The GDPR, or General Data Protection Regulation, is a law that came into force in 2018 with the aim of improving data protection on the internet. The implementation of this regulation raised several questions from online content providers, whose main revenue was based on targeted advertising. Vincent Lefrere, senior lecturer in digital economics at Institut Mines-Télécom Business School, co-authored a scientific article on the subject last July.
For content providers such as media outlets and news sites, online advertising is a significant source of revenue. The principle is simple: websites and media outlets collect certain data about their users and sell it to advertisers. The more data they have, the more targeted the advertising is for the user. But since the GDPR came into force, user data has been better protected, preventing content providers from selling it as easily as before. This raises the question of the viability of websites after the arrival of the GDPR: if online content providers lose part of their revenue, will they be able to maintain their productivity at the same pace and at the same level?
Study process and methodology
To answer this question, Vincent Lefrere and his colleagues looked at a number of factors. Using a representative sample of around 1,000 websites in the United States and the European Union, as well as several variables, they examined how content providers responded to the new GDPR laws. They examined the issue of consent for data sharing, as well as subscription features and advertising intensity. Their key method was difference-in-differences, which allows them to compare the evolution of sites exposed to the GDPR with that of sites not affected, in order to isolate the effect of the regulation. Thanks to these studies, they were able to obtain results that allowed them to differentiate between pre- and post-GDPR. They also classified the results into different categories, based on the location of the website (European Union or United States) and the location of visitors (European or American).
What the study reveals
Immediately after the GDPR came into force, the study shows a drop in advertising tracking (which therefore concerns cookies, data tracking, and targeted advertising). The study’s graphs indicate that audiences located in the European Union are more impacted than American audiences: the EU sees a greater decline in the mechanisms mentioned above, especially when visiting sites located in the United States.
In terms of audiences, overall traffic and social media engagement indicators (shares, reactions) show no deterioration. Only a slight decrease in the average number of page views per user has been noted, but this remains marginal and does not reflect a collapse in traffic.
In terms of content, however, there has been no significant change. Neither quality nor quantity has been impacted by the GDPR. European sites continue to publish as many articles as their US counterparts, with similar characteristics (text length, readability, diversity of authors, etc.).
Conclusion, two years later
Two years after the GDPR came into force, we can now see the results. While many players in the advertising industry predicted that the GDPR would be incompatible with the viability of online media, the reality is different. The study by Vincent Lefrere and his colleagues showed that websites have been able to adapt to the new regulations imposed on them. Content providers have implemented solutions such as consent mechanisms, reduced data collection, or, for a minority, subscriptions. These solutions meet the requirements of the GDPR while maintaining the viability of online media and the content offered to consumers, proving that the two can coexist.
In short, this research reminds us that the effects of regulations must be analyzed empirically and that they are often more nuanced than expected. Rather than systematically pitting “privacy protection” against “access to information,” the experience of the GDPR demonstrates that significant regulation is not a threat, but an opportunity: the opportunity to reconcile privacy and the vitality of online information.