Will Meta’s ‘consent or pay’ ploy change the face of UK media in 2024?

With big tech deciding what counts as acceptable targeting, what effect will this have on the UK media landscape, asks Nikky Hudson (head of product – data and programmatic services, Nano Interactive).

From App Tracking Transparency to Topics API, Apple and Google are now the driving force defining what is acceptable targeting – and which data signals we can and cannot use. But behind the scenes, another gatekeeper is making moves which could be just as influential.

Owner of Instagram, Facebook and maker of virtual reality (VR) headsets, Meta is still battling with the EU for its own definition of consent, a key pillar of GDPR. Users were previously required to opt in to targeting as part of the company’s terms of service, so called ‘contractual necessity’ - but this was ruled to be illegal and resulted in a €400m fine. Its latest idea is for users to have to pay if they want to opt out.

Privacy campaigners are not happy – NOYB has filed a complaint against the company arguing that it will lead others down the same route. It claims that if ‘consent or pay’ were applied elsewhere, privacy could end up costing as much as €8,815 yearly per person. There are broader questions for the industry too. TV providers like Netflix and Disney have already introduced cheaper ‘with ads’ tiers, while Amazon’s Prime TV is set to ask users to pay extra for mostly ad-free viewing from the end of January onwards. TikTok has also been rumored to be trialling a paid ad- and tracking-free service. The question is – where will this end?

Is it fair or right that only those who can afford to pay should be able to opt out, even if others want to? Will the reputation of advertising suffer further damage as a result? And for advertisers, will ‘consent or pay’ result in greater fragmentation – even as they face up to signal loss? Or will it simply mean the parts of the industry that don’t rely on ‘consent or pay’ ultimately win and gain higher end brands and their respective agencies?

The ICO and consent or pay UK

Where Facebook’s action gets interesting – or messy, depending on your perspective – is in the UK right now. In November, the local data protection authority, the ICO, contacted major publishers, informing them they had a month to act. Specifically, to make ‘reject tracking’ on their consent pop-ups as easy as ‘accept’.

The introduction of Apple’s App Tracking Transparency for in-app consent provides a parallel for what might play out here. In that case, opt ins dropped to around 25% of the population. And our own research tells a similar story – that about 70% of the population is already taking steps to opt out of targeting. The ICO’s move may drive that figure higher.

One result of the ICO’s move could be UK publishers copying Meta’s ‘consent or pay’ approach en masse. According to Lucid Privacy Group, publishers face losing 50% of their consented traffic overnight, and thus “many UK publishers are actively exploring” the model. On the continent, media owners report that opt in rates jump to an impressive 94-99% when the only alternative to consent is payment. Let’s not forget they are also facing the existential threat of generative AI swallowing up their content, even as search traffic drops.

On the other side, as Lucid also points out, the ICO previously banned the Washington Post from taking just such an approach. To make things even more uncertain,

European regulators have yet to reach a consensus on their appropriate use on both data protection and competition grounds.

And just to add a final point of confusion, due to its size, it is said that what applies to Meta may not be the same as smaller publishers.

Towards a two tier web?

While we should not expect radical change – or indeed any clear decisions – overnight, for purveyors of the open web as opposed to walled gardens, there is a feeling of trepidation here.

As our own Behind the Mask survey in November showed, higher earners are effectively taking their own steps to mask their data from trackers already – they were 69% more likely to use private browsing and 65% more likely to use a VPN than the lowest. Usage of both methods increased all the way up the earnings scale.

Which raises the question, is Meta simply responding to what many people want – even if, as privacy campaigners would point out – not in the fairest way for all?

If most consumers don’t like, or indeed want people-based targeting, cross-site sharing of their data and profiling, rather than charging them for the benefit, perhaps we should be building alternatives to the cookie that simply allow for this?

If both Meta and major publishers shift successfully to a ‘pay or consent’ model, it may deal a major blow to the credibility – and indeed effectiveness – of advertising at large. On the other side, it is completely understandable why publishers (if not Meta) should be going down this route. Especially where they feel no other realistic option is on the table.

But there is another way forward. As we demonstrated with the launch of a post-cookie, profiling-free audience targeting solution last year. Bringing together the benefits of machine learning, plus the controls and checks of real-world panel data.

I’m not claiming we have all the answers yet. But a consumer-centric future without cookies is still possible. One that works for publishers too. And one that improves advertising’s image as well as its effectiveness.

Meanwhile, the fate of ‘pay or consent’ is still unclear. But it’s time to ask whether we are truly comfortable with the implication behind it. Is privacy a luxury only the rich can afford?

By Nikky Hudson, head of product – data and programmatic services, Nano Interactive