The looming ePrivacy Regulation is creating a new battleground in Europe: the race to own consumer login systems, for better or worse.
When and how publishers arrive there depends on their business models and markets. But in Germany, the login strategy is a tactic many are adopting to ensure their business’ sustainability, should they have to abide by the proposed ePrivacy law and gain consumer consent for all cookie use.
So far, the favored approach is login collectives made up of major publishing groups and nonpublisher partners. The reason: One publisher’s single login strategy doesn’t likely have the necessary scale to rival the login platforms of Google, Facebook, Amazon and Facebook. However, a combined login structure that spans multiple publishers, IP firms and other e-commerce brands potentially could.
A large proportion of German publishers are planning some form of login strategy to stave off the expected loss in advertising revenue, should the proposed ePrivacy law stand, according to a new report from VDZ, the Association of German Magazine Publishers. The same report has estimated that together, the German media market will lose upward of €300 million ($372 million) in yearly ad sales if the proposed version of the ePrivacy law holds.
Spiegel is among those examining login strategies as a contingency plan if the strict restrictions on cookie gathering are confirmed. “Doing more to own logins is definitely one of the most probable elements of the solution,” said Spiegel Online CEO Jesper Doub.
However, Doub also believes the rush to adopt login strategies could punish smaller brands and publishers in future, given the changes will result in the establishment of yet more walled gardens.
“I am afraid that if the regulation stays that simplified, free access to information and news will move behind registration and login hurdles,” he said. “This might not be impossible to do for big brands and publishers, but both the costs and complexity along with user behavior will make it impossible for smaller brands and publishers to survive, strengthening the big platforms’ and brands’ position in the market.”
It’s a view many other publishers interviewed as part of the VDZ report share. The hope is that in showing the extent of damage the regulation would cause to the media industry, the VDZ and its publisher members can convince the German government to push back on the terms of the law.
Programmatic advertising and retargeting will be among the areas hit hardest, according to the VDZ research, with 53 percent of the respondents polled saying they estimate the changes they’d have to make for the ePrivacy Regulation would cost their annual sales to tank by at least 30 percent. An even higher percentage — 67 percent — of publishers said they’d expect to lose more than 30 percent of sales on all programmatic advertising that uses retargeting, according to the same research.
Thanks to the arrival of the General Data Protection Regulation, the German market has already started on the groundwork for mass login systems. So far, there are two in Germany: One involves Axel Springer, auto manufacturer Daimler and German airline Lufthansa; broadcasters RTL Group and ProSiebenSat.1 lead the other.