1. Communication and permission in the market space (law, ethics, and privacy) eMail marketing MARK 430 Week 6

2. Source: eMarketing eXcellence. 2008. Chaffey et al. BH Overview: Establishing trust and confidence in the online world – Privacy Gaining trust through “permission marketing” The relationship marketing model eMail marketing and the new Canadian anti- spam legislation

3. How concerned are people about online privacy? Survey of Canadians on Privacy-Related Issues (Stats Can 2013) – scroll down for graphs Survey of Canadians on Privacy-Related Issues – 66% are very concerned about privacy – Top privacy concerns relate to finances, online security and identity theft – Growing sense that protection of personal information is diminishing – Most not confident about knowledge of privacy implications of new technologies – Growing sense of increased importance of protecting privacy in future – Canadians reluctant to share personal information with organizations

4. 2013 survey data re privacy from Pew Anonymity, Privacy, and Security Online – Pew Internet (September 2013) Anonymity, Privacy, and Security Online Security concerns continue to rise 86% of internet users have taken steps online to remove or mask their digital footprints 55% of internet users have taken steps to avoid observation by specific people, organizations, or the government.

5. Other current concerns about privacy There is a big tension between what marketers want to know about people, and how comfortable people are in providing that data Marketers need to find the right balance Some examples – Canadian Privacy Commission video on social networking Canadian Privacy Commission video on social networking – What Facebook is for (#funny) What Facebook is for – The evolution of Facebook Privacy (2005 – 2010) The evolution of Facebook Privacy – Facebook privacy – 6 years of controversy Facebook privacy – 6 years of controversy – Google Street View Google Street View

6. What is the current legal framework in Canada with respect to online privacy?

7. Legal Protection of Internet Privacy A major concern of Internet users is that their personal data is used only for the purpose it was provided Legislation in Canada – PIPEDA (Personal Information Protection and Electronic Documents Act) PIPEDA (Personal Information Protection and Electronic Documents Act) – All businesses and other organizations had to comply by Jan 1, 2004 Note this is federal legislation – there is also provincial-level privacy legislation

8. Privacy requirements Information about an identifiable individual – Name, address, gender, age, ID numbers – Sensitive information (religion, union affiliations, sexual orientation, medical records etc) Identify purpose for which info is being collected Knowledge and consent of individual is required Use only for the purpose for which it was collected Keep it secure Make public your policies and practices about how private information is deal with

9. Privacy Policies Organizations carry out this legal requirement by providing information in privacy policies Policy must address information collected automatically from log files and cookies, as well as personal information actively provided by the user – Example: FutureShopFutureShop – Example: Microsoft CanadaMicrosoft Canada Trust can also be increased by the use of “trustmarks” from 3 rd party providers such as TrusteTruste

10. Privacy and cookies Cookies are a boon to marketers – just a few of the uses (video explanation from Google):video explanation from Google – Personalization – Advertising and ad networks – Shopping carts – Recognizing returning visitors – Tracking click-through from advertising to purchase They also offer big advantages to web site users However – they are also the cause of many privacy concerns

11. Types of cookies There are several types of cookie – Persistent cookies – Single session cookies – First-party cookies – Third-party cookies – these are the ones that cause concern No one-to-one correspondence between computer (cookie) and user Issue for marketers – In Canada we must disclose how cookies are used in Privacy Policy – EU policy now requires web sites to get users permission to capture data using cookiesget users permission to capture data using cookies – Creeping out the customers by “going too far” Behavioural re-targeting (based on previous actions, not demographics) is being called “stalking”

12. New legal framework for Canada “In order to build consumer trust and confidence in conducting e-business in Canada the Government of Canada is committed to establishing clear rules to protect the privacy of personal information in the new 'virtual' marketplace. This is being done through the implementation of Federal privacy legislation, and implementation of the new anti-spam legislation.”implementation of the new anti-spam legislation Industry Canada Summary of the new anti-spam legislation (CASL) Summary of the new anti-spam legislation – Very strict consent framework is one of the most notable points – Applied to all “electronic communication” not just email – Best practices in marketing is now the law – We will look at the requirements in more detail when we look at email marketing

13. We can also build trust and confidence by using “permission marketing” techniques

14. Permission marketing Term coined by Seth Godin (1999) Underpins the notion of relationship marketing The antithesis of “interruption marketing” and the answer to the problem of clutter – Permission marketing is….. anticipated, relevant and personal Often begins with some sort of incentive that customers “opt-in” (remember that opt-in is now required by law)

15. Permission as a basic principle on the web Don’t ask for personal information too early in a process Don’t ask for it until it is needed Remember, once you have customer information, all contact should be “anticipated, relevant, and personal” (and used only for the purpose(s) that they explicitly gave consent for)

16. Framework of relationship marketing Aim is to build long-term relationship with individual customer – built on loyalty – one to one marketing Measured by Return on Marketing Investment (ROMI) and Customer Lifetime Value (CLTV) metric rather than simply sales transactions Rationale is that customer acquisition costs much more than customer maintenance Strategy built using “sense and respond” communications – Both timely and relevant to the customer – based on previous interactions with the company – Amazon.com and “sense and respond” Amazon.com and “sense and respond” Loyalty happens only with “permission” and by instilling trust

17. EMAIL MARKETING

18. eMail usage by organizations Inbound – part of CRM – Firms need clear policies for provision of email addresses to customers – Clear processes for ensuring that inbound email is dealt with fully and promptly – eMail is a key part of customer service Outbound – part of IMC – Many advantages as a direct marketing medium – Increasingly problematic for marketers to manage Source: eMarketing eXcellence. 2012. Smith &Chaffey

19. Direct marketing using eMail - Advantages – Push medium – it appears in customer’s email inbox – Good for retaining customers and maintaining relationships – Direct response - deep link to website landing page (url need not be memorized or copied) – Easy to quantify effectiveness – Cheaper to send than print – Lower creative costs than print – Fast execution time – Fast response time Source: eMarketing eXcellence. 2012. Smith &Chaffey

20. Disadvantages of eMail – Bad reputation – SPAM (90%+) – Deliverability – eMail filters (both personal and mailbox provider) – Very poor for acquiring new customers (requires opt-in for success) – Must compete with lots of clutter in in-box – Bad list data - multiple eMail addresses and churn Source: eMarketing eXcellence. 2012. Smith &Chaffey

21. eMail metrics – methods of measuring effectiveness Delivery rate / bounce rate Open rate – for html messages only – How do we know whether the email has been opened? – Problems? Preview pane Image blocking Click rate Source: eMarketing eXcellence. 2012. Smith &Chaffey

22. SPAM Traditional definition of SPAM – Unsolicited commercial email sent in bulk(UCE) New Canadian Anti-Spam legislation (CASL) broadens the definition to: – Spamming: “the sending of unsolicited commercial electronic messages (“CEMs”) whether in the form of e-mail, text messages, social media or other means of telecommunication” – Email does not have to be sent in bulk to fall under this legislation

23. How much SPAM is there? Marketers have abused and misused email The Spamhaus Project estimates that 90% of incoming email traffic is spam in North America, Europe or Australasia. By June 2008 96.5% of e-mail received by businesses was spam (at VIU it is around 98%).Spamhaus Project

24. Why does SPAM continue? Cost to sender is minimal Very low response rate required to make SPAM profitable. Spammers are turning a profit despite only getting one response for every 12.5m e-mails they send. Spammers are turning a profit despite only getting one response for every 12.5m e-mails they send. Nature of the worldwide global network enables SPAM Spamhaus project (spamhaus.org) Spamhaus project Legal penalties difficult to enforce – US law – the “Can Spam” Act – came into force on Jan 1, 2004 Requirements for commercial emailers – Canada has just introduced comprehensive anti-spam legislation (CASL)

25. So what does the law say? CASL (Canada’s Anti-Spam Legislation) – Passed December 2010 (after many years in development) – Sections covering “commercial electronic messages” came into force July 1, 2014 – January 15, 2015, sections of the Act related to the unsolicited installation of computer programs or software come into force. This is very comprehensive and stringent legislation Penalties: up to $1,000,000 per violation for individuals and up to $10,000,000 for corporations Private rights of action after 1 July 2017 – ie. recipients can sue http://fightspam.gc.ca/eic/site/030.nsf/eng/h_00039.html

26. CASL generally prohibits: sending of commercial electronic messages without the recipient's consent (permission), including messages to email addresses and social networking accounts, and text messages sent to a cell phone; alteration of transmission data in an electronic message which results in the message being delivered to a different destination without express consent; installation of computer programs without the express consent of the owner of the computer system or its agent, such as an authorized employee; use of false or misleading representations online in the promotion of products or services; collection of electronic addresses by the use of computer programs or the use of such addresses, without permission (address harvesting). http://fightspam.gc.ca/eic/site/030.nsf/eng/h_00039.html

27. What is a “commercial electronic message”? A commercial electronic message (CEM) is defined as – a digital message sent to any electronic address (i.e. email address, social media account, text message) – that promotes or advertises a product, person, event, investment, or business. So if there is any commercial activity tied to the message it would be considered a CEM under CASL. This applies to individual messages as well as bulk messages (very different from typical anti-spam legislation)

28. What’s an electronic address? “A typical advertisement placed on a website or blog post would not be captured.” “Whether communication using social media fits the definition of "electronic address," must be determined on a case-by-case basis, depending upon, for example, how the specific social media platform in question functions and is used.“ – “For example, a Facebook wall post would not be captured.” – “However, messages sent to other users using a social media messaging system (e.g., Facebook messaging and LinkedIn messaging), would qualify as sending messages to "electronic addresses." – “Websites, blogs and micro-blogging would typically not be considered to be electronic addresses." http://www.mondaq.com/canada/x/319300/Social+Media/Canadas+AntiSpam+Law+And+Social+Media+Marketers+Advised+To+Proceed+With+Caution

29. Consent is really important You can legally send CEMs only with the full CONSENT of the recipient – Express consent: Direct, positive opt-in (absolutely no pre-checked boxes) - remains in force until the customer opts out – Implied consent – exists where there is a previous business relationship – BUT expires after 2 years – then Express consent is needed to continue sending messages 3 things to think about when sending electronic messages (Infographic from Gov’t of Canada) 3 things to think about when sending electronic messages

30. How ethical marketers manage in the SPAM era Permission marketing (opt-in versus opt-out direct marketing) – applies particularly to email marketing 1.Ask people what they are interested in 2.Ask permission to send them information 3.Then do it in an entertaining, educational, or interesting manner Source: eMarketing eXcellence. 2012. Smith &Chaffey

31. eMail marketing challenges Even with permission marketing and opt-in, there are considerable challenges in: – Getting email addresses (NEVER buy a list from a third-party firm) – Getting your email to the recipient (spam filters etc) – Getting them to open it when they get it Source: eMarketing eXcellence. 2012. Smith &Chaffey

32. Some tactics to help get your email delivered and opened Comply with the law – Use “affirmative consent” – ideally use the double opt-in subscription process – No pre-checked boxes – Include physical address, link to privacy policy Include a visible “ update email preferences” link (and make sure it is compliant with CASL!) “ update email preferences” Make sure the email is expected A recognized, consistent sender name “Branded” subject lines and subject line content Consistency between subject line and content Based on DMA “eMail Delivery Best Practices”

33. Some tactics to help get your email delivered and opened (cont’d) Be aware of how content (spam) filtering works Message proofing and pre-testing Think about images instead of text (downside!) Manage user expectations Select appropriate send time DMA Chart showing what to look for in a commercial eMail (use this for your project to make sure that your sample emails comply) DMA Chart showing what to look for in a commercial eMail Based on DMA “eMail Delivery Best Practices”

34. eMail marketing success factors: CRITICAL Creative – design, colours, images etc Relevance – does it meet my needs? Incentive (or offer) – Benefit? What’s in it for me? Targeting and timing – is it tailored just for me and my interests. Does it arrive at a useful time? Related to any other event? Integration (with other campaigns) – does it fit? Consistent brand and message? Copy – structure style and explanation of the offer, including location of hyperlinks Attributes (of the email) – subject line, text or html? Landing page (or microsite) – appropriate, engaging? Source: eMarketing eXcellence. 2012. Smith &Chaffey

35. Software for managing eMail – a couple of examples Mailchimp – offers software to help create, track, and analyze email for businesses and organizations Mailchimp Salesforce.com – part of their CRM software suite Salesforce.com