The new ePrivacy Regulation proposed in the European Parliament could have a huge impact on Europe’s economy as well as accessibility of the internet, according to new analysis from financial research company IHS Markit co-funded by the IAB Europe.
According to the firm, more than half (66%) of digital advertising spend relies on data, with its use behind 90% of the growth of the digital advertising space.
With digital advertising contributing €526 billion to the European Union’s annual GDP, the new restriction – obstructing data collection and its use in advertising – could cause up to half of the market to disappear.
The study also found that data-driven advertising is “over 500%” more effective than advertising without data, and is key in proving an ad’s viewability.
If data cannot be used, the report suggests that advertisers will cut back on their expenditure, and Townsend Feehan, the CEO of IAB Europe, believes this should be a significant “cause for concern”.
“The alternative to data-driven advertising isn’t just less targeted advertising – it’s a digital ad industry half the size that it is today. That has huge consequences for Europeans’ experience of the internet, for the EU economy and for the existence of a free and balanced media,” he added.
Attitudes in Europe
Researching attitudes towards sharing data and the possibility of having to pay for content, market research company GfK ran a survey of 11,000 internet users in 11 EU countries to find only 30% of them would pay for content in place of online ads.
Even those willing to pay aren’t prepared to splash out more than €3.80 per month – a fee way too low to cover the cost of online journalism.
According to the study, more than two-thirds of Europeans (68%) have never paid for online content or services that they use and a similar proportion (69%) would be happy for their browsing data to be used in advertising if it kept access to content free. Meanwhile, the majority (88%) admitted they would spend much less time online if they had to pay and 80% claimed to prefer free content with advertising over paid-for content.
“The latest research shows that the appetite for paying for online content simply doesn’t exist to a viable degree amongst EU citizens. Ignoring this fact is a recipe for economic, social and political disaster,” Feehan concluded.