media update’s Adam Wakefield was at the IAB Digital Summit to hear what Elizabeth De Stadler, founding director of consumer and data protection consultancy Novation Consulting, had to say about how the POPI Act will affect direct marketers.

You wrote a piece published in the Financial Mail about the POPI Act. Please expand on the pros and cons of the POPI Act, as well as how you think direct marketers might approach it?

I think, as a whole, it’s good. I don’t have a problem with the notion that we need privacy protection, or that we need to curb the extent to which companies can use our information, because sometimes what companies do with that information is fairly creepy. It also it brings us in line with the rest of the world. 

My biggest criticism is that there’s this sort of 'technophobic' undercurrent in how POPI deals with direct marketing. In other words, all direct contact with customers is seen as bad, and that is simply not true.

Many customers appreciate direct marketing, particularly if it’s personalised. If it is about giving customers control, then the form prescribed isn’t going to do that because it’s not worded in plain English.

The form is difficult to understand. I think many people are going to fill it out incorrectly and they are going to say 'I don’t want it', but the form is going to be filled out as if they do want it – or the other way around.

That’s over-regulation, and it doesn’t do anyone any good.

When the POPI Act is implemented, do marketers need to go back and get permission from consumers who are already on their direct marketing list?

No. If the marketer got permission, they’re golden. If a marketer told me when they collected my information that they are going to use it to send me specials, then gave me the opportunity to unsubscribe every time I got the email – there is that unsubscribe at the bottom – then they’re also fine.

If you’ve been emailing me for 10 years and I haven’t said anything, then there is this soft opt-in concept. So, to answer your question, yes and no. The marketers that behaved in an ethical way will be able to continue to market to their lists.

Do you think there is a bit of naivety and unpreparedness about how deep the POPI Act’s impact might be within the marketing industry?

There are two things that are important. If you are doing advanced data analytics, make sure you have good information governance. If you are doing direct marketing, look at the state of your list. Look at the state of compliance with that list, and either do something or not do something.

I’m finding that there is definitely increased awareness. I also think there are a great many marketers that don’t even know what it is coming.

What are the penalties contained in the POPI Act?

The penalty for a breach of an act can be as much as R10-million, which is, if you look internationally, a small penalty. The European equivalent is 4% of global turnover. That’s the General Data Protection Regulation (GDPR), which says at a minimum, it’s approximately €20-million.

The main threat is to your strategy and your reputation. Let’s say for example that you just invested millions of Rands into a fantastic customer relationship management system, but you didn’t take POPI into account.

Tomorrow, the regulator comes in, and they can actually shut down your processes until you become compliant. You can actually waste quite a lot of money. You can have a business interruption and, when those things are all added together, with the reputational harm, it can add up to more than R10-million really quickly.

What opportunities have been created by the POPI Act for marketers?

Speaking on behalf of the IAB, this is the kind of thing that makes an industry band together and come up with, and I think this has probably been needed for a while, an industry code of conduct. 

It is not a set of rules, it is a set of principles. I think it is a marvellous opportunity for direct marketers to get their boards to give them a bit of money to clean up their data.

Also, we know the size of your list. Depending on why you are doing direct marketing, it's not about how you measure return on that fairly large investment. It is about the people that actually engage with the content. By fixing the way in which you ask for their consent, you also make sure that only the people that are going to engage with you get on that list in the first place.

To sum up, it makes it cheaper and increases your return on investment.

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The summit saw leading minds within the digital industry come together to speak about what is affecting their industry most. Read more in our article, IAB Digital Summit: Experience and transformation will affect the bottom line.