Disrupting an industry typically involves new technology superseding the older, less original method of doing things. The rush to innovate sees entrepreneurs bypass the idiom, ‘if it ain’t broke, don’t fix it’. Ad-tech and martech describe innovation changing the advertising and marketing industries respectively. We explain what is ad-tech as well as the legal issues these new advertising agencies will need to grapple with as they rush to market.
What is Ad-tech?
Ad-tech is broadly described as the use of technology to analyse customer data to create more personalised interactions. For example, if you view a bike on 99bikes.com.au and the same bike shows up on your Facebook feed and as a banner ad on the economist.com article you’re reading. Ad-tech’s purpose is to tailor advertising to specific target markets, creating journeys for potential customers with the ultimate goal to land a sale at exactly the right time, e.g. when that bike you like goes on sale finally.
Key players in the space are SalesForce and Marketo, though these firms are involved more with martech. SalesForce and Marketo are pieces of software which allow businesses to analyse customer data and send curated content to potential customers when the time is right. Staying with the bike analogy, Marketo might allow 99bikes.com.au to keep track of when a customer bought their bike. 99bikes.com.au knows that after eighteen months, a new bike might need a service or new drive chain. Marketo finds all the customers who bought bikes nine months earlier. Now, all 99bikes.com.au needs to do is develop content explaining great care tips for bikes and how people can prolong the life of their bike, such as by regular servicing. With software like Marketo, 99bikes.com.au can send helpful, useful content to its customers, building trust and authority with consumers and hopefully, encouraging further sales.
Disruption – Out With the Old!
We all remember “The Big Ad” (Carlton Draught) and Sam Kekovich’s lamb ads. They were funny, memorable and well produced. However, they were probably ‘very expensive’ (as the Carlton Draught advertisement astutely puts it) and importantly, unlikely targeted. It’s difficult and imprecise to measure your ROI when you buy billboards, television commercials and radio ads. Here, ad-tech facilitates targeting very specific customers by analysing customer data. Ad-tech also disrupts by making advertising more accessible. Replicating “The Big Ad” is out of reach for most businesses who can’t afford the fees of creative agencies like Saatchi & Saatchi. Ad-tech allows businesses to create their own simple ads, such as banner ads, then engage a firm who can display the banner ads on websites that are visited by the target market.
Ad-tech industry players should know the legal framework they are likely to operate in – namely, spamming and privacy.
Spamming is a growing concern for businesses in the martech space. The Spam Act 2003 (Cth) (Spam Act) states that businesses can’t send unsolicited commercial electronic messages. Businesses need the consent of the people receiving their marketing emails – either express or inferred. Businesses can obtain express consent by having customers click a box that says yes, they consent to receiving newsletters. Consent can be inferred if the conduct of the parties and the business or another relationship indicates that there was consent.
What does this mean for businesses using martech/ad-tech agencies to analyse customer data and then send marketing emails based on the results? Here are our key tips for staying on the right side of the Spam Act:
- Get consent.
- Express: When your customers buy a product/service, have them tick a box which states ‘I agree to receiving periodic offers and updates’.
- Inferred: For inferred consent, you need to have a business relationship with a customer. In Australian Communications and Media Authority v Clarity1 Pty Ltd  FCA 410, the Court held that consent to receiving marketing emails was inferred because customers had bought products from Clarity1. Clarity1 didn’t have consent where it sent emails to people who had never bought products from it before.
- Section 21 of the Spam Act expressly prohibits using address harvesting software – so don’t do it!
- Include an unsubscribe function in your emails, per section 18 of the Spam Act.
- Make it clear that your business sent the email by providing details that can identify your business. Again, this is expressly required under section 17.
- Be a great business! Okay, while not explicitly stated in the Act, customers will keep coming back if you send them useful, relevant and timely content. Customers don’t like emails full of meaningless words that clog their inbox.
Deloitte’s recent report found that for the vast majority of consumers, trust (in the way organisations treated their privacy) was much more important than convenience. Customers will remember how you treat their data. This means that when you engage ad-tech/martech agencies to assist with marketing and advertising, you need to ensure that you won’t compromise your relationship with your customers. What can you do to avoid fracturing your relationship with your clients? Here are our essential tips.
- Be a model business: Although the Act doesn’t mandate this, the following actions are best practice and show your customers that you respect them and that the security of their information is of the utmost importance.
- Tell your customers when you’ll be sending them ‘stuff’ (e.g. newsletters, marketing). Telling your customers when you send information will create a transparent and trusting relationship. No need to do it every time but make it clear from the start.
- Buy great security software/implement good security measures: Keep your customer’s data safe by buying great security software – you don’t want to be the next Ashley Madison.
- Don’t collect credit card data: Australians are most concerned about sharing credit card details (71%); identification numbers (65%) and medical records (34%), according to Deloitte’s report. There’s too much risk in collecting credit card data. Leave it to the experts such as Braintree and Paypal to collect credit card details for payment.
Disruption is bringing widespread benefits to multiple industries – transport, hotels and design. Ad-tech and martech are helping make advertising and marketing much more affordable for many small businesses and much more targeted. Businesses wanting to leverage ad-tech and martech would be wise to inform themselves of the applicable privacy and spam laws. Importantly, if you have any questions, ask! You can speak with our IT lawyers on 1300 544 755.