The European ecommerce market is forecasted to reach nearly $750 billion in 2027. In 2023, 78% of internet users in Europe bought goods or services online. With every online shopping search and every completed transaction, customers are creating and sharing personal data that includes, among other things:
- site searches
- products viewed
- time spent on a product page
- products added to cart
- purchase history
- credit card information
- email address
- product reviews
The collection and processing of all this customer data is governed by a number of global data privacy laws, depending on where the customer or store visitor is located. Many privacy laws are extraterritorial, and so protect the people in that law’s jurisdiction whose data is processed, regardless of where the company or other entity doing the processing is located. Online, ecommerce customers can be located anywhere in the world.
Among these laws is the Digital Markets Act (DMA), a regulation enacted by the European Commission (EC) that impacts users in the European Union (EU) and/or European Economic Area (EEA) and companies that collect data from users in these regions.
We look at how data shapes the ecommerce industry and how online stores can adapt their data privacy strategy to comply with the new consent requirements from DMA gatekeepers such as Google, with insights gathered from our partner network.
The role of data in the ecommerce industry
When a consumer visits your online store, the trail they leave behind is rich with information. Which products do they linger on? What are they searching for? Even how they got to the store and their abandoned cart tell a story about product or pricing interest that might not align with their expectations or budget.
Like every other industry, ecommerce is not immune to the rising global focus on data privacy. One approach that online shops are adopting in response to data protection regulations and consumer concerns is to rely less on third-party data and instead focus on gathering information from their own customers and website visitors. The data collected from these interactions can be highly valuable.
“The analysis of customer purchase history, browsing behavior, and preferences plays a pivotal role in shaping ecommerce marketing strategies, especially in the context of personalized product recommendations. They can segment their audience based on demographics, interests, and behavior, ensuring that marketing messages reach the right people at the right time. This not only maximizes the efficiency of advertising spend but also enhances the overall relevance of the content.”
Sarah Åsgård, Web Analyst, Nexer Group
What does the Digital Markets Act change for the ecommerce industry?
The Digital Markets Act (DMA Law) applies to users located in the European Union and European Economic Area, but its impact is expected to reverberate globally given the transnational nature of the digital economy.
The DMA law is designed to regulate digital “gatekeepers” — major tech companies that serve as a gateway for businesses to reach consumers via their platforms and services, such as advertising with Google or Amazon’s Marketplace. These gatekeepers meet specific criteria that include having a strong economic position, a significant impact on the international market, and operations in multiple EU countries.
Many of the gatekeepers’ core platform services as identified — and impacted — by the DMA play a large role in connecting ecommerce brands with their customers.
Ecommerce’s most used core platform services (CPS):
- Social media platforms – TikTok, Instagram, and Facebook, as well as video streaming platform YouTube, where ecommerce brands can advertise
- Amazon Marketplace and Meta Marketplace – where online stores can list their products for sale
- Google Shopping – enables users to search for products and compare prices at different points of sale
- Google Ads, Amazon Ads, and Meta Ads – brands can set up and manage their digital advertising campaigns
- Google Search – brands can place sponsored ads
Some of the DMA measures serve as real opportunities for ecommerce businesses to grow. As Sarah Åsgård, Web Analyst for Usercentrics’ partner Nexer Group, says, “…ecommerce brands can gain more comprehensive insights into the performance of their ads. Access to transparent data enables advertisers to understand key metrics such as click-through rates, conversion rates, and engagement levels more accurately. This, in turn, allows for data-driven decision-making and optimization of ad campaigns.”
Stricter data collection and processing guidelines
One of the key impacts of the DMA on ecommerce businesses is the requirement to obtain explicit user consent for data processing for advertising purposes. Gatekeepers must obtain clear and informed consent from users before collecting and processing their personal data for this purpose, and some, like Google, are already making changes to their policies, which impact non-gatekeeper companies.
This focus on explicit consent means that ecommerce businesses must ensure they have robust consent management processes in place to be able to signal that consent in order to continue to access core platform services.
Changes in user profiling practices
The DMA imposes tighter restrictions on user profiling in advertising. Gatekeepers and advertisers are prohibited from combining user data from different platforms or services to create user profiles unless the end user has given specific, informed consent for this purpose. This limitation means that ecommerce businesses need to shift towards privacy-focused practices, potentially moving away from highly targeted personalized ads.
Åsgård explains how these restrictions will be felt by ecommerce businesses: “Combining data from various sources allows ecommerce brands to create more comprehensive and accurate customer profiles. Restrictions on this practice may lead to less precise targeting, making it harder to reach the right audience with personalized content and recommendations. Without a holistic view of customer behavior and preferences, ecommerce brands may struggle to tailor their advertising efforts effectively, potentially resulting in less relevant ad content for users.”
Possible solutions include investing in zero-party and first-party data collection via their own platforms, such as websites or mobile apps, and using techniques like contextual advertising that relies on the content of the web page instead of individual user profiles.
More transparent access to data
With transparent data about marketing performance, ecommerce brands can refine and optimize their targeting strategies. Independent verification of ad performance fosters a sense of accountability and transparency between advertisers and the platform. Åsgård explains why: “…ecommerce brands can trust the accuracy of the data provided, ensuring that their advertising investments are yielding the expected results. This increased transparency can strengthen the overall trust between advertisers and platform providers.”
Hilda Ahlqvist, Digital Analytics Specialist at Nexer Group, adds: “Advertisers can allocate their budgets more strategically based on verified performance data. With a deeper understanding of which channels and campaigns drive the best results, ecommerce brands can distribute their advertising budgets more efficiently to maximize ROI.”
Non-discrimination and fair competition
Under the DMA, gatekeepers’ online marketplaces, like Amazon Marketplace and Google Shopping, are required to treat all advertisers equally. This means they cannot prioritize their own services or products in search rankings or ad placements. The aim is to create a more competitive online advertising ecosystem where businesses with smaller budgets have equal opportunities to compete.
Ahlqvist provides some tips on how ecommerce businesses can take this opportunity to stand out: “Ensure that your online store and product listings are optimized for mobile users, considering that many customers shop on mobile devices. Implement a responsive design and utilize a mobile-friendly banner to communicate important information. A seamless and user-friendly mobile experience can positively impact your brand’s visibility and conversion rates, enhancing the overall customer journey.”
The DMA also prohibits gatekeepers from using data collected from business users and their customers when they are competing with those same businesses. This could include a wide variety of data, such as web analytics, search terms, social media engagement, and purchase trends. There is an exception for data that is publicly available, since the gatekeepers don’t acquire this data from the businesses’ use of their platforms.
Interoperability between platforms
The DMA mandates that gatekeepers allow third parties to inter-operate with their services, enabling users to switch between different platforms. Data portability is also an increasingly common right that consumers have under international privacy laws.
Smaller, independent marketplaces are perfectly placed to make the most of this DMA requirement. They have the opportunity to integrate with core platform service marketplaces such as the ones by Amazon and Meta, opening the door to a wider target audience, improved user experience, and potentially higher conversions.
This opportunity also comes with some challenges. Smaller ecommerce brands and marketplaces will need to navigate technical, commercial, and regulatory challenges when integrating with larger platforms, which could lead to increased costs for implementation and maintenance.
Google’s new consent requirements
As one of the six gatekeepers under the DMA, Google has been preparing for the new rules to come into force in March 2024, and adjusting their EU user consent policy accordingly.
For its publisher products, Google has announced that companies using Google AdSense, Ad Manager or AdMob must use a Google-certified consent management platform (CMP) to serve ads to users in the EU, EEA and the United Kingdom from January 16, 2024 on (with enforcement starting on February 1, 2024). This enables brands to collect explicit consent under the requirements of the General Data Protection Regulation (GDPR), which aligns with the DMA’s consent requirements.
With the aim of combining data protection and marketers’ (advertisers) interests, Google has also announced that use of Google Consent Mode v2 will be mandatory from March 2024 for all websites using Google Analytics (including GA4), Google Ads (Google Ads Conversion Tracking and Remarketing), Floodlight and Conversion Linker. Their latest help article came to reinforce this deadline.
In other words, the best way to keep promoting your online store and products when using the Google services mentioned above is to combine a certified consent management platform like Usercentrics with Consent Mode v2.
With valid consent collection from website users and customers, you can continue to optimize opt-ins, measure conversions and retrieve analytics insights with Google Consent Mode, while achieving and maintaining GDPR compliance.
How ecommerce businesses can use consented data to create better customer experiences
Conveniently, the same tools that enable ecommerce companies to achieve data privacy compliance and continue monetizing with Google services also enable them to provide users with great customer experiences when requesting access to personal data.
Implement a Google-certified consent management platform (CMP)
Implementing a consent management platform like Usercentrics CMP or Cookiebot consent management platform (CMP) can streamline the process of obtaining consent from your shoppers. Both Usercentrics CMP and Cookiebot CMP also support Google Consent Mode and are Google-certified CMPs, enabling you to display ads to users in compliance with data privacy laws.
“Usercentrics’ integrations are simple plug-and-play solutions that enable our mutual customers to comply with global privacy laws and data protection regulations. It builds user trust by creating a transparent user experience with clear information.”
– Mandy Engel, Technology Partner Manager – Acquisition Specialist, Shopware
Usercentrics’ consent management platforms are designed to integrate smoothly with ecommerce platforms such as Shopify, Shopware, PrestaShop and BigCommerce, as well as Stripe for payment processing.
Usercentrics App CMP also provides full support for apps developed on iOS, Android, React, and Flutter, ensuring that you can also obtain valid consent across your online shopping apps.
Strategies to optimize consent rates
Enhance your consent rates by making the process transparent and user-friendly, fostering trust and willingness among customers to share their data.
Demonstrate clear value: Clearly communicate how customer data will be used, users’ options for providing or changing consent preferences, and the benefits of sharing their data. By illustrating how data sharing can lead to personalized shopping recommendations or exclusive discount offers, customers may feel more inclined to consent.
Simplify the consent process: Making it easy for customers to give consent can lead to higher consent rates. Aim for consent tools and user interfaces that are straightforward and user-friendly, including clear and concise opt-in forms or cookie consent banners written in straightforward language, are designed to avoid any manipulative design techniques.
Build trust: Employing design principles that present users with genuine choice to opt in demonstrates respect for customer privacy. Customers, in turn, feel their data is valued and treated with respect, not just used as a tool for aggressive marketing.
For more in-depth tips on how to boost opt-ins and consent rates on websites and apps to get the high quality data you need for your marketing strategy, check out our white paper: Optimizing consent data and user trust.
Using consented data for pay-per-click (PPC) advertising
Ecommerce businesses can leverage consented data to enhance customer experiences and optimize their PPC advertising strategies. Using tools like Google Consent Mode in Google Ads, businesses can comply with regulations while still accessing valuable insights for campaign optimization.
Conversion modeling, audience building, and performance tracking are all key components that, when used effectively, maximize results and optimize ad spend in a privacy-conscious advertising landscape.
Conversion modeling with Google Ads
- Consented data for modeling: With conversion modeling in Google Ads, ecommerce businesses can fill in the measurement gaps when users do not consent to cookies. The system uses Google AI to assess attribution paths for unconsented journeys, using observable data and historical trends.
- Optimizing bidding: Modeled conversions are integrated into Google Ads reports, impacting bid strategies such as Target CPA or Target ROAS. Businesses can optimize campaigns based on a more complete view of conversion data.
Creating remarketing lists
- Audience exclusions: While cookieless pings cannot be used to create remarketing lists, consented data allows for the formation of these lists. This helps in targeting users who have shown interest in certain products or services.
- GA4 audiences: Google Analytics 4 allows ecommerce businesses to create audiences based on consented user interactions (using the GA4 audience builder tool). These audiences can be used for targeted advertising within Google Ads.
Optimizing ad spend with Consent Mode
- Advanced Consent Mode implementation: By choosing advanced implementation, tags send cookieless pings when consent is declined, enabling Google to provide modeled data for GA4 properties. This helps in retaining insights for optimization despite the lack of consent. Combining it with Usercentrics CMP’s Analytics Dashboard and A/B Testing feature will get you even more insights to optimize user consent for data collection.
- Impact on performance: The use of consented data and conversion modeling may impact the performance reported in Google Ads. However, these models aim to minimize over-prediction, ensuring that ad spend is optimized based on the most accurate data available.
Best practices for ecommerce PPC with Consent Mode
- Implement Consent Mode: Ensure that tags are loaded and send cookieless pings when consent is denied. This enables behavioral and conversion modeling to fill data gaps.
- Consent Management Platform (CMP): Integrate Consent Mode with a CMP like Usercentrics CMP for web or mobile apps for efficient management of user consents across marketing channels.
- Monitor and adapt: Regularly test, validate, and update your Consent Mode implementation to align with evolving privacy regulations and Google’s documentation.
Monitoring campaign performance
- Reporting and bidding implications: The consent modeling data will appear in the “Conversions” and “Conversion value” columns in Google Ads, affecting all reports that use these metrics. This integration aids in informed decision-making for ad spend adjustments.
- Performance maximization: Ecommerce businesses should revisit their bidding strategies after the launch of conversion modeling to ensure optimized performance and ROI.
Stay updated on regulatory developments and gatekeeper requirements
Gatekeepers are required to comply with the Digital Markets Act’s requirements by March 6, 2024. As the date comes nearer, other gatekeepers may require businesses that use their platforms to make certain changes to align with the DMA or future laws.
The European Commission may also designate additional large tech companies as gatekeepers, and additional offerings as core platforms services.
Google could also implement further future adjustments to their EU user consent policy or the existing privacy requirements we’ve described above.
A good way to stay up to date is to receive relevant updates by subscribing to our newsletter to get the latest privacy news straight to your inbox.
Seek expert advice
Whether you need to help with technology implementation, data management processes, setting up compliant analytics or assessing your legal compliance, a good place to start is our global partner network directory.
