02 August 2018 Business

Pause follows GDPR build up

After all the anticipation for a boost in print demand, the arrival of GDPR has been followed by companies drawing breath rather than racing to embrace print.

GDPR has arrived and caused as much uproar as the Millennium Bug before it, at least in the run up to 29 May. On vesting day, there was a flurry of reports that an activist planned to sue Facebook and others about misuse of personal data.

The US tech company has been battered on from all sides about leakage of personal data and how that had been exploited by the less than scrupulous. As a demonstration of why GDPR is necessary, this could hardly have been better timed.

Facebook has since taken full page ads in the national press and produced a television ad campaign to reassure people that it takes the misuse of data issue seriously. Whether this is believed any more than the credibility of some items in news feeds is open to question.

GDPR seeks to restrict businesses from using personal data scalped from anywhere on line and using this to target emails or responsive ads. The fines are punitive, even for the likes of Facebook. Nobody wants to be the test case.

Certainly there have been fewer emails as some marketers sit back to watch and wait to see what comes next. Unfortunately they are taking their time with printed direct mail also. Instead of a flurry of print activity because marketers are forced to switch from digital to print, marketing spend as a whole has been frozen.

On the one hand, people are waiting for the dust to settle to see what is or isn’t permissible. On the other poor retail sales, underlined by trading figures from John Lewis and House of Fraser’s announcement that it planned to close several stores, are indicative of a crisis in the High Street. The easiest budget to cut in the short term is the marketing budget.

Some pundits have spoken about a generational change in shopping habits as online shopping and home delivery supplants the need to visit ‘the shops’. The hiatus in direct mail is down to tighter market budgets more than any concerns of a tap on the door from the Information Commissioner’s Office.

“We have not seen the predicted swing back to direct mail,” says Go Inspire group CEO Patrick Headley. “There are a number of things stopping it at the moment, but it will come back. At the moment a lot of people are waiting.”

“Everyone is still scared,” says Sam Neal, managing director Geoff Neal Group. “The vast majority of marketers market don’t really understand it and keep learning, almost on a daily basis. We think that some of the larger clients will not be doing anything until the end of the summer.

“We are still hopeful that GDPR will be beneficial to print as everyone starts to understand it.”

For while there is a pause in activity, there is plenty of discussion underway. The growth of interest in direct mail which had started well before GDPR, is continuing. For a younger generation in particular, print is the new media and is welcomed on the doormat. Print is capable of achieving the cut through that is needed to be effective, and within the law.

“Currently marketing budgets are tight, but at some point people will realise that they have to stimulate sales and have to achieve some sort of cut through to get people into the stores,” Headley says.

Many have worked at getting permissions to continue communication with customers and prospects. This has helped stimulate mail for Integrity Group. “GDPR has had a positive impact on lasered mail where companies are sending letters asking for permission to continue mailing them, but there seems to have been a drop off in four-colour work where we are supplied the base stock,” says Andrew Law.

“Customers seem to be holding their breath and there is definitely a drop off in carpet bombing campaigns.”

This is the expected outcome of the legislation. Consumers ought not be to subject to pointless email, telephone or even posted collateral without providing explicit and traceable permission. The legitimate interest clause provides some relief for posted mail, but it is being stretched in email marketing campaigns where some providers are taking the view that having signed up for one product, the publisher or agency is entitled to act as a conduit for third-party emails.

“GDPR was never about stopping people marketing,” says Headley. “It’s about not talking to people that don’t want to be spoken to. It is the implementation of the rules that is confusing people.”

Ahead of the vesting day, and continuing beyond, GDPR seminars have been well attended, whether those organised by Go Inspire, Paragon Customer Communications and other print groups, or by the BPIF where a series of presentations about the regulations were among the best attended it has organised. The Direct Marketing Association has held its own briefing meetings and provided screeds of advice, but was still finding a high degree of confusion among members in the weeks leading up to the GDPR kick off.

The arrival has also spurred innovation, the development of new styles of communication that are compliant with the legislation yet answer the problem of how brands are to acquire new customers. If it is taboo to address individuals without prior permission, it is not impossible to address small groups of people with identifiable interests and lifestyles and without using personal data.

This is the new partially addressed mail product, the result of work between Royal Mail and the direct mail industry under the Strategic Mailing Partnership. This is an acquisition product that can targeted by postcode, provided non personal data is used. It is not addressed to the householder, other than by Dear Occupier or a similar salutation.

The assumption is that houses sharing the same postcode will have similar lifestyles and demographics, so what is known about existing customers in that area can be overlaid on the neighbouring households.

This begins to come close to the European style door drops where what goes into the bundle of leaflets and flyers each German family receives each week is determined by where they live, proximity to stores, type of household and so on. This has been responsible for vast quantities of print and driving orders for web offset presses. Walstead’s latest acquisition of NP Druck in Austria is producing just this type of print. However, selective door drops of this nature have never taken off in the UK.

Partially Addressed Mail is a step in this direction, using the postal system to deliver the campaign. According to Howard Hunt managing director Danny Clarke: “We will gather insight and analyse performance, which will allow future development and optimisation of the this new mailing approach”. Howard Hunt is one of a handful of companies that will be running trials to test the effectiveness of the new product.

The Lettershop Group is another involved in the same trials. For managing director Simon Cooper, one of the key benefits is the speed with which a campaign can be put together and delivered compared to a standard door drop campaign. This has to be booked 11 weeks in advance and Royal Mail has limited capacity for this sort of job.

“It enables door drop mail to become more accurate,” he says, “and faster to put together.” This will make the campaign’s message more relevant than is possible with scheduled door drops. At that distance it is impossible to predict the weather for example, but with a shorter lead time it becomes possible to create and run a campaign that ties in with the sunshine, or England’s relative success in a football tournament.

Post GDPR direct marketing is about refining the message to the customer or prospect to ensure that it is relevant. Blanket campaigns that work through minimal response rates across as many recipients as possible become smarter campaigns because mass mailings to scalped email lists or households will be more difficult. In order to achieve the same response, the agencies and brands will need to be smarter to achieve the impact that is desired.

In short, print runs are going to be affected. There will be more targeted and fewer blanket campaigns. At Gecko, a marketing services printers in Leeds, Lisa Chapman sees GDPR as part of a continuing trend. “GDPR is, has been and will continue to be very interesting. It is a continuation of the provisions in the Data Protection Act, so for many it is only a short step to implement the new changes, even if it has taken some time for all the definitions to be finalised.”

This is the role of the Information Commissioner’s Office. It took far too long to set out precise explanations for what and what is not permissible under the new status quo. To a large extent these will be further shaped by case law as investigations get underway and prosecutions follow. This tardiness has had an impact on the hesitation that companies have had about committing to direct mail campaigns.

“We see GDPR as a good thing,” says Chapman. “If we can get our heads around it, we think it’s a positive step. Our ethos has always been speak to people that want to be spoken to about your product or service. It’s all about relevancy, speaking to people at the right time for them to make use of the information.”

Gecko is an HP Indigo user with a 12000 so is not itself geared up for long run mailings. Typical would be a run of 20,000 or 30,000 at the top end, fewer for higher value mailings.

There is trigger mail where the printed item is triggered through interaction on a website and leads also to an interactive personalised landing page showing only the products and product details that are relevant to that customer at that time.

For this to work the customer has to part with personal data, information about their choices and must be willing to allow the brand to employ that data. The big change under GDPR is that the individual owns his or her data and gives permission for it to be used. If that permission is misused, the individual can ask to see what personal data is held and can take back the personal data or in extremis make a complaint through the ICO.

Chapman continues: “We are talking about a value exchange and for that to work there has to be some form of relationship. A blanket mailing of 500,000 does not constitute a relationship.”

One of the vexed and still not clearly defined sections of GDPR is about legacy data and how long it can be held. It is clearly elastic. With a car purchase taking place every five or so years, it may be legitimate to hold the data for that length of time and to contact the customer about new offers at a time he will be thinking about a replacement car. On the other hand data about someone’s purchases of nappies will be out of date two or three years after buying the last pack of disposable nappies.

The provisions clearly point to making more intelligent use of data and mail. Filters that have so far applied to gone aways and to deceased files also include a field for those not wanting any communication.

A budget for a direct mail campaign may not need to cover as many prospects, potentially allowing a greater investment per piece. This may in turn increase response, reinforcing the importance of relevancy, but in the main for retention of existing customers.

These are the sorts of conversations that the direct mail printers are having with their customers, whether direct or via agencies. “Everyone has great ideas about what piece of information can or cannot be used, and we can help with that,” says Chapman. “Many have been preparing themselves for some time, identifying who they can or cannot communicate with.”

This led to the flurry of emails throughout May asking consumers to opt in to continue to receive communications, some with regret, some with more dire warnings, some with outright bribes.

Nobody has declared how successful these attempts have been in keeping data fresh and delivering the permissions required. Some have been sent letters to the same effect. No brand wants to be caught with dirty data.

Consumers, alerted to the arrival of GDPR, have been cautious about parting with personal data heightened by revelations from the likes of Facebook about how that data has been misused, sold on and treated in a cavalier fashion in the past.

The battleground for permissions has shifted from emails to websites where some companies are making it difficult for consumers that do not give permission to scalp their personal data, to use the website. Others report that agencies are trying to shift the responsibility from the brand that is advertising on the website to the publisher of that website even though data is being collected by the brand and may then be used to target a consumer.

Ironically for marketing companies to be successful in the post GDPR era, they will need more personal data about customers and more sophisticated algorithms to shape what they do with the data. Dragging a name from the electoral roll is not enough, the marketer must show that the message is relevant to the individual.

Few are concerned that the current slow down in direct mail signals a permanent change. Like Neal, Headley believes that once the summer is over retailers will realise they need to get shoppers back into their stores and that will mean the return of mailing campaigns.

“The cost of not doing anything is a loss of sales. If they are not selling anything, they will have to go out and drive interest. An email is easily deleted and forgotten. Print is a lot more robust and is able to get the cut through needed.”

Gareth Ward

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