Third-party cookies have long been a contentious subject. Since legal requirements were introduced requiring websites that collect cookies to display pop-ups, marketers have been searching for ways to account for the shortfall in conversions and ad revenue from users opting out. With Australia’s new Privacy Reform underway, best practices for collecting, unifying, and using personal information will continue to be shaped by these legislative changes.
As this plays out, some websites have now begun requesting payment from those rejecting third-party cookies tracking as a work-around. Meta is one of the most prominent examples, coming under fire in the EU for its tiered pay-based model which it introduced to circumvent GDPR laws.
With the advent of this ‘consent or pay’ approach, which elevates the targeted advertising and consent debate to a new level, what should brands learn from this questionable marketing tactic, and what does best practice look like?
A question of online ethics
This ‘consent or pay’ model raises serious online ethics issues. Such practices put unnecessary pressure on users to pay for the ‘luxury’ of browsing websites without having their activity tracked and data collected. And those who aren’t willing to pay to tap out will forfeit their privacy. This situation sees businesses shifting the responsibility onto users, forcing them to choose between protecting their online activity – at a cost – and enjoying free online access.
Following on from a host of previous cookie consent infringements and data protection violations, it’s no surprise that this latest trend is also facing increased scrutiny and regulation. The UK’s Information Commissioner’s Office (ICO) recently cracked down on the practice, reviewing the UK’s Top 100 websites and issuing warnings to 53 of them. The European Data Protection Board (EDPB) has also launched a consultation process on a new set of guidelines, while Meta in the EU has been forced to offer a lower rate for an ad-free service and an additional free tier with ‘less personalised ads’ following the European Commission’s finding that its ‘pay or consent’ policy was in violation of the Digital Markets Act (DMA). As similar crackdowns look set to reach Australian shores, businesses need to re-evaluate the ethics of their policies and ensure DMA compliance.
First-party data led value exchange
The industry needs an open dialogue about ad-generated revenue strategies and marketing tactics that respect user privacy without financially penalising consumers. Arguably, the best-practice approach is to provide a value-exchange with the consumer that allows them to maintain control over their personal data, yet receive an ad-funded experience that is valuable, non-intrusive and in-context of the browsing experience.
Finding alternative solutions, like consented first-party data – i.e. data consensually given to brands by their customers or generated by their interactions with them – is essential for a more ethical digital landscape. Not only does first-party data respect users’ rights, but it also provides the most valuable, relevant, and accurate customer insights. This helps brands better understand their audience and deliver engaging, personalised experiences. Added to that, the provenance of the data and the associated consent is known and managed in-house, guaranteeing customer privacy and data protection. A win-win for marketers and consumers alike.
Many brands have already jumped on the bandwagon. Our State of Customer Engagement Report revealed that while just 19% of businesses globally said they were using mostly or entirely first-party customer data for marketing last year, that number soared to almost half (48%) this year.
Implementing the E3 formula
Companies should also take an overarching look at their customer experience approach and prioritise the ‘E3 formula’ of efficiency, expertise, and emotional connection. By ensuring streamlined processes, demonstrating proficiency in data handling, and fostering emotional bonds, companies can comply with regulations and build lasting trust with their customers.
This holistic approach is essential for thriving in today’s relationship economy, where customer engagement and access to knowledge are key to long-term success.
For organisations to succeed in the current climate, they must offer all three elements, tailored to the individual’s needs, to build long-term trust and enhance customer relationships at every stage of the life cycle.
The final word
Basic online privacy shouldn’t be a financial burden. Publishers, websites, and brands should look at other ways to capture revenue and target their customers, rather than relying on intrusive, high-pressure tactics.
Unlike ‘consent or pay’ tactics, first-party data is a ‘no strings attached’ alternative that builds trust and respects user privacy, while still providing the valuable insights that marketers yearn for combined with tailored, personalised ads.
Ultimately, consumers have a right to respectful, ethical online experiences – and steering clear of ‘consent or pay’ tactics is simply good business etiquette.