On May 26, 2012, a new law went into effect, spurred by the EU Data Protection Directive. It essentially requires websites and ad networks that use behavior-tracking cookies to inform their users, and more importantly, ask for their explicit consent to track. Websites that break the rule can be fined as much as £500,000 ($806,451), as reported in The Guardian on April 13.
Online advertising is often distinguished from traditional media by its ability to offer marketers greater targeting capabilities. Using cookies and other browser or pixel-based tracking, advertisers have the ability to collect information on user interests, activities, demographics and geography that can then be used to segment audiences into ideal target groups. Segmentation helps to provide more meaningful and effective ads, both for brands and consumers.
The full effect of the UK cookie regulations on online ad investment won’t be known for quite some time, but even if most users are unconcerned, marketers in the UK, and around the world, are paying close attention.