Brands 'must adapt' to data reform

Warc, 9 May 2014

LONDON: Changes to European Union data protection laws could significantly affect the way brands engage with their customers because they would be required to provide an "opt-in" choice, which new research shows consumers are wary about.

Based on responses from 1,175 British and Irish consumers in February 2014, a joint study from online researchers fast.MAP, agency Tangible and data consultancy Opt-4 found 29% would opt-in to messages from brands compared with half (51%) who would not opt-out, which is the current requirement.

Furthermore, only 18% said they would opt-in to receive emails if a brand asked permission to share their data with "carefully selected companies", Marketing Week reported.

The new law, which is due to come into force in 2015 and will apply across all 28 EU member countries, is designed to give EU consumers more control over their personal data.

Despite concerns from the Direct Marketing Association, the European Parliament issued an unequivocal statement in March that the reform is "irreversible". Brands could also face huge fines for non-compliance under the proposals.

Rosemary Smith, director at Opt-4, warned marketers that they would have to take great care with the wording of their opt-in statements to comply with the new law.

"When the EU legislation becomes law, it will be a game-changer for all data-driven organisations. Permission will be harder to get and will have to be explicit," she said.

David Cole, MD of fast.MAP, agreed that "this will require a massive change in culture for most marketers" because some of them currently make their opt-out statement as low-key as possible within the existing regulations.

Another feature for marketers to consider is that the survey uncovered differences between age groups and geographic regions concerning the sharing of data.

Almost one-quarter (23%) of 18- to 24-year-olds said they would agree to opt-in compared with only 13% of 55- to 64-year-olds and 18% of 45- to 54-year-olds.

Meanwhile, 21% of people in the English Midlands said they were more likely to opt-in, but only 8% of people in Ireland agreed. Men were modestly more likely to opt-in than women (21% vs. 16%).

Turning to the businesses consumers are comfortable about sharing data with, banks topped the survey at 73%, followed by utilities (46%), online retailers (35%), telecom firms (23%) while publishers and gaming companies polled only 8%.

Nick Banbury, data strategy partner at Tangible, concluded that brands will need to ensure their messages are more suited to each customer's needs.

"Companies need to start thinking differently about customer data and realise that access to it is a privilege, not a right," he said.

Data sourced from Marketing Week; additional content by Warc staff