Jim Conning of Royal Mail Data Services (RMDS) provides some practical advice for how to use customer data in promotions, based on new research

Accurate, comprehensive data on customers and prospects is the essential bedrock of successful promotional marketing campaigns. But as it becomes more vital to marketers, new challenges, such as ensuring compliance with the General Data Protection Regulation (GDPR), are growing in importance, according to a new study from Royal Mail Data Services.

Based on research with UK brands and marketing agencies, the survey highlights four trends:

GDPR compliance is marketers’ number one concern

Nearly three in 10 (29%) of respondents listed GDPR compliance as their biggest worry, up from just 12% in the 2016 study. Breaking this down, a quarter (25%) of brands saw GDPR compliance as their greatest challenge, rising to 35% among agencies.

The study drilled down to ask brands and agencies how confident they were that their internally held customer data was GDPR compliant. The positive news is that 78% of all marketers were either “very” or “reasonably” confident that it complied with the new regulation – although worryingly, 11% were not confident, including 2% who did not know if they were compliant or not.

The barriers to using marketing data effectively

Marketers are facing churn rates that see nearly one in five (19%) customers leaving every year. Consequently, finding and acquiring replacements remained the number-one objective for marketers, with 42% citing it as their biggest challenge. However, this has fallen from 52% in 2016. Interestingly “analysing customer data”, a new option for 2017, has emerged as the top concern for just under a quarter of respondents (24%). Clearly, boosting analytics capabilities is a fast-emerging priority for brands and agencies alike.

Companies also seem to be giving up on the idea of reactivating dormant customers, rather than searching for new ones. In 2014 nearly one-quarter (24%) said this was their number-one marketing priority, but by 2017 the figure had dropped to just 6%. This could be linked to worries about poor-quality customer data or whether dormant customer data is GDPR compliant and can be used in marketing to this group.

Turning data into successful campaigns

How can marketers effectively use the huge amount of data they now hold? What is holding them back?

When asked where the gaps were that need filling, the results mirrored overall marketing challenges. The same number of respondents (24%) pointed to analysing customer data as their biggest issue, a figure that rose to 28% within brands. This demonstrates a clear need for greater analytics skills and capabilities, particularly for brands.

Perhaps reflecting that they already had analytics skills, the biggest area for improvement that agencies flagged (29%) was access to better-quality customer data. Brands also struggle to embed data cultures within their businesses. More than one in five (21%) said that a having a better understanding across the organisation of the importance of good-quality customer data would improve business performance.

When it comes to driving successful campaigns in terms of response and conversion rates, marketers agree it is all about data and how you use it. On a scale of one to five, the four top success factors reported were quality of contact data (4.6), segmentation and targeting (4.6), personalised content (4.4) and timing (4.3). In comparison, creative design scored just 4.0 out of 5. These top-four factors all rely on good-quality data and analytics in some way, and marketers reported that they had all increased in importance dramatically since last year.

Ensuring better data quality

Poor-quality customer data was cited as their biggest challenge by nearly one in five (18%) marketers. The main drivers of poor-quality data were basic errors – specifically out-of-date information and incomplete data. This was above factors such as duplicate data, spelling mistakes and data in incorrect fields.

Marketers understand that data is a living entity and quickly becomes out of date. This is leading to them focus on more formal, regular data cleansing – 22% do this daily or continuously. However, one-third (33%) still have no formal processes in place to clean customer contact data, although this has dropped from 37% in 2016. This means a sizeable minority are putting themselves at risk of data-quality issues – and potential GDPR investigations over non-compliance.

Poor-quality data hits business performance – marketers estimate that the average cost of poor-quality customer data is 6% of annual revenue. For major brands this is measured in millions of pounds – and excludes any potential fines for GDPR non-compliance, which can be as much as 4% of global turnover.

Data is the lifeblood of promotional marketing campaigns – having the best ideas in the world mean nothing if you can’t reach the right customers and prospects. However, as the Royal Mail Data Services research has found, marketers face key challenges around GDPR compliance, analytics, and quality that they need to overcome if they are to deliver successful campaigns that boost the bottom line.

A full copy of the report, “The use and management of customer data”, can be downloaded from the Royal Mail Data Services website.

Jim Conning is Managing Director of Royal Mail Data Services (RMDS), which is the specialist data business of Royal Mail Group. It provides organisations with customer contact and address data, data-quality, addressing and marketing services. It is committed to developing new ways for customers to look up, capture, validate and use contact and address data more effectively. Royal Mail Data Services helps organisations improve customer data quality, marketing performance and customer engagement.

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Regulations governing how social media influencers advertise products online are confusing and unclear, with the UK public overwhelmingly believing the system should be more transparent, new research reveals.

The comprehensive survey into influencer marketing was carried out on behalf of Prizeology, a prize promotions agency specialising in promotional regulation and compliance. The survey looked at how the public perceive rules and regulations around influencer marketing.

The research, carried out on 2,015 members of the general public, looked at influencer marketing on social media platforms covering Instagram, Facebook, Twitter, YouTube and Pinterest. It overwhelmingly revealed a worrying lack of knowledge around the rules governing advertising by influencers.

A huge majority – 71% of people – wrongly believe that there are no regulations surrounding influencer marketing. Nearly two-thirds (61%) believe that influencers do not have to state that they have been paid to talk about a product – which is incorrect, because under consumer protection legislation, influencers must state if they are being paid to promote a brand’s products. The CAP Code, the code of conduct which is part of the UK’s self-regulatory system covering advertising and marketing in the UK, reflects and reinforces the legal position, and a number of complaints against brands have been upheld by industry regulator the Advertising Standards Authority for insufficient clarity in publicising commercial relationships with bloggers, vloggers and other social media influencers.

Half (49%) of the UK public were unaware of the relevant language or tags like #ad which are supposed to appear on paid-for posts to show that paid-for product promotion is involved; 33% of these were young people aged between 18-24, which suggests consumer confusion is not restricted to the older age brackets.

The research also clearly showed that the general public believes that they should be informed if people are being paid to promote products: 88% of the survey sample agreed with this statement, with 60% agreeing that their perception of a brand is improved when they are transparent about product promotion.

Sarah Burns, Managing Director of Prizeology and an expert on compliance and regulation in the promotional marketing sector, says: “The results are extremely interesting and overwhelmingly show a shocking lack of knowledge and confusion amongst all age groups – including teenagers – about the way that brands use social media influencers to advertise their products.”

Well over two-thirds (71%) of those questioned felt that more should be done to force disclosure.

Brands are also in danger of having their reputations damaged by lack of transparency, with 44% of those surveyed saying they felt that influencer marketing is damaging and 66% of people agreeing that their perception of a brand improved when they were transparent about product placement. Burns comments: “This should be a wake-up call to brands to make sure that they are acting within the rules when working with influencers. The public do not want to be duped and brands could suffer as a result.”

She concludes: “It is clear that this is an area of promotion that is growing rapidly, and the regulations need to be enforced more rigorously to keep pace with its growth. Now is the time to take action. I know the Advertising Standards Authority has committed to comprehensive education and enforcement this year, and our research shows that this would be welcomed by consumers.”

The survey of 2,015 people, representative of the UK by age, gender and region, was conducted by Vitreous World Ltd for Prizeology between January 30th and February 2^nd 2018. A white paper and full breakdown of the survey and results can be downloaded from the Prizeology website.

Prizeology is a prize promotions agency working with brands to engage customers. It specialises in compliance and best practice and helps brands and businesses run prize promotions which stick to the rules and regulations.

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Laura Kelly of the IPM’s Legal Advisory Service highlights some changes to the rules on putting prices in marketing communications

The Chartered Trading Standards Institute recently released the new Guidance for Traders on Pricing Practices. It replaces the 2010 BIS Pricing Practices Guide, long used by both advertisers and regulators to help establish best practice in line with consumer protection laws. But exactly how might this change impact promotional marketing?

The first point to note is that the consumer protection laws have not changed; the guidance has been updated but the principles behind it remain the same, so it’s unlikely you will need to significantly change your current practices.  Remember the guidance is not legally mandatory but will be considered by regulators where appropriate.

The guidance provides common sense advice with practical examples, and the new document is arguably more user friendly. It breaks scenarios down into practices that are less likely or more likely to comply, rather than giving definitive rules or timespans. There are two key changes that most commenters have picked up on that are relevant to our field.

One of these is that the so called “28-day rule” has been removed. The BIS PPG stated that a period of 28 consecutive days within the previous 6 months would be deemed reasonable in terms of the least amount of time a product would need to be sold at a higher price before it could be reduced and genuinely claimed to be discounted. Some have suggested this was used to artificially inflate prices; the ASA had notably already moved away from this position in recent years, focusing on overall pricing history rather than specific figures. It is therefore best to see this as a clarification of current principles rather than a change in position.

Some commentators have noted the focus on reference pricing and advised wariness when using RRPs. The new guidance contains a link to CAP guidance on the subject, which notes that even if the RRP has been given to you by the manufacturer, if you can’t demonstrate that it is actually sold at that price it’s likely to be considered misleading. Again, while some may be surprised to discover this information it has been a long-held principle.

So, if you’re already following best practice you shouldn’t need to make any changes. If any of the above is news to you however, now’s the time to brush up!

The ASA will continue using precedent to make rulings, but it’s worth keeping an eye on future cases to see whether they change direction at all. I’ll mention any significant rulings in my Legal Scoop which you can subscribe to on the IPM website, and of course they’re likely to come up as case studies in future IPM Legal Briefings.

If you’re an IPM member and have any questions you can contact Laura at laurak@theipm.org.uk

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Laura Kelly, Legal & Regulatory Advisor at the IPM, explains why changes to the CAP Code, the rules governing advertising and marketing in the UK, had to happen and the opportunities they offer to the promotions industry

The advertising and marketing industry is famed for many things; bringing to life brands, creating a huge economic impact, making us laugh or cry, making brands memorable. Marketing communications work – what we do has the power to influence people.

With great power, as always, comes great responsibility, a fact which the UK’s marketers have long realised. That’s why we have the CAP Code and the ASA to uphold it at the heart of a self-regulatory system which is recognised internationally as world class.

Our industry is constantly changing – take the way, over the past 20 years, that digital technology has completely revolutionised the way brands talk to consumers and made marketing, in some ways, far more powerful. Society changes as well – few of us do as much hard manual work as our grandparents did or get as much exercise.

As a result, our waistlines are expanding – and the particular worry is how our children are being affected. Obesity levels amongst the young are increasing.

Increased concern about obesity has led to a focus on advertising and marketing of calorie-rich food and drink, and there has been a keen interest in how we promote certain HFSS (High, Fat, Salt and Sugar) brands to children and families. We have seen accusations levelled at the marketing industry that what we do is making us fat and damaging our health.

Late in 2015, the Government launched its soft drinks taxation promise to help address the growing concern about obesity, centered on the high sugar intake of children. The Government promised the UK public that it would tackle the brands responsible.

Several months and many consultations later, the efforts of CAP, the Advertising Association and many other interested parties (including the IPM) have managed to prove that advertising does not in fact contribute in any significant way to the increase in obesity levels in children – other factors such as parental influence and the switch from physical activity to playing computer games bear far more responsibility.

However, the advertising and marketing industry recognises that there is much more it can do to help. To begin with, the industry decided to tackle at source the rules that govern the work we do.

The IPM, as part of the self-regulatory framework that governs UK broadcast and non-broadcast rules, was a key member of the consultation groups to examine the areas of critical understanding in children when looking at the effects of advertising and marketing messaging.

The outcome of this work has seen a CAP Code change that signals a huge change in the way brands can promote to under 16s and under 12s.

As a reminder:

• Ads that directly or indirectly promote an HFSS product cannot appear in children’s media;
• Ads for HFSS products cannot appear in other media where children make up over 25% of the audience;
• Ads for HFSS products will not be allowed to use promotions, licensed characters and celebrities popular with children. Advertisers may, however, now use those techniques to better promote healthier options;
• The Department of Health nutrient profiling model will be used to classify which products are HFSS.

Creating a future for responsible promotion

At the IPM, over the past two years we have seen a shift towards more responsible promotion across the board, particularly FMCG brands. Being involved in this consultation has shown that the entire industry embraces this forward thinking approach and we are delighted to support the changes at the IPM.

These changes also bring opportunity. Restrictions on using promotions, licenced characters and celebrities in food ads directed at children have been loosened. They will now be permitted in ads for all non HFSS foods, giving marketers powerful new techniques to better promote healthier options.

With such a positive change happening across the industry, we can truly say we are part of the solution and not the problem. For a time, we were at real risk of losing our right to self-regulate and the IPM supports the new rules every step of the way.

The IPM will actively promote the rule changes from now on, so that brand owners are ready and able to implement media and promotional changes in advance of the new rules coming into effect.

Laura Kelly is Legal & Regulatory Advisor at the Institute of Promotional Marketing (IPM), advising marketers at client companies, agencies and suppliers on how to ensure that their promotional marketing activities are legal and that they conform to the CAP Code, the rules which marketing and advertising in the UK must follow under the country’s self regulatory system.

The IPM is holding a special webinar on Wednedsay 15th December in partnership with the Committee of Advertising Practice (CAP) to explain the changes to the CAP Code on HFSS food and drink marketing. Places are free and you can book your place here.

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Following a full public consultation, the Committee of Advertising Practice – CAP – has today announced tough new rules banning the advertising of high fat, salt or sugar (HFSS) food or soft drink products in children’s media.

The rules will apply across all non-broadcast media including print, cinema, online and in social media, and CAP has stressed that they will also apply to ‘TV-like content’ online, such as on video-sharing platforms or advergames, if they are directed at or likely to appeal particularly to children.

One key benefit for the promotions industry is a clarification of the rules on marketing communications using promotional techniques, characters or celebrities to promote healthier options to children aged 11 and under.

Changes to the rules will mean advertisers will be able to use promotions, licensed characters and celebrities in ads for non HFSS foods, allowing more creative ways for the industry to promote healthier food options to children and their families.

The new rules, which will apply in media targeted at under-16s, will come into effect on 1 July 2017.

In summary:

• Ads that directly or indirectly promote an HFSS product cannot appear in children’s media
• Ads for HFSS products cannot appear in other media where children make up over 25% of the audience
• Ads for HFSS products will not be allowed to use promotions, licensed characters and celebrities popular with children; advertisers may now use those techniques to better promote healthier options
• The Department of Health nutrient profiling model will be used to classify which products are HFSS

This significant change is designed to help protect the health and wellbeing of children.

Bringing the non-broadcast advertising rules in line with the TV rules, the new restrictions will lead to a major reduction in the number of ads for HFSS food and drinks seen by children. And it will also mean ads for HFSS products will no longer be allowed to appear around TV-like content online, such as on video-sharing platforms or advergames, if they are directed at or likely to appeal particularly to children.

CAP’s review and the new rules come in response to wider concerns in society about childhood obesity and the public health challenges it poses. The new rules also respond to shifting media habits amongst young people and evolving advertising techniques which have fundamentally changed children’s relationship with media and advertising. Research from Ofcom shows that young people aged 5-15 are spending around 15 hours each week online – overtaking time spent watching a TV set for the first time.

There are many factors that have an impact on childhood obesity, and available evidence shows that the effect of advertising on children’s food preferences is relatively small, particularly when compared to other factors like parental influences; however, CAP believes that even a very small positive impact from these new ad restrictions could play a meaningful role in reducing potential harm to children.

Chairman of CAP, James Best said: “Childhood obesity is a serious and complex issue and one that we’re determined to play our part in tackling. These restrictions will significantly reduce the number of ads for high, fat, salt or sugar products seen by children. Our tough new rules are a clear demonstration that the ad industry is willing and ready to act on its responsibilities and puts the protection of children at the heart of its work.”

The IPM’s Managing Director Carey Trevill says: “With significant changes to the CAP Code, the IPM will be part of the story that changes the way advertising and marketing communications affect children today and tomorrow. We have an important part to play in the way our consumers view marketing communcations. Helping the wider community understand the steps we have taken as an industry can only lead to improved campaigns.”

Questions on what the changes mean for your campaigns? The IPM are running a webinar with their Legal Advisor, Laura Kelly and with CAP on December 15^th. Places are free and you can book yours here.

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The Institute of Promotional Marketing (IPM) has welcomed plans from the Committee of Advertising Practice (CAP) to tighten up the rules surrounding the advertising and marketing of High Fat Salt Sugar (HFSS) foods, particularly to children, and is encouraging the promotional marketing industry to contribute to CAP’s public consultation on the issue.

The IPM, which is a stakeholder in CAP, points out that there is growing pressure on the marketing industry to make effective changes in the way it promotes to children and families.

The IPM’s Managing Director, Carey Trevill, comments: “The IPM welcomes the suggested amendments to the CAP Code, in particular the additional clarity provided in the proposed revisions around HFSS (High Fat Salt and Sugar) foods and young audiences.”

Trevill adds that “this is a sensitive but important issue, and the suggested changes to the Code represents a recognition that the advertising and marketing industries can be part of the solution when it comes to getting the message out and addressing the country’s concerns around childhood, and adult, obesity.”

In passing, Trevill also highlighted the fact that the proposals include changing references in the CAP Code to use the term ‘promotional marketing’ instead of the term ‘sales promotion’. Trevill says: “We also welcome the revision to the code in amending language from sales promotion to promotional marketing. This dynamic industry has long been conducting campaigns with activations well beyond sales promotion outputs, and it is wonderful for this variety of work to be recognised in the Code.”

CAP is the body which writes the CAP Code, the rules governing advertising and marketing in the UK under the UK’s self-regulatory system. CAP has just opened a public consultation on its proposals, which include:

• Introducing a new rule to the UK Code of Non-broadcast Advertising, Direct and Promotional Marketing (the CAP Code) to limit where advertising for food and soft drink products high in fat, salt or sugar (HFSS products) can be placed in all non-broadcast media, including traditional and online media;
• Banning HFSS product advertising in media targeted at, or of particular appeal to, children and whether that should apply to under 12s or under 16s;
• Appling the existing rules which prohibit the use of promotions and licensed characters and celebrities popular with children in food and drink advertising to advertising for HFSS products only, allowing more creative ways for healthier foods to be advertised to children.

The proposals to change the CAP Code follow on from research by ISBA (the Incorporated Society of British Advertisers, the body representing client companies into advertising and its effect on obesity, particularly in children. This found that available evidence shows that advertising has a modest effect on children’s food preferences, but other factors like parental influence, opportunities for physical exercise and education play greater roles in the causes of, and solutions to, childhood obesity.

The marketing industry has pledged to take the lead to prove that advertising and marketing are not the ‘villains’ in the issue. CAP argues that even a relatively small positive impact from new advertising restrictions could make a meaningful contribution to tackling this important health issue.

CAP’s public consultation closes at 5.00pm on July 22nd 2016. The full consultation document can be read here.

James Best, Chairman of CAP, says: “Too many children in the UK are growing up overweight or even obese, potentially damaging their health in later life and imposing a high cost on society. Advertising is just one small factor in a very complex equation but we believe we can play a positive part in addressing an urgent societal challenge. In proposing new rules, our aim is to strike the right balance between protecting children and enabling businesses to continue advertising their products responsibly.”

The IPM will be holding a webinar in the coming weeks to examine the changes and what these mean in practical terms for brands and agencies. A representative from CAP will be on hand during the webinar to answer your questions. Anyone interested in registering their interest for this webinar should visit the IPM website.

The IPM have further suggested that anyone wanting to understand more about the proposed changes and how they can comment, or to gain a better understanding of what the proposals may mean for their brands, can contact the IPM’s experts on contact@theipm.org.uk, or call 020 7291 7730.

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