Legal and ethical issues in marketing

We learned this week that there are a number of laws that regulate internet and interactive marketing. I asked the students to consider a scenario where a company obtained a list of mobile phone numbers in its target market and whether the company could use the list for text messages or phone calls promoting its services. We identified a number of laws that related to this issue. CAN-SPAM, requires express prior permission before sending the message and applies not only to email but to text messages that reference a domain name (3122222455@wirelesscarrier.com) and consumers cannot be required to incur any costs for the authorization. The TCPA (Telephone Consumer Protection Act) also prohibits the use of automated equipment to place calls to a mobile number without prior consent. In addition, the Mobile Marketing Association as published Guidelines which do not have the force of law, but also suggest that the consumer should have prior notice and consent that the text message is coming. The Do-Not-Call List would also likely apply if the company chose to call these numbers. If the phone number were obtained from children under 13, the Children's Online Privacy Protection Act (COPPA) would apply. This simple scenario indicates that internet marketing law is complex and evolving. From an ethical point of view, both guidelines and laws point to the simple principle of permission. Getting permission is an easy way to know that dealings with the customer are both ethically and legally correct. In addition to protecting children, we also protect consumer healthcare (HIPPA) and financial (GLBA) information. However, there is no general right to privacy of personal data in the United States as is required by the European Union, for example. We also discussed copyright law and the fact that peer-to-peer sharing of music is illegal, even though facilitated by technology. We will have to see how the music industry evolves and adapts to these technology challenges.

Email Marketing/Mobile

We had a good discussion on email marketing before I left for DMA and then learned the Email Marketing tool Exact Target. We learned the reason to use a tool like ET is the ability to get emails past potential spam filters that ISP's might set up and to manage many different emails effectively. The ability to include dynamic content for personalized offers is also a big plus of this type of system. A company such as Careerbuilder.com might send millions of emails per month and needs to effectively manage and track campaigns. Even though email marketing is a small percentage of total online advertising, its ability to target customers and be integrated within an overall multiple channel marketing campaign makes email an important and influential medium. Good emails have an effective and descriptive subject line and a clear offer or purpose. While email open rates remain higher than those of direct mail, we learned that same week at the CADM monthly luncheon program on mobile marketing that mobile emails can have an over 70% response rate! It seems as each new type of way to reach the customer comes on the scene response rates are high and then level off, but I am thinking mobile rates might remain high. People read their text messages within seconds typically instead of days or hours for email. We also learned how to identify "phishing" emails that want to get personal information for fraudulent purposes and about the CAN-SPAM act and how to remain compliant. Good email marketers want to follow the guidelines of that act and comply by having a subject line that clearly states the advertising purpose of the email and is consistent with the body of the email, a valid reply to address, a physical address and an unsubscribe provision.