The end of email marketing as we know it

I was recently asked to advise a client in relation to unsolicited, bulk email marketing campaigns and the brief got me thinking about these sort of marketing campaigns and how the law could well put an end to them as we currently know them.

Virtually anyone with an email account is familiar with unsolicited email, usually by the term spam. So what is spam? ISPA defines spam as follows:

Spam, or unsolicited bulk email, is the posting of emails to large volumes of addresses advertising a service or product which the recipient seldom wants. Unlike conventional junk mail where the sender pays the cost of postage, recipients of spam pay the transmission costs, either in the form of Internet access fees and/or telephone call charges.

An example of spam is an unsolicited email message from someone you dont know (or a forged address) inviting you to view pornography, purchase Viagra or enlarge your penis amongst other things.

So why is spam a problem (aside for the annoyance factor)? Well, as ISPA points out:

Spam is one of the most significant threats to the Internet, accounting for around 60% of all email traffic. Spam costs consumers and ISPs lots of money in bandwidth charges. Despite the growing number of technological means for combating spam, the spammers somehow manage to stay one step ahead and the deluge shows little sign of abating.

There isn’t a lot of law dealing with spam at the moment. The Electronic Communications and Transactions Act deals with spam in section 45:

Unsolicited goods, services or communications

45.(1) Any person who sends unsolicited commercial communications to consumers, must provide the consumer

(a) with the option to cancel his or her subscription to the mailing list of that person; and

(b) with the identifying particulars of the source from which that person obtained the consumer’spersonal information, on request of the consumer.

(2) No agreement is concluded where a consumer has failed to respond to an unsolicited communication.

(3) Any person who fails to comply with or contravenes subsection (1) is guilty of an offence and liable, on conviction, to the penalties prescribed in section 89(1).

(4) Any person who sends unsolicited commercial communications to a person who has advised the sender that such communications are unwelcome, is guilty of an offence and liable, on conviction, to the penalties prescribed in section 89(1).

(If you are interested in exploring section 45 in more detail, Lance Michalson published an article in 2003 on the topic which makes for very interesting reading)

It sets a set of minimum requirements for unsolicited email to be regarded as lawful but not all service providers are satisfied with this. Internet Solutions specifically prohibits unsolicited email in its Acceptable Use Policy:

E-MAIL USE

1. It is explicitly prohibited to send unsolicited bulk mail messages (“junk mail” or “spam”) of any kind (commercial advertising, political tracts, announcements, etc). This is strongly objected to by most Internet users and the repercussions against the offending party and IS can often result in disruption of service to other users connected to IS. In addition, spam is unlawful in terms of the Electronic Communications and Transaction Act 2002, and IS is entitled to take appropriate steps against the User in contravention of these provisions of the Act.

At this point sending spam becomes more a case of infringements of the service providers’ terms or acceptable use policies and a matter of contract. It is one of the legal frameworks service providers are creating in the absence of more comprehensive (and, arguably, effective) legislation.

The central issue here is sending unsolicited email to people who may not even be aware of the sender’s existence. Sometimes email databases are compiled in the course of legitimate business activities (training companies often collect attendees’ personal information and add them to their databases, although not always with the attendees’ consent). Marketers frequently buy databases of email addresses from 3rd parties who compile these databases independently. This is where a fair amount of attention is focused because many of these database compilers use underhand methods to create these databases. As far as the ECT Act is concerned, a properly functioning opt-out mechanism keeps the marketing campaign pretty much above board but the much anticipated Protection of Personal Information Bill could change that dramatically.

The PPI Bill has, as one of its central principles, the requirement that informed consent be given for the collection and processing of personal information. This means that a provider must ensure that the people it collects personal information from are informed as to what personal information is being collected and what that personal information is going to be used for. Furthermore they must consent to this. Section 66 of the PPI Bill applies this principle of informed consent to unsolicited electronic communications:

Unsolicited electronic communications

66. (1) The processing of personal information of a data subject for the purpose of direct marketing by means of automatic calling machines, facsimile machines, SMSs or electronic mail is prohibited unless the data subject—

(a) has given his, her or its consent to the processing; or

(b) is, subject to subsection (2), a customer of the responsible party.

(2) A responsible party may only process the personal information of a data subject who is a customer of the responsible party in terms of subsection (1)(b)—

(a) if the responsible party has obtained the contact details of the data subject in the context of the sale of a product or service;

(b) for the purpose of direct marketing of the responsible party’s own similar products or services; and

(c) if the data subject has been given a reasonable opportunity to object, free of charge and in a manner free of unnecessary formality, to such use of his, her or its electronic details—

(i) at the time when the information was collected; and

(ii) on the occasion of each communication with the data subject for the
purpose of marketing if the data subject has not initially refused such use.

(3) Any communication for the purpose of direct marketing must contain—

(a) details of the identity of the sender or the person on whose behalf the
communication has been sent; and

(b) an address or other contact details to which the recipient may send a request that such communications cease.

The effect of the PPI Bill will be to introduce a requirement of informed consent to email marketing campaigns and effectively outlaw independently created email databases which are then sold to marketers for their email campaigns. Section 66(2) imposes a set of onerous requirements on anyone compiling an email database for marketing purposes which preclude many of the methods used to compile and trade in these databases in use today.

The only legal email marketing campaigns that will likely be left standing will these those typically facilitated by opt-in consents given by customers when they complete application, bookings and similar forms for specifically chosen products and/or services. This represents a radical departure from the requirements established by the ECT Act and we should see the ECT Act amended quite substantially when the PPI Bill is passed and comes into effect.

While these developments may well mark the end of unsolicited bulk email marketing campaigns as we know them today, they could well mark the beginning of a new surge of social media-based marketing initiatives.

Social media campaigns usually involve fewer numbers of people directly contacted when compared to spam mailing lists comprising hundreds of thousands or even millions of direct recipients but I suspect marketers will see better returns as people responding to those new campaigns may well be more engaged and passionate about the products and services they choose. Many businesses won’t make the transition from bulk email campaigns to social media-based campaigns but those that do may find the results surprising. Of course this also represents a tremendous opportunity for social media agencies that can deliver smart, relevant and effective results.

This transition will also mean that marketers must carefully consider the legal challenges that apply to the social Web and social media, generally speaking. Just as companies may encounter charlatans posing as social media consultants (this hilarious video illustrates what I mean by this), they will also encounter lawyers who claim to have a handle on this space but lack the insight into the social Web to be truly effective.

Of course none of these legal developments will have much of an impact on illegal spammers who will continue to inundate you with Viagra, cheap watches and penis enlargement emails. This is probably a good time to get your spam filters set up and running effectively.

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