Consumer Preferences: Opt-Ins Now Required
Posted on Thu, Feb 02, 2012 @ 01:35 PM
By: Melissa J. Fitzgerald, CIPP
As Facebook files for an unprecedented IPO of $5 billion this week, the marketing industry is reminded of the enormous value of relevant marketing data. FB’s prospectus states its valuation at close to $100 billion because they “allow advertisers to select relevant and appropriate audiences for their ads.” Put simply, consumers respond better to marketing that interests them. Consumers don’t mind advertisements and pushy sales tactics when it is regarding something that they want to buy; hence, marketers are willing to pay big bucks for targeted data. Businesses spend billions of dollars each year paying for this type of demographic marketing data—lists of consumers that may be interested in purchasing their goods or services. But this data may or may not be worth the price tag because it is often based on conjecture calculated in the aggregate. Marketers pay an exorbitant fee for marketing data, blast out marketing campaigns, and see a small percent of return on a massive number of contact points. The old adage “throw it against the wall and see what sticks” comes to mind.
More and more marketers are realizing that the consumer’s voice is a fool-proof way to market to an individual consumer. Engaging a one-to-one relationship with the consumer gives the consumer the opportunity to communicate what they want to be solicited about and when. Eliminating the guesswork involved with analyzing aggregated data, consumer preference management not only ensures a higher rate of return on a single campaign but it creates more brand loyalty. Consumers given the chance to communicate their preferences, likes/dislikes, favorable contact point, and frequency of marketing are happier customers.
Last week the European Commission proposed a new data protection framework to replace the 17 year old EU’s Data Protection Directive. While much of the proposed rules deal with the common data protection tenants—breach notification, children online protection, and consumer control over personal identifiable information—the potential impact on the marketing industry is widespread. The potential new EU rules far exceed anything imposed by any other jurisdiction today. Most notably, the new rules require that wherever consent is required for data to be processed, consent must be given explicitly rather than assumed. In essence, this will create an explicit consent (opt-in) requirement for all EU marketing. It is important to note that the EU rules will apply to personal data handled abroad by companies in the EU market or offer services to EU citizens. In other words even if your business is physically located in North America, if you offer your services/products to EU citizens through a website, the new EU Data Protection rules would apply to your business. Similarly, Canada enacted the Canadian Anti-Spam Law (CASL) in late 2010 that requires opt-ins (implicit is permissible) for all commercial electronic messages. Canada’s “opt-in” proposed regulations have yet to be finalized but it is expected that the consent requirements will come into effect sometime in 2012.
Marketers that are already creating a dialogue with consumers and soliciting consumer preferences are well ahead of the curve. Not only will they have a higher rate of return on their outbound marketing efforts and create brand loyalty among their customers, they will be prepared for compliance with the soon to be effective Canadian Anti-Spam Law, and the sweeping EU rules that will likely come into effect in 2 years.
