In the latest of our occasional ‘no names, no packdrill’ series spotlighting prize promotion gaffes by big brand owners, we look at a recent promotion which failed to take advantage of new possibilities for prospect data capture.
Topic: Promotion marketing
Who: A substantial publisher
When: Autumn 2005
In this, the latest in our series of items focusing on prize promotion drop-offs by brand owners who should know better, we look at a free to enter prize draw operated by a well known business information publisher. Since one of the specialities of the publisher in question is legal information one might have expected them to get the rules of the prize draw right, but in at least 2 respects they got it wrong.
First of all, they failed to indicate that details of the prize winners could be obtained by writing in to the promoter at an identified postal address. This is not necessarily a legal requirement, but it is stipulated by the CAP Code of Advertising, Sales Promotions and Direct Marketing and is a standard rule for prize draws and competitions.
There was a second mistake. One of the rules ("the Rule") stated as follows:
Information provided by participants in registering for this competition will be used by [name of brand owner] for the purposes of this prize draw and for marketing purposes. If you do not wish us to use your information for these purposes, please write to the marketing department at the above address to inform us".
What could possibly be wrong with this?
The error relates to the capture of the contestant's e-mail address as part of the entry process.
Under the Privacy and Electronic Communications (EC Directive) Regulations 2003 there are various restrictions on the use of e-mail addresses for marketing purposes.
If all participants in this prize promotion could be guaranteed to be employees of limited companies providing their corporate e-mail addresses, then the e-mail addresses supplied would have been for "corporate subscribers". This would mean that as it stood, the above rule would probably be acceptable so as to allow the brand owner to use the contestant's e-mail address to send unsolicited marketing information about the brand owner's own products and services.
It would not be sufficient under the Data Protection Act 1998 ("the Act") however, to allow the brand owner to either use the e-mail address to send marketing information about third party products or share that e-mail address with third parties so the third parties could communicate direct with the contestants.
Why? Because of the "fair and lawful" processing requirements of the Act's data protection principle one as interpreted by the Information Commissioner's Office.
This dictates that if either promotion of third party products or sharing of data with third parties is intended, this is not regarded as something the normal individual would expect to happen unless such uses are specifically disclosed at the time of data capture. Furthermore, the ICO would normally expect an opportunity to be provided to opt out of such use.
But all this only applies if 100% of the contestants could be regarded as corporate subscribers. If and to the extent that a proportion of them could be regarded as individual subscribers (and this would seem highly likely in a legal business information scenario where many contestants might be employees of law firm partnerships) then different rules will apply.
The 2003 Regulations make it clear that unless the contestant can be regarded as coming within the "customer soft opt-in" exclusion, any e-mail address supplied could only be compliantly used by the brand owner in the future to the extent that it could be said that contestants, when supplying their e-mail address, were notifying the brand owner that they consented for the time being to unsolicited direct marketing e-mails being sent by or at the instigation of the brand owner.
We do not believe the Rule is clear enough in terms of its references to e-mail marketing to fulfil this requirement. Indeed there is no express reference whatsoever to e-mail addresses being used for marketing purposes, thus making it very difficult for the brand owner to argue that there has been a clear notification by the participant that they are happy to receive unsolicited direct marketing e-mails.
All not lost?
All might not be lost for the brand owner. There is a chance that they might bring themselves within the "customer soft opt-in" exception. Under the 2003 Regulations, marketers who obtain an e-mail address "in the course of a sale or negotiations for the sale" of the product or service to that individual can thereafter send unsolicited direct marketing e-mails provided certain requirements are satisfied.
One might ask how it could be argued that a contestant in a prize draw could be regarded as somebody who is buying or negotiating to buy a product from the promoter. The answer to this is that the Information Commissioner's Office has issued guidance on this point. It has said that provided the marketing purpose of the promotion is clear, then somebody who is entering a prize promotion in this context will be regarded as negotiating to buy a product from the promoter.
So far so good, but there are other requirements under the 2003 Regulations for "soft opt-in".
One of these is that at the time of e-mail address capture, the individual must have been given a simple means of refusing (free of charge except for the cost of the transmission of the refusal) the use of their contact details for the purposes of digital direct marketing promoting the promoter's similar products and services.
Rule fails on two counts
In that light, the Rule fails on two counts.
First of all it is nowhere near clear enough about any intention to send unsolicited direct marketing e-mails promoting the promoter's similar products. A mere general reference to "use of information supplied for marketing purposes" is not going to be sufficient here.
Secondly, the opt-out opportunity will not pass muster. In its guidance on this issue, the ICO has made it quite clear that in this context, the opt-out opportunity must be exercisable immediately and conveniently, without cost. We do not believe that inviting individuals to write in to a postal address would be satisfactory for these purposes. Far better would be the provision of an e-mail address to which unsubscribe message could easily and quickly be sent without charge.
Why this matters:
Recent surveys have indicated that the majority of businesses are still failing to get to grips with the 2003 Regulations in the context of digital marketing. This example illustrates this and underlines that it is by no means complex or challenging to obtain highly useful personal details in the context of a prize promotion, provided the correct rules are followed.