Over recent years, the future of monetization for online publishers has been turned upside down. For example, the advertising-based revenue model is now undermined by ad budgets moving to GAFAM, disintermediation and loss of margin, adblock and programmed disappearance of third party cookies, difficulty to value your own First-Party Data, to name just a few!
What's more, this context is likely to be further unsettled following the CNIL's latest cookie collection recommendations. The CNIL, the National Commission on Informatics and Liberty, is an independent French body who regulates the use of data collection online. Of course, regulations and recommendations are welcomed by readers and give them more control over their personal data. However, the increasing ease for users to decline cookies is going to have a large impact on consent rates and thus reduce ad-based revenues for publishers.
Admittedly, over the past decade, publishers have been diversifying their sources of revenue online (mainly thanks to premium models and directly-generated reader revenue, including subscription and donations). But, the proportion of readers who are ready to pay for information is still very low and cookies play an important role in monetization.
Until now, few options were available for publishers to solve this issue. But, in summer 2020, everything changed. The French Council of State opposed the CNIL's position on cookie walls, stating that they didn't have the right to forbid or to discourage them. Cookie walls are back in business!
Cookie walls definitely sound appealing and interesting to publishers (read more about what cookie walls are here). However, a great number of questions still remain unresolved:
- What are the legal implications?
- How are cookie walls perceived by readers?
- What experience should be offered to make readers stay?
- What are the first initiatives on the issue?
This is exactly what will be covered in this white paper which follows on from the webinar organized by Didomi and Poool in October 2020 with the kind participation of lawyer Etienne Drouard. You can watch this webinar again here (in French). We thought we'd summarize the ideas brought forward in the webinar to help publishers in their cookie wall considerations!
Please note that the elements or images displayed in this document do not have a legal value. Inquire among your advisors and/or service providers to have a juridical opinion on the subject.
Part 1 - What does the law say on Cookie Walls?
Even though the CNIL decided to discourage cookie walls in 2019, the Council of State went back on this decision, stating that it didn't come under the jurisdiction of the CNIL to forbid this practice. It's comforting news for the publishing and advertising industry, who had been contesting the CNIL's previous decision through representative organizations (Geste, SRI, IAB, Udecam, AACC, Fevad...).
But what is the current situation regarding the use of cookie walls? Are they to be favoured or banned? To help you to see things more clearly, let's take stock of French and European regulations concerning content access mechanisms, and the concrete solutions available to publishers.
Cookie walls: A still ambiguous legal status
Given that cookie walls block access to content if cookies are refused, they are a useful solution for publishers to continue to monetize their audience, which is key for their survival. However, the legal status of cookie wall usage is still very ambiguous and has never really been clearly defined, putting publishers in great legal insecurity.
The European ePrivacy Directive states that cookies that are not necessary to provide a service have to require the user's consent. This 'consent' has been clearly defined by the GDPR (General Data Protection Regulation) as “any manifestation of free, specific, informed and unequivocal will by which the data subject agrees, by a declaration or by a clear positive act, that personal data relating to them can be processed”.
So, despite being aware of what legal consent it, we don't yet have the verdict on whether cookie walls prevent freedom of choice (an essential component of consent).
However, for lawyer Etienne Drouard it's clear: if at least two options are available to access a service (a cookie wall and something else, such as registering as a user or paying to subscribe), the cookie wall does not hinder the free consent of users because an alternative is offered to them.
A practice inline with consumer law
The 2019 EU Directive on consumer protection states that it is legal to ask for compensation in exchange for the supply of a service, and that this compensation can include personal data. We all experience this every time we use a search engine or a social network: the service is free in exchange for the collection of personal data.
The problem is therefore not the collection of data as such, but whether this is done in a transparent manner, with the free consent of the user. Each user must be free to decide what compensation they are prepared to give to a service provider in exchange for access to their service: either they pay, or they register, or they accept cookies which allows publications, via advertising, to monetize the provision of the service.
Believing that everything would be free, without any compensation, is an economic illusion, not a legal requirement.
Since the announcement of the public rapporteur, the CNIL has revised its recommendations and finally accepts the principle of cookie walls (article 18 of the deliberation of September 17th, 2020) under certain conditions, assessed on a case-by-case basis.
In the latest draft of the ePrivacy Regulation, which will provide the clear European legal framework that everyone needs, the door still seems open to cookie walls. It confirms indeed that a cookie wall does not necessarily deprive the user of a free choice; in other words, it does not “twist the user's arm” by forcing them to consent.
In our opinion, publishers can therefore still use cookie walls without fear, as long as they offer clear information and alternatives for accessing their services. Obviously, this does not apply to essential services, such as public services, which everyone should be able to access freely without having to consent to anything.
Part 2 - What's the reader's Cookie Wall experience?
Cookie walls are a very recent and fairly complex topic that requires a good understanding of legal requirements and issues before user experience can be considered. Above, in part 1, we were interested in the legal framework around cookie walls (notably one that will inevitably evolve).
Despite this uncertainty for the future, this legal framework allows us to imagine what a cookie wall could look like on a publisher's website. So, this second part concentrates on what the wall itself would look like, its visual aspect, as well as the possibilities it presents for publishers and, above all, the implications that it will have on the user experience.
Naturally, this part should be understood as giving advice, thoughts and ideas on the topic. It should by no means though be taken at legal and dificitive value. The topic is still too new and uncertain for this to be possible.
What does a Cookie Wall look like from a reader's point of view?
Probably the first and most important question is what a cookie wall will look like from the reader's point of view. What experience will they have and what options are available to them?
As we have seen in part 1, the very idea of a cookie wall is to offer users a choice between 2 or more options to access content (whether this be the whole website, a section or even just a single article). For example:
- Give consent to cookies and tracking to access content
- A second option could take several forms, such as asking for subscription or registering as a user
Nothing is definite at this stage, and other alternatives could be given, such as making a one-time payment or donating. Below is an example of a cookie wall where the reader is faced with 2 options: giving consent or subscribing.
At what point is the cookie wall shown to readers?
- On the homepage during the first visit;
- And / or within a content (as is currently the case of a paywall);
- And / or when accessing a category or section of the website (e.g. archives)
Is a Cookie Wall just an opportunity to increase consent rate?
The consent rate is a very important indicator for publishers. It's estimated that, on average, a user who declines cookies (for ad purposes) yields 50% less revenue from advertising for the publisher (although this data varies across businesses).
The cookie wall is therefore a valuable tool that could be used to maintain high consent rates, and save any revenue from advertising. Given this, we're expecting cookie walls to be used more frequently in the coming months by a wide variety of content producers (digital-only publishers, 'traditional' publishers, etc).
However, importantly, the cookie wall is simply one more step among many for the user's experience on your site.
From the user’s point of view, the cookie wall is just one of the many walls that they might be confronted with. A publisher could employ multiple wall-types in the user journey. For example, we can picture the following 3 walls employed as part of a paid model strategy:
- Step 1 - Consent wall
- Step 2 - Cookie wall
- Step 3 - Paywall
So, the cookie wall is one additional step in an already well-build user journey, which, as well as including different walls, includes various other requests (such as push notifications, suggestion to register to the newsletter...).
As we know, over-solicitation generally doesn't bring anything good for readers and therefore doesn't do any good to publisher’s aims either. Keeping this in mind allows publishers to raise questions on several levels:
- How to orchestrate the user’s journey
- What is the main aim for each of these stages
- Which action should be proposed at each stage
The cookie wall is not a mere opportunity to increase consent rates, but a great opportunity for publishers to try and create a lasting relationship with their readers. This will also help a publisher to gain viable revenue in the long-term rather than simply maximizing short-term gain.
Other industries, such as gaming or applications on mobiles, have delved into this topic. We will come back to this point in the next section.
Two examples of Cookie Walls in the United States: the Washington Post and NPR
The subject of cookie walls may well be opening up in France (albeit slowly). Some have already began to implement their own initiatives, whilst a few have had cookie wall strategies in place for a while.
The Washington Post may have been one of the first private media outlets to initiate a form of cookie wall. The idea is rather simple. On a first visit to the WP website, three options are proposed in order to “support quality journalism”:
- Option 1 - Free: read a given number of articles per month on the condition of giving consent to personalized, targeted advertising.
- Option 2 - Paid: taking out a digital subscription of $60/year which gives a user access to all content (site + apps) AND (an important point) means they consent to personalized, targeted advertising.
- Option 3 - Paid: taking out a digital subscription of $90/year which gives users access all content (site + apps), with the added benefit of ad-free navigation and no tracking for personalized, targeted advertising purposes.
If you wish to access the Washington Post site, these are the only 3 options available. Notably too, this window cannot be closed and the only alternative is to leave the site. This tough strategy is a rather interesting one, as it is the first example of its type, and allows us to see the interest for a publisher in employing a cookie wall.
National Public Radio (NPR) is an American public service media outlet which uses a different type of cookie wall. Again, the main idea is simple: upon a first visit to the NPR.org site, there are two possible options proposed within the frame of “Data Protection Choices” :
- Option 1 - Free: accept cookies and access the NPR content on its traditional site, as like any other website, using analytic technologies, social media functionality and personalized advertising that rely on cookies.
How do you feel about these examples from a user experience perspective? The value propositions are clear and options presented to readers enable them to understand that the publishers require a value exchange.
The readers have a choice, either use a downgraded version (for NPR) or leave the site (for the WP) if no option suits them. From the user experience point of view, we could say that these options are useful for initiating a dialog with readers on a fairly sensitive subject. Ultimately, the media needs its readers, directly or indirectly, in order to produce quality information.
What can we conclude about these experiments from a regulatory perspective? Could these banners be used by a French publisher? Are they conceivable in Europe?
In our opinion, it's the Washington Post example (even if it is praiseworthy) that raises objections, on two levels, if it were to be implemented in France or Europe.
- Non-compliance with the RGPD and ePrivacy. The first free of charge option effectively offers the user free access to the site of the Washington Post only as a quid pro quo of their consent for personalized, targeted advertising. However the readers don't have the possibility of knowing precisely what they have consented to nor which partners can also access this data
- It doesn't seem conceivable that advertising can be integrated into two options. The first two options for the user both involve cookies and tracking, one free and the other paid. It's easy to see that this doesn't make sense for a cookie wall as the subscription offer should surely be cookie-free, and even with no advertising whatsoever.
The Gamestar Cookie Wall example
Gamestar is a much more recent example used by a German company. The publisher, who is part of the Webedia group, has set up a cookie wall which gives two options. Either access content for free by accepting cookies, or pay to become a member and get a cookie-free experience.
Unlike the Washington Post, the Gamestar example is more accomplished as much of information concerning cookies and tracking can be found on the site, particularly in terms of objectives and responsibilities of managing who has access to data. With this cookie wall, the publisher has made it possible to see the list of partners and its objectives.
For more cookie wall examples, take a look at our blog article: 6 Examples of Cookie Wall Alternatives.
As you'll have seen, cookie walls are much more important for publishers than simply optimizing the requesting of consent. It is, first and foremost, another opportunity to open up a dialogue with readers, particularly regarding paying for content. Asking for a value exchange and building a relationship with users represents the future of monetization for the media.
Within this framework, and regardless of the revenue model chosen by a publisher, a strong and defined brand and optimized user experience constitute the base of any sustainable relation and revenue model.
If the cookie wall fits into this framework, then we can imagine they will have a more lasting place in publisher's strategies. If the choice is clear and open, then cookie walls can be a welcomed and popular option for the readers. But it's still early days. Whether from a legal or user experience standpoint, nothing has yet been defined with certainty and everything remains to be seen. The cookie wall clearly represents great potential for experimentation and innovation, and publishers like NPR, Gamestar and The Washington Post have paved the way.
This vision for the media industry is shared by Didomi and Poool. Cookie walls, and what they represent, are at the heart of this vision for both our companies. This is why we have collaborated for the past few weeks, working together towards a first version, a POC (proof of concept) of cookie walls, which will soon be available for publishers. If you share this vision and are looking for partners to assist you during this important stage, then contact us here!