By Chris Lee

Behavioural targeting faces another hurdle with new European Union (EU) legislation coming into force this May. Behavioural targeted advertising requires the tracking of cookies – text files which enable people to surf the Web more easily based on their history – to target users with ads that are relevant to them. But from 25 May European laws will require that the “explicit consent” of Web users is obtained before cookies can be tracked, presenting behavioural targeted marketers with a dilemma.

Behavioural targeting suffered a blow two years ago when UK communications provider BT was found to be using Phorm behavioural targeting technology, which was perceived by many to breach individuals privacy in the manner in which it collected data.

Anticompetitive?

Could the European e-Privacy directive negative impact the competitiveness of European start-ups? One leading thinker believes so.

Nick Halstead, CEO of Twitter news site Tweetmeme, told TechCrunch Europe that the new legislation “clearly makes UK companies less competitive because sites we build will need to be plastered with warnings – and our competitors will not.”

Halstead argues that at each stage of a sign-up process companies can lose customers and that warning signs for cookies which are purely designed to keep users logged on out of convenience could lead many to believe that sites are “a privacy nightmare and won’t sign up.”

Helping users is key

It may be too early to second guess how companies will implement the new regulations, according to Jouko Ahvenainen from online audience targeting consultants Enreach Group Inc, but improving the customer experience will be essential going forward, he told NMK.

“The key is that users must get benefits if they opt-in or share their data, for example, to improve the user experience or help to find relevant services and content,” he said. “Typically users’ individual details are not necessary – for example, in ad targeting, segmentation and targeting can be done from anonymised data, and it is based on more on the interest and behaviour profile than on individuals’ details. It is important that all parties introduce responsible models to store and use the data.”

According to Ahvenainen, new models, like VRM (Vendor Relationship Management), are also coming to give more control to users, how they want to manage and use their own data. He sees this is an important trend, as is ability of mobile devices and tablet PCs to change the landscape, because many apps require registration and at the same time users must accept terms and conditions of use.

“The key things are really to define responsible models to use data and use data to help users,” he concluded.