GDPR fuels €445,000 sales fall for online firms in EU

online shopBrussels may have hailed GDPR for “bearing fruit” but European online businesses are threatening to wither on the vine, with site visits, page views, and revenue all down significantly since the regulation came into force 14 months ago.
A new academic paper, entitled Regulating Privacy Online: The Early Impact of the GDPR on European Web Traffic & E-Commerce Outcomes, claims to be the first project to investigate the impact of GDPR on recorded web outcomes.
It probed 1,500 online firms, including 128 of the top 1,000 global sites, which collectively attract over 1 billion weekly visits from EU residents.
Across all sites, the report estimates that page views have fallen 9.7% and recorded site visits have dropped 9.9% post-GDPR. Among e-commerce sites, it estimates that visits have gone down 5.6% and revenue has crashed 8.3%, with the average loss of income being €445,000 (£408,000) since May 2018.
The authors reckon that one of the possible reasons for the decline in traffic and revenue is that GDPR has increased the risk that comes with email and online display advertising.
The report states: “The higher costs of using personal information can affect personalised marketing channels that drive online traffic. Both email and online display advertising rely on personal data in the form of cookies or the email lists. As such, the quality and quantity of advertising through these channels may have fallen.”
The researchers point to other studies that suggest that email campaigns trigger 7% of traffic to ecommerce websites, while display ads fuel 35 of visits.
They also note that overall website traffic may have changed, because users have become more aware of how their information is being used. They write: “GDPR enforcement [has] brought ubiquitous privacy notices on websites that serve EU users. By increasing the salience of privacy concerns, these notices may have changed user preferences for how much time users spend online and which sites they frequent.”
It concludes: “More work needs to be done to quantify the benefit to users of these privacy laws in order to better understand the trade-offs. GDPR may not actually be delivering that much value to the majority of users.
“Regardless, it is likely true that GDPR has impacted different sites in very different ways, and regulators may want to consider this when working on future legislation.”

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