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Online privacy changes may hike Australian eCommerce prices
Wed, 7th Feb 2024

Australian digital marketer Sagar Sethi has warned that online shoppers could see prices soar by up to 25 percent in the near future due to imminent changes to online privacy practices. The removal of cookies, scheduled for later this year, is expected to cause businesses to enhance expenditure on digital advertisements, a cost that will inevitably be reflected in consumers' bills.

Sethi, the founder of Melbourne-based digital marketing heavyweight Xugar, commented on the changes businesses will have to adapt to. "Retailers have relied on cookies for many years. The change in the way online marketing campaigns track users and roll out is huge. The ramifications will filter down to the consumer; and with the cost of living now becoming the cost of surviving, shoppers aren't going to be happy with prices going up!" he stated.

These alterations are in response to rising concerns over consumer privacy due to the invasive nature of these trackers. Whilst advocating for privacy, these shifts signify an impending upsurge in advertising costs. With businesses now deprived of this essential tool necessary for efficiently targeting consumer preferences, they'll inevitably be pushed into more expensive advertising methods to maintain online visibility.

Sethi further elaborated on the pivotal role cookies have been playing. "Third-party cookies are used without consumer consent, which is where the problem arises about privacy. It means that as people browse the web, any ads they may click on could potentially be sharing third-party cookies, allowing them to track your online behaviour. This is how we receive targeted ads that are specific to our preferences, which many people are wary of due to concerns over security and privacy", he explained.

He also pointed out the inevitable chain of events following the removal. "Companies wishing to run a digital marketing campaign will have to market harder in more varied ways, which then leads to advertising costs going up. Retailers will naturally have to pass these costs on to shoppers. Without these bits of data identifiers, companies will have to use first-party data and a high degree of personalisation in order to increase the effectiveness of an advertisement," he said.

Even though recent developments appear to benefit privacy and security, Sethi predicts new challenges and obstacles for businesses ahead, eventually causing shoppers to bear the brunt of these changes. With no room left for leisure and non-essential expenses, he remarked, "Aussies are cutting back more and more, but the prices keep getting higher and higher. It's frustrating to be living like this, with so little leeway to enjoy life."

Lastly, Sethi emphasises the importance of quick action and adaptation on the businesses' part. "Thankfully, businesses do have a lot of options available to them to reach and engage with shoppers without having to spend a lot of money, but they need to act quickly before cookies disappear. The ones that do prepare will win in a cookieless online environment."