In a significant development for the affiliate marketing industry last week the Information Commissioner’s Office (ICO) defined cashback tracking cookies as “strictly necessary.”
This landmark decision is expected to simplify compliance processes for affiliate marketers and boost the overall effectiveness of cashback campaigns. The impact of the ICO’s decision has removed uncertainty regarding the placement and use of these cookies as was commented on the APMA official blog last week. For affiliates, this ruling is particularly valuable, providing clarity around what is permissible under UK data protection law.
What Are Cashback Tracking Cookies?
Cashback tracking cookies are small pieces of data stored in a user’s browser that track the purchasing behaviour of an individual who signs up to receive cashback offers. These cookies play an essential role in the affiliate marketing ecosystem, helping to attribute sales or other conversions accurately. In return, customers receive a portion of their spending back.
In the affiliate industry these tracking cookies allow advertisers and affiliates to correctly track, measure, and reward transactions that meet specific criteria. Without cookies, advertisers would struggle to identify which affiliate partners contributed to a sale, and cashback sites would lose their ability to pass on the correct rewards to customers.
The Legal Landscape Before the ICO Ruling
Before the ICO’s decision, the use of tracking cookies, including those used by cashback sites, had been somewhat of a grey area. European Union and UK regulations had imposed strict requirements around the use of cookies, including obtaining user consent before placing them on a device.
The General Data Protection Regulation (GDPR) and the Privacy and Electronic Communications Regulations (PECR) require that organisations seeking to use cookies must obtain explicit consent from the user, except for those deemed “strictly necessary” for the operation of a website. Until now, it was not entirely clear whether cashback cookies fell into this category.
Marketers had to navigate complex consent-gathering processes, which not only added friction to the user experience but also introduced potential revenue losses. Affiliates operating in the cashback space were particularly affected, as these cookies are integral to their business model. Without clear guidance, the industry faced the risk of diminished conversion rates and more cumbersome compliance measures.
ICO’s Decision: Cashback Cookies Are ‘Strictly Necessary’
In a move that will streamline the operation of cashback sites and other affiliate businesses, the ICO has determined that cashback tracking cookies qualify as “strictly necessary” cookies. This means that websites using these cookies will no longer be required to obtain explicit consent from users before placing them on devices.
In a recent statement, the ICO noted: “The operation of a cashback site relies on the use of tracking technology, which is vital for delivering the service that the user expects. Therefore, these cookies should be treated as essential for the operation of the cashback platform.”
This ruling simplifies compliance for affiliate marketers, who can now place cashback cookies without worrying about complex opt-in processes that could deter users. The decision offers affiliates much-needed certainty in a regulatory environment that has often seemed convoluted and ambiguous.
Why This is Good News for Affiliates
The ICO’s decision is not just a win for cashback sites; it’s a game changer for the entire affiliate marketing industry.
Here’s why this is good news for affiliates:
1. Simplified Compliance
Previously, affiliates working with cashback platforms had to navigate complicated consent mechanisms to ensure compliance with data protection laws. By deeming these cookies “strictly necessary,” the ICO has removed this burden, allowing affiliates to focus on optimising their campaigns rather than worrying about legal complexities.
2.Improved User Experience
For users, consent banners asking for permission to place cookies can create friction. People are often deterred by pop-ups or confused by the technicalities of cookies. The ruling eliminates this hurdle, leading to a smoother user experience, particularly on mobile devices where even a slight disruption can result in the loss of a potential conversion.
3.Increased Conversions
Removing the requirement for consent means users can engage with cashback offers and affiliate deals without additional steps. For affiliates, this is a significant advantage, as fewer barriers will likely translate into higher conversion rates. When users don’t have to interact with cookie consent mechanisms, they are more likely to proceed with their purchase, leading to a boost in attributed sales for affiliates.
4.Enhanced Revenue Opportunities
As more users complete transactions through cashback sites without being discouraged by consent requests, affiliates stand to see an increase in commissions. Higher conversion rates and fewer drop-offs mean more sales attributed correctly to the affiliate, resulting in more commission revenue and potentially higher lifetime value for each user.
5.Competitive Edge
Affiliates working within the cashback vertical now have a competitive advantage. While other types of cookies still require explicit consent under GDPR and PECR regulations, cashback affiliates can operate with fewer restrictions. This gives them an edge in optimising campaigns and driving conversions at a faster pace, potentially attracting more advertisers and brands to partner with them.
What Happens Next?
The ICO’s ruling represents a pivotal moment in the affiliate marketing landscape, but it doesn’t end here. The industry will need to stay vigilant as data protection laws evolve and as other tracking technologies emerge. For now, though, cashback affiliates can breathe a sigh of relief.
While this decision currently applies to the UK, its effects could set a precedent for other markets, influencing future regulatory decisions across Europe and beyond. It will be interesting to see whether other countries follow suit and adopt similar stances, providing more consistency and clarity for global affiliates.
Conclusion
The ICO’s decision to define cashback tracking cookies as “strictly necessary” is a positive development for affiliate marketers, particularly those working within the cashback niche. By simplifying compliance and removing friction for users, this ruling opens the door for affiliates to increase their conversion rates, improve user experiences, and maximise their revenue potential. As always, affiliates should remain informed and agile, but for now, they can move forward with greater certainty and fewer compliance concerns, ushering in a new era of opportunity for the cashback sector.
