German publishers expect to lose more than 30 per cent of their digital advertising revenue if the proposed ePrivacy Regulation is implemented by the European Commission in the next year, shows a new study from the Association of German Magazine Publishers (VDZ).
Along with the General Data Protection Regulation (GDPR), which ensures citizens' personal data is used transparently and fairly across all EU countries, the ePrivacy Regulation places a particular focus on unsolicited marketing, use of cookies and confidentiality.
'The business relevance of the ePrivacy Regulation in Germany', published on 29 January, aims to assess the financial impact of the regulation on German media. The findings are based on 24 responses to a survey and eight interviews with marketers and managers from publishers including Zeit Online and Axel Springer.
Forty per cent of those surveyed by VDZ estimated that more than 30 per cent of their total digital advertising revenue will be lost in light of the regulation. More than half of the publishers also said they expected to lose more than 30 per cent of their programmatic advertising revenue, which the study identified as being the most affected by the changes.
Survey respondents also believed revenue generated from native advertising will decline by an average of 9 per cent, and that e-commerce sales, including digital subscriptions and merchandising, will go down by an average of 15 per cent.
The second half of the study looked at the long-term impact of the regulation on the digital ecosystem, including the user experience for news consumers, the personalisation of online content and the delivery of ads and subscriptions tailored to their interests, all of which will be affected.
“If [the regulation] comes about in its current form, what the user will experience will be more like a walled garden," one of the survey respondents wrote.
Alexander von Reibnitz, managing director, print and digital media at VDZ, said that one measure publishers can take is to get readers to become registered users, something Germans outlets have already been focusing on more in the last few months. However if the regulation in its current form goes ahead as planned, it is unlikely they will have enough time to build a solid base of registered users.
The ePrivacy Regulation is designed as a complement to GDPR, which comes into effect in May 2018.
The study is available online here.
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