in order to avoid losing the personalisation and tracking capabilities offered by cookies, says QuBit. It cites research that shows registration can hit visitor numbers by up to 23% – costing a potential £2.37bn.
The web analytics market – put at £104m in value – would be hit as their services become less valuable if a significant number of people start to decline cookies. That, says QuBit, could cost the sector £21m.
The loss of the impact that personalised recommendations and targeting have online could hit online sales by £1.4bn, says the analysis. Behavioural advertising could also be hit, costing up to £648m in lost sales. Similar impacts on affiliate marketing, which uses cookies to track user activity and claim payment for a sale, could cost up to £80m.
Finally, QuBit says many businesses will move abroad to avoid the cost of compliance with the directive, costing some £2.9bn in total.
QuBit chief executive Graham Cooke said: “Cookies have become an integral part of the online economy and so anything that discourages their use is going to negatively impact on this market. What many of the analyses to date have ignored is the indirect impact on businesses that rely on cookies for their services to function, rather than just the direct cost of lost sales. Put together the potential cost of this directive is frankly scary.
“There is, however, a solution to this problem. Our assumptions have been based on a strict interpretation of the law by site owners and regulatory authorities, and a worst case estimate of the impact on cookie consent. Site owners can minimise this cost by doing their best to explain the benefits of cookies to end users and by making the consent process as simple and seamless as possible.
“Meanwhile, the authorities can minimise the impact by interpreting the directive in a way that enables companies to soften the consent process and thus maximise acceptance.”
Earlier this month, in a separate study by KPMG, 95% of UK businesses admitted they have done nothing about implementing the changes, despite the May 26 deadline.
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