British direct marketers debate privacy and e-mail IF YOU’RE GOING to solicit and use e-mail addresses, you’d better do it right. In the United States, that generally means getting individuals to opt in to e-mail marketing programs. Permission marketing has been the order of the day, ever since the term was coined by Yahoo!’s Seth Godin.
But in Europe, marketers approach online data capture from a different perspective. Over the last 10 years, the DM industry has fought long and hard to get opt-out accepted as the standard. If a consumer does not want a communication – whether by phone, mail, fax or now e-mail – he or she should indicate that. With properly-run preference services to screen lists and a well-policed code of practice, this position appeared to have been accepted.
Until now. Just when it looked as if Europe’s legislators had finally seen the light, they began discussing the possibility of introducing a new law to require opt-in for e-mail addresses. “How many times can you fight the same battle?” was the weary response from Alastair Tempest, director general of the Federation of European Direct Marketing Associations (FEDMA).
It is a fair question. Opt-in has already been struck out of three key pieces of legislation, all of which were first drafted with a requirement for this approach. The data protection directive has now been adopted across Europe on the basis of opt-out. The privacy in telecommunications directive, which spent 10 long years going through the European mill, also has an opt-out measure, but all reference to e-mail has been removed. And the distance selling directive, which explicitly refers to both direct mail and e-mails, should have been adopted with the same opt-out provision
“It should have been on the U.K. statute books by July 7, but it has been held up because of worries in Government about e-mail,” reports Colin Lloyd, chief executive of the DMA (UK). Surprisingly, Internet service providers (ISPs) and the telephone industry regulator OFTEL have both pushed for opt-in to be reintroduced.
“They have argued that e-mail is the only medium where the recipient pays,” notes Lloyd. “They are concerned that once marketers get hold of e-mail, they will apply huge, complex graphics that will block their networks. And they say that 90 per cent of the complaints made to ISPs are about spam.”
The DMA (U.K.) – supported by the Confederation for British Industry – counters each of these points robustly. It notes that free local calls will soon be a reality in the U.K., removing the cost burden from consumers. ISPs should be increasing their bandwidth to cope with the growth of traffic in any case. “And if you are in the business of dealing directly with consumers, you will get complaints, as anybody in the home shopping industry knows,” he says.
Opt-out and the use of preference services have been adopted as the model across Europe and beyond. The DMA (UK) argues that e-mail should not be treated any differently. It also believes that requiring opt-in would unfairly discriminate against smaller companies. These often do not have substantial budgets for advertising to drive traffic to their own Web sites, and may be more dependent on commercially collected data as a result. Opt-in would limit the volume of e-mail addresses they could access.
But while the regulators and trade bodies argue the toss, direct marketers have to make decisions now about how to collect e-mail addresses. For companies and suppliers alike, the uncertainty is leading to confusion about how to proceed.
“It is a tricky question,” says Thom Kennon, managing director of WWAVRC Digital (the new media division of the U.K.’s biggest DM agency).
WWAVRC Digital recently conducted a viral marketing test on behalf of Tennants, one the U.K.’s leading brewers. The company’s Web site offered free entry into a prize draw in return for giving four friends’ e-mail addresses. The prizes were entry for all five people into secret club nights being organized by the brewery.
“We have been really excited about the response,” Kennan says. “We are getting up to 20 per cent response from those virally-acquired names.” At the stage where the friend is providing those four addresses, it is not possible for their owner to consent or not to being e-mailed.
“When that person gives out their friends’ e-mail addresses, they are shouldering the liability for opting in,” Kennan adds. “The e-mails we then send out to those friends say if you don’t want to receive this and your friend got it wrong, click here.” This leads the person to a Web site location where they can opt out.
Within the young target audience for this campaign, it is probably fair to assume that a circle of friends will be well aware of any sensitivities around receiving commercial e-mail. The trick is to make the reward attractive enough to overcome any resistance, and also to behave in a responsible manner once that data has been acquired.
Something of a shift is taking place within the on-line marketing community, however. The U.K. and eight other countries, have signed up with the U.S. DMA’s e-mail preference service. In Lloyd’s view, operating a suppression file of this sort deals with the concerns of those ISPs and others.
But some commercial organizations are taking a longer- term perspective. “Opt-in is not the law,” says Bruce Robertson, e-commerce marketing manager for Cornhill Insurance, a major U.K. insurance provider and also a high volume direct mailer.
“But if it does change in a couple of years and you have got hundreds of thousands of addresses collected under opt-out, then you have a problem.”
Robertson believes that “there is definitely more sensitivity among consumers about receiving e-mail. With direct mail, you can immediately identify it and, if you are not interested, make a decision to throw it away without opening it.” As a marketer, Robertson only wants to communicate with people who are interested in the product in any case. Opt-in e-mail makes this easier to achieve.
Cornhill executives are now debating the question of how to capture e-mail addresses. At the moment, it is unlikely that multiple options will be offered to customers and prospects. “If we want to send news and views about the company generally, it doesn’t matter what product they were interested in,” Robertson says. “Even if they were only interested in motor insurance, we all know that once they have a policy with you, they are more likely to purchase from you as long as you provide a good service.”
Gaining permission to market through e-mail by offering an opt-in is therefore the simplest solution. In the context of data collection by third parties, however, the type and complexity of those permissions is growing. In addition to an overall opt-in, consumers are being asked to specify what type of companies they would like to be e-mailed by, even if they do not know exactly which companies will be using their data in the future.
“Our feeling is that the standard requirement is that people should knowingly give their permission, rather than relying on opt-out,” says Ivan Southall, director of The E-mail Bureau. His company operates the MyOffers.co.uk site, which offers entry into prize drawing in return for e-mail addresses and other data. It also runs ok-mail.co.uk, which acts as the e-mail registration pop-up on other companies’ Web sites.
“When you get e-mail, you can’t do anything other than download it,” Southall says. “If all you then get are unwanted ads, you will get fed up and response rates will go through the floor. As a fledgling industry, we are trying to establish standards as early as possible that people trust.”
It is in the gap between the practice and the regulations that the European DM trade bodies might be falling out of step with their members. While FEDMA tries to fend off the threat of opt-in as a point of principle, its members are offering it as a marketing badge of honor. The danger is that the legislators will see that opt-in is routinely being offered and decide it should be formalized.
At the DMA (U.K.), Lloyd is concerned that online marketers might not have realized the dangerous precedent they could be setting. “Once you use opt-in in one medium, it could bring down the whole pack of cards,” he says. Direct marketers might be happy to offer opt-in on e-mail addresses now. But if they had to re-acquire all their direct mail addresses in the same way, that attitude would soon change.