Spam canary in the consumer coal mine

By Larry Mogelonsky, P.Eng., www.lma.ca

The world of e-mail marketing is about to undergo yet another earth-shattering change. Well, at least in Canada it is. In case you aren’t aware of the latest parliamentary actions, it’s critical that you circle, star and double underline the day of Tuesday, July 1, 2014 because that is when the first of three overtures of Canada’s Anti-Spam Legislation (CASL) takes effect.

Designed with the intention of protecting Canadian consumers, it has vast and profound consequences for resident hoteliers, especially those working in meetings, those in group business or those who may be aggressively using electronic marketing through purchased lists. The new law essentially functions as the US CAN-SPAM Act of 2003 on steroids, requiring users to expressly opt-in for solicitor e-mails, whereas before this was regulated via an unsubscribe, or opt-out, functionality. A business must now have this consent or a documented, pre-existing B2C relationship prior to any consumer electronic message. Moreover, this pertains to all digital materials sent by or accessed by computer systems within Canada.

The second phase takes effect just six months later on Jan. 15, 2015, focusing on provisions related to program installations for computers, tablets, smartphones and any other software-based device, helping thwart malicious downloads.

The third and final phase, effective July 1, 2017, aims to enable statutory private rights of action against spammers. With enforcement by agencies as well as the courts, noncompliance fines will range from $200 per message to upwards of $10 million with robust capacity for personal as well as class action proceedings.

It’s a powerful law and a natural next step in the fight against unsolicited spammers. As for the title? Canada’s intransigent legislation may become the new benchmark for further regulations enacted in much bigger consumer markets like the United States and European nations.

Importantly, because of its emphasis on computer systems physically located within Canadian borders, it restrains both Canadian hospitality companies as well as foreign operators looking to penetrate the Canadian market. If iterations of CASL catch on in other larger markets, it will make e-mail and mobile marketing for hotels a very thorny game to play without accruing penalties. In fact, a few key adopters may be all that’s needed to make it virtually unplayable.

When the jig is up so the speak, marketers will have to look to other channels to effectively build relationships with consumers, even those where the rates of return aren’t nearly as lucrative as harvested subscriber lists.

The likely candidate will be social media or a budgetary resurgence for retargeting advertisements. Perhaps this will mark a renaissance for the more physical sales tactics such as tradeshows or magazines.

July is just around the corner, though. Everyone values their electronic marketing activity, but now you need to take steps to validate your databases. If you have established B2C relationships with, for example, past guests, then you have no worries. However, if you are unsure how your database has been obtained, you may want to distribute confirmations requesting that individuals verify their acceptance of your communications.

Cleaning up databases has always been important; now it’s essential.
Personally, I see this as the beginning of the end for spam and its marketing capabilities. As this, along with any subsequent action in other countries, will reduce your company’s supposed sales funnel, it’s critical that you make every B2C opportunity count. The future will favour conversion rate over reach. In the meantime, whether you are in Canada, the U.S. or overseas, you had better get a compliance team together to audit your current operations and implement necessary changes prior to July 1.

Larry Mogelonsky (larry@lma.ca) is the president and founder of LMA Communications Inc. (www.lma.ca). His latest anthology book titled Llamas Rule and his first book Are You an Ostrich or a Llama? are available at Amazon and Barnes & Noble.