Tag management business QuBit estimate that the new EU cookie law could cost UK businesses over £10 billion in lost revenue, and could see small firms going out of business.
The new EU Privacy and Communications Directive that comes into power May 26, will require websites to gain consent from users to allow the use of cookies to collect data, and estimates from research carried out over the last year by QuBit, for revenues lost from the new Cookie legislation, amount to a staggering £10 billion..
QuBit estimates that £10 billion in lost revenues and opportunities because of the new legislation will come from;
- Loss of new visitors through customers put off by the new cookie consent could total £2.6 billion.
- Businesses using mandatory cookie registration could cut visitor number by 23% and will lose a further £2.37 billion
- Loss from Retail optimisation could reduce online sales by £1.39 billion. By removing cookies, sites will no longer be able to offer recommendations and cross-selling opportunities based on previous sales eg the person who last bought this also bought.
- £2.92 billion loss from business migration, from businesses moving to countries outside the EU with more business-friendly laws, such as Luxembourg.
- Reduction from cookie consent on behavioural advertising is estimated to be £648 million. Cookies are used to target advertising based on users' previous online activity.
- Losses from affiliate marketing will lose retailers an additional £80 million
- Loss of data from web analytics – web analytics systems are cookie driven – will add a further £21 million
Over-burdensome legislation
Graham Cooke CEO of QuBit said last night at a roundtable on Cookie consent that "The UK is leading the World in ecommerce. The Boston Consulting Group estimate that the UK's current 7% of GDP – gained from ecommerce – will grow to 15%, but there's a danger that we won't reach that, if we have this over-burdensome legislation."
James Roper, Chief Executive of the Interactive Media in Retail Group (IMRG) commenting at the event said, "the ecommerce industry has enough problems already eg margins and this just adds to it." Adding, "In the UK there are 160,000 ecommerce retailers turning over £100,000 each and for the smaller players this legislation may just mean they give up."
QuBit is one of the first businesses to produce a one-click solution to Cookie consent and will be bundling Cookie Consent as part of its free OpenTag product
What do you think about the new legislation? Will it have an impact on your business? We'd like to know what you think?
