What mathematics can teach us about email marketing?

This is a guest post from Christian Højbo Møller. Christian is educationally an economist but has spent most of his time being a marketer. Although he is specialized in SEO, he has been working with Owned Media as a discipline for many years. He is very data-driven and has an excellent head for math, which makes his view and points on email marketing specialist.

Christian, take it away.


Mathematics is a fantastic but difficult thing.

If you have ever seen the movie Moneyball, with Brad Pitt, then you must also have had the feeling that formulas, metrics and equations can explain things that we, as humans, have great difficulty unravelling ourselves.

When math is done right, it enables us to easily test out hypotheses by doing complex calculations on future scenarios – quickly.

If you are not a sabermetrician like Bill James (the man who began designing the baseball math), then don’t worry. I have done the calculations and build a calculator that will enable you to work with your own hypotheses.

via GIPHY

Just imagine some of the scenarios explained below. They are all developed by a set of neat ideas, good thoughts and important questions, but require a complex mathematical model to truly answer.

Frequency hypotheses

How often should we email our subscribers? How much and in what should we invest our resources to get the best and most lucrative outcome from our email marketing?

Imagine this…

Today your company has a monthly budget (mostly based on employee wages and software expenses) of $1200. Based on this budget the current aim is to send out two monthly newsletters that get a 40% open rate and a 10% click rate.

Create your hypotheses

  1. Would it be better to send three monthly (worse) emails that only get 35% open rate and 8% click rate?
  2. Would it be better to increase the budget by 50% to send that one additional email?
  3. Would it be better to double the budget to simply double the number of emails (we assume that the average click rate will decrease to 9% and the web conversion rate from mail decrease to 4,5%)?
  4. Would it be better to invest $15K to automate some systems that allow the team to stay on the same budget but send three emails a month?

Note: By the term “better” I am strictly referring to “would make more money”.

I have never met or read anyone who has a way of easily answering those questions.

I built a mathematical model for calculating, testing and analysing your email marketing setup in my startup. Follow the first link to read a more thorough account of the model, or scroll to “How to use the calculator” in this post to see it in action.

Additional status quo information

This model cannot tell you how the world works. However, if you have an idea of how the world works, it can tell you which of your thoughts are the best ones!

Given this information:

  • 10.000 existing permissions
  • 800 new permissions per month
  • 1,5% increase in new permissions per month
  • Unsubscribe rate is 0,5% per email
  • A natural 1,17% per month die-rate of emails
  • 0,08% inflation per month
  • 2% alternate monthly rate (discounting rate)
  • 5% sales conversion rate from email traffic
  • Average order value of $80
  • 50% margin on product

Which of the four hypothesis we created together do you expect to be the most lucrative over the next year? Next three years? Next five years?

Even if you are a mathematical genius who can perform multiple discounted cash flows in your head in a matter of minutes, this question requires a model:

When we use the mentioned model, we can calculate the monetary outcome of each hypothesis. This is the output of the model in one year, three years and five years:

Profits

Status quo

H1

H2

H3

H4

Short-term: 1 Year

9.485

10.086

13.498

8.966

2.875

Medium-term: 3 Years

48.253

47.963

66.304

53.794

64.800

Long-term: 5 Years

97.797

94.759

132.331

112.985

136.606

In both the short- and medium- run the 2nd hypothesis, where you increase the budget to send an extra monthly email, would be the most lucrative.

However, in the long run, the 4th hypothesis, where you invest 15K today to automate the process and thereby be able to send one additional email per month, would win your company the most money.

Perform several iterative experiments

What if you combined the 2nd and 4th hypothesis and do both?

Profits in

Status quo

H2

H4

H2 + H4

Short: 1 Year

9.485

13.498

2.875

6.429

Medium: 3 Years

48.253

66.304

64.800

79.447

Long: 5 Years

97.797

132.331

136.606

163.724

The 2nd hypothesis is still the best in the short run, but in the medium- and long run it would be highly beneficial to execute on both the 2nd and 4th hypothesis.

Performing the one-time investment of the 4th hypothesis and the continuous increase in the monthly budget of the 2nd hypothesis would increase profits in present value* from around 98K to around 164K – a huge gain in earnings.

*Money is worth less in the future than it is today. Money can be invested and thereby yield a return. Furthermore, inflation will make money worth less every year. This aspect of financial email marketing planning (called discounting) is important, especially in the medium and long run.

How to use the calculator

You can find the calculator right here, and make your own copy by clicking “File” then “Make a copy” and save a version of the Sheet to your own Google drive.

Below you can see how the calculator works. Input current “status quo” metrics in the first column and add “changes” in the hypothesis columns and watch the numbers change as you go.

What’s the point?

The mathematical model is on point. But that alone does by no mean secure a valid test of our hypotheses. Although the math is objectively true, the inputs are subjective and biased.

Questions like, how much does our click rate drop if we only spent half the time producing a great email? Or how much would our open rate drop if we sent out commercial newsletters once a week instead of once a month?

Those are delicate and unpredictable questions. They will vary from company to company and be estimated differently from marketer to marketer.

But the real world outcome doesn’t matter in decision making. Let me explain.

If you believe that your company’s open rate will decrease by 20% from 40% to 32% if you change your newsletter frequency from 2 times a month to 4 times a month, there is a way to calculate if that outcome is desirable – before running the actual real-world experiment.

I genuinely believe, however, that validating our intuitions can be valuable.

As Henri Poincare, one of the foundation builders of chaos theory said in The Foundations of Science:

It is far better to foresee even without certainty than not to foresee at all.

Knowing and understanding the positive or negative consequences of experimenting with the different variables of email marketing like open rate, frequency or click rates can help everyone make better business decisions moving forward.

Important considerations

Discount rate

One of the main variables in a discounted cash flow is the discount rate. The discount rate is the return you expect on your investments, ROI (in this case per month).

How do you know what discount rate to use?

A good start for someone new to financial models like this one is to ask yourself “how much is our company expecting to grow this year”?

Let’s pretend the answer to that question is 30%. Remember to not simply divide this yearly growth by 12 (30%/12 = 2,5%) to get it in months. Due to compound interest, a monthly growth of 2,5% is actually a yearly growth of 35%.

To easily calculate a reasonable monthly discount rate do this: (1+[forecasted/budgeted yearly growth in decimals])^(1/12)-1

Then you would get a monthly rate of (1+0,25)^(1/12)-1 = 0,0188 = 1,88%

So a monthly growth rate of 1,88% is equal to 25% yearly growth rate.

Short-, medium- or long-term investments

How far into the future do you want to plan? There is a big discrepancy between investing for short- and long-term gains. So, you should consider what time frame makes the most sense for your company.

Furthermore, this decision should be nested on the numbers.

You might not want to lose money next year in order to make 20K more over the next 5 years. However, it would be entirely different if you had to take a short-term loss to realize an extra 500K over the next 5 years.

Hypotheses to play with

  • Would it be lucrative to invest X today to increase the permission growth from Y to Z?
  • Would it be lucrative to invest X today in automating processes that allow you to increase your email frequency by Y emails per month?
  • Would it be lucrative to ask for a budget raise of X to improve the quality of every email and thereby increase click rates by Y percent?
  • Would it be lucrative to invest X today to increase the flow of new permissions per month from Y to Z?

You can also use the model to ask a different set of questions:

  • How much does the open rate have to increase for us to break even on a budget increase?
  • How much should the amount of monthly permission increase to make it worthwhile our resources to create so-called content upgrades for these six popular blog posts?

Collecting the pieces

To sum up, I believe that forecasting, test, calculating and validating our ideas and hypotheses before we do real-life experiments is super, super valuable.

This mathematical model should hopefully empower you to think harder about the tough questions in data-driven marketing and validate you and your team’s email ideas in the future.

I highly encourage you to post any questions in the comment section below or message and connect with me on LinkedIn (Buuuh, no Twitter? No… Twitter is a sad thing in Denmark).

Lycored Campaign Spotlight: #rethinkbeautiful

By: Jacolyn, Account Director

To stay competitive in an ever-changing, fast-paced communications environment, brands are seeking effective, integrated marketing communications plans versus relying on one silo of the industry to achieve campaign success.

This holistic approach to combining Public Relations, Marketing and Advertising can produce the perfect combination of communications tactics that creates consistency in messaging and strongly helps to achieve brand campaign objectives and overall business goals.

Lycored, an international wellness company at the forefront of ingredient and nutrition supplements, looked to 5W Public Relations to develop and implement a 360-degree campaign that created a conversations around ingestible skincare as an essential part of skin health in the U.S. while promoting positive ideologies surrounding beauty from within and helping people love themselves more along the way.

5W and Lycored took a technical industry standard and turned it into a simple and relatable concept for consumers by breaking beauty out of its proverbial box and creating an emotional connection to ingestible skincare. Thus began the #rethinkbeautiful campaign – a multi-level campaign combining social media influencers, marketing and advertising videos and visuals, consumer activations and traditional media to both consumer and trade.

The exciting integrated campaign consisted of:

  • Social Media Influencer Program:To launch the campaign in August 2016, Lycored developed the ‘Beauty is What You Make It’ video showcasing individuals sharing what beauty means to them, creating the conversation that beauty comes from within. To promote the video, 5W developed a curated micro-influencer campaign and sourced on-brand influencers to share the video across Twitter, Facebook and Instagram along with the campaign hashtag, link to the video and campaign landing page to drive views and visitors.
  • Mobile Love Letter Activation:As an extension of the #rethinkbeautiful campaign, Lycored launched the “Letters of Love” Tour to inspire consumers to love themselves the way they love others and to show them that beauty comes from within. As a part of the tour, people were encouraged to write love letters to themselves that are mailed back when they least expect it. In conjunction with the Tour, a digital version of “Letters of Love” was launched on the designated campaign landing page.

  • Valentine’s Day Takeover:On Valentine’s Day, 5W released the second campaign video “Love is Beautiful” that asked one simple question: “What do you love about yourself?” The video promoted self-love and empowered viewers to love and see the beauty in themselves the way they are able to see it in others, and then write themselves a love letter through the ‘Letters for Love’ digital link. Along with the video, Lycored launched over 200 ads in London with one phrase, “Your Heart Has No Limits,” inviting viewers to join the #rethinkbeautiful movement.

  • Additional Campaign Tactics: At the start, a #rethinkbeautiful landing page was developed to have one location to drive consumers and industry insiders. In between larger campaign initiatives, editorial mailers are conducted with a branded “beauty box” consisting of elements that provide recipients with a foundation for helping them #rethinkbeautiful. Award winning study results of the Lycored ingestible skin health complex were also released and published in the British Journal of Dermatology, which found the complex has anti-aging and UV protection benefits.

Success in Numbers

The social influencer program achieved more than 410,000 video views, 2,600 likes/ reactions and 2,309 shares. Audiences posts more than 1,800 comments about beauty from within and ingestible skincare across all social media platforms on the individual influencer posts. 

To date, the mobile “Letters of Love” Tour has stopped in nine states, including two recent stops in 2018, and has inspired consumers and celebrities, ranging from Charlize Theron, Joshua Jackson and Jack Black, etc., to write over 6,000 love letter postcards.

The brand saw 288% growth in “Letters for Love” digital love letters and a 275% uptick in #rethinkbeautiful landing page visits through leveraging the Valentine’s Day takeover across various media platforms, including sourcing positive news sites with the information and respective links.

From covering the individual components of the campaign, the Letters of Love Tour and the #rethinkbeautiful campaign as a whole, the message on ingestible skincare and beauty from within transpired into media wins in consumer beauty and celebrity outlets including Brit+Co, POPSUGAR, SELF, Good News Network, Entertainment Tonight and Hollywood Life, INC Magazine and trade media including Nutraceuticals World, Nutraceutical Business Review, NutraIngredients USA, Cosmetic Business, and more. 

Building a Foundation for the Ingestible Skincare Market

From a business standpoint, throughout the campaign, Lycored received interest from multiple prospective business partners who became aware of the #rethinkbeautiful campaign and Letters of Love Tour, and were interested in potentially distributing Lycoderm to make it available to consumers. Likewise, the overall ingestible skincare category has grown rapidly due to the shift in consumer perceptions stemming from the campaign.

Industry Campaign Awards

Notably, Lycored won a trade industry award from Nutritional Outlook, being named one of four “Best of 2017” winners within the ‘Ingredient Supplier/Service Provider’ category, specifically as a result of the #rethinkbeautiful campaign achievements. 5W Public Relations was also nominated for a 2017 PR News Agency Elite Award in the Integrated Communications category for our work on this campaign.

The post Lycored Campaign Spotlight: #rethinkbeautiful appeared first on 5W PR News and Updates, NY Public Relations Agency Blog.

Deep Learning Aims to Upgrade Your Smartphone’s Brain


The advertising world loves big, shiny, techy things. Agency and client ears perk right up when they hear about virtual reality kiosks, gadget-filled activations and holograms of dead rock stars. But then there are the tech innovations that sound a bit, or a lot, less sexy. Things like deep learning.

Deep learning is a subset of machine learning that essentially teaches computers to find patterns in sounds, images and other data. And while that may not seem like much fun to your average social marketer or copywriter, the tech giantsthe Facebooks, Apples, Googles, Netflixes, Microsofts and Baidus of the worldare investing massive sums of money in it. For instance, Google reportedly spent more than $500 million to acquire deep learning firm DeepMind in 2014. Baidu, the Chinese smartphone giant, runs deep learning and artificial intelligence-centric R&D centers in Silicon Valley and Beijing. Apple hires deep learning experts at fever pitch.

Why the frenzy? Deep learning technology lets you unlock your phone with your thumbprint. It enables Facebook and government agencies to identify your face in pictures. And it helps Siri and Alexa understand just what the hell you’re saying. Advertisers are experimenting with using deep learning to count how many passersby stare at billboards. The self-driving cars that we’re told are just around the corner rely on deep learning to avoid hitting other cars. Or people.

Continue reading at AdAge.com

A Changing Culture of Premium

The rules of premium are changing. If once it was about showing off, now it’s all about ideas with substance. And that goes for brands too.

 

Read our latest report to find out which two factors are driving this shift plus how best to address the needs of today’s consumers.

 

Email harry.hembrow@liveandbreathe.co.uk for your free copy of A Changing Culture of Premium.

The post A Changing Culture of Premium appeared first on Live & Breathe.

A Week In Advertising’s Double-Edge Sword Of Gender Equality

The brand and ad work around International Women’s Day and an industry confronting its own demons.

The newest ad in The New York Times‘ award-winning “The Truth is Hard” campaign launched this week, featuring headlines from global women’s rights stories, and in its own description, “elevating women’s voices and exposing those who would otherwise silence them.” It’s another powerful spot from a pretty flawless campaign. And yet, it was created by agency Droga5, which in February was forced to fire its longtime chief creative officer Ted Royer, citing the need for a “safe and inclusive work environment.”

Read Full Story

What does GDPR mean for marketing in 2018?

In this article, we will be looking at GDPR from the perspective of how it will impact upon your marketing strategy and therefore, what does GDPR mean for marketing in 2018? The bottom line is that – as long as you are using data that has been ethically collected to market your business in a fair and transparent way – you have nothing to worry about. Furthermore, we consider GDPR to actually be a positive step in the right direction when it comes to the appropriate use of data by organisations who wish to raise awareness about their products and services to prospects and customers, in the hope of generating additional sales in some way or another.

The best advice we can give you is – don’t panic! This legislation is a relatively simple piece of good practice CRM housekeeping that we feel is absolutely necessary to protect the rights of all individuals globally, in an increasingly invasive dynamic digital world of big data marketing solutions. If you take on board the underlying principles upon which GDRP is based, not only will you keep on the right side of the law, but you will also in all probability develop better relationships with prospects and customers – and therefore deliver more effective marketing campaigns too.

GettyImages-500509967-1024x683 What does GDPR mean for marketing in 2018?

No one likes someone who intrudes! It’s the same when it comes to respecting your data.

Why not put yourselves in the shoes of the people receiving your communications, and try to see things from their perspective? Do you think they value receiving materials from your company in all the different ways you communicate with them? If not, perhaps you ought not to send them. We pretty much all dislike receiving junk mail through the post, but most of us do enjoy receiving tailored and relevant communications from brands we love from time to time. Why is this the case? Well, if you work out the answer to that question, then we guarantee that you will have an incredibly strong foundation for your organisation’s future communications strategy…!

As many will already know, GDPR stands for ‘General Data Protection Regulation’, an EU regulation coming into force on 25th May 2018. It sets out the rules by which companies must abide if they gather, hold and process anyone’s personal data. It sounds innocuous enough but has generated some unnecessary panic in certain quarters – by self-interested parties who may seek to benefit in some financial way through their unhelpful scaremongering – with the sense of metaphorical iron doors about to close between companies and any customers who haven’t positively expressed their willingness to receive communications.

Although true for some communication channels, it’s not true as a whole. Nor should anyone get into a flap over the stipulated fines for offenders of up to £17 million or 4% annual global turnover. Yes, these are eye-watering numbers, but these would only be levied for the most serious breaches.

In fact, so many stories of imminent doom have been circulating about the impact of GDPR that the body with responsibility for enforcing the regulations in the UK, the ICO (Information Commissioner’s Office), has felt the need to create a blog debunking some of the myths that have arisen. Here’s a quote from Elizabeth Denham, Information Commissioner, on the matter of those fines:

‘It’s scaremongering to suggest that we’ll be making early examples of organisations for minor infringements or that maximum fines will become the norm. Last year (2016/2017) we concluded 17,300 cases. I can tell you that 16 of them resulted in fines for the organisations concerned.’

So, as you can see, there is no need to panic! Yes, GDPR does involve a bit of effort, but it will ultimately help to create databases that emphasise quality over quantity – and that showcase your business in a better light to its customers. In fact, being proactive when it comes to GDPR governance could actually end up giving your business a long-term competitive edge in its marketplace…

What is behind GDPR?

GDPR affects how marketers are allowed to approach customers, and what they can do with the customer data they collect. Rather than a radical overhaul of the system, it is more a consolidation of existing practice preparing for GDPR – “less of a leap and more of a small hop!” as one commentator put it. The EU have set up a website specifically to provide information about GDPR at https://www.eugdpr.org/ that shows that the aim of the legislation is to “protect all EU citizens from privacy and data breaches”.

do-not-panic-1024x683 What does GDPR mean for marketing in 2018?

You shouldn’t feel vulnerable when companies approach you to use your details.

Of course, here in the UK, we are (at time of writing!) not very far away from ceasing to be EU citizens, but whatever doubts about the Brexit deal (if any) that we end up with, it is already known that we will continue to abide by GDPR rules, as well as those under another regulation coming in at exactly the same time as GDPR, the e-Privacy Regulation. In fact, it is the latter that has generated much of the anxiety about the impact of the new regime.

The e-Privacy regulation specifies the processing of data in connection with electronic communications and will replace the current Privacy and Electronic Communications Regulations (PECR). As well as encompassing phone calls, email and SMS – all previously governed by the PECR – the new regulation will extend to VOIP interactions (such as Skype), web-based email and the IoT (Internet of Things). It requires organisations – including marketers – using these channels in a B2C context, to have obtained the recipient’s consent to be sent communications. Every communication must be ‘transparent’, i.e. a message for marketing purposes must be clearly framed as such, state who it is from, and provide a simple option to opt out of future communications. Please note, by the way, that there is an overlap between B2B and B2C, in that the rules governing B2C marketing apply when dealing with sole traders or partnerships, even if one is communicating to them as businesses.

Consent
None of this seems unreasonable to us, and our sense is that most organisations will need to make few, if any, changes to comply. The main issue to consider is whether, and in what form, consent has been obtained from B2C customers. To comply with the e-Privacy Regulation – and GDPR – consent must have the following characteristics:

Separate: A consent request should be separate from any terms and conditions and not a precondition of signing up to a service unless necessary to receive that service.
Granular: Customers must be given options to consent separately to different types of processing. For example, separate consents should be obtained for sending emails and making telephone calls.
Named: The organisation and any third parties that will be relying on consent must be clearly and unambiguously named.
Active opt-in: Unticked opt-in boxes or similar must be offered. In other words, customers must take a positive step to opt-in. Silence or pre-ticked boxes cannot be construed as consent.
Documented: Records must be kept to demonstrate what the individual has consented to, and when and how they consented.
Easy to withdraw: It must be as easy to withdraw as it was to give consent – via a simple, effective mechanism (e.g. a clear ‘unsubscribe’ option within emails).

happy-customer-1024x683 What does GDPR mean for marketing in 2018?

Know your rights and feel comfortable with who uses your data.

Where organisations are already working to these standards, the consents they have obtained prior to 25th May 2018 will continue to be valid. The e-Privacy Regulation does not govern B2B marketing communications (except to partnerships and sole traders), nor non-electronic marketing channels. In these areas, while it is true that organisations can rely on consent – to the same standards described above – as their ‘lawful basis for processing data’, consent is not the only lawful basis available. In fact, the ICO itself says:

‘The GDPR sets a high standard for consent. But you often won’t need consent. If consent is difficult, look for a different lawful basis.’

In addition to consent, there are five other lawful bases for processing data. One is ‘contract’ which can be invoked where communication is necessary to fulfil a contract or provide a quote, but the one most relevant to marketers is ‘legitimate interests’.

The ICO suggests that the legitimate interests basis ‘is likely to be most appropriate where you use people’s data in ways they would reasonably expect, and which have a minimal privacy impact, or where there is a compelling justification for the processing’. In a marketing context, a company promoting its wares will not usually impact seriously on anyone’s privacy, especially when recipients of their promotions can unsubscribe at any time. The ICO continues:

‘There are three elements to the legitimate interests basis. It helps to think of this as a three-part test. You need to:
• identify a legitimate interest;
• show that the processing is necessary to achieve it; and
• balance it against the individual’s interests, rights and freedoms.

The legitimate interests can be your own interests or the interests of third parties. They can include commercial interests, individual interests or broader societal benefits.’

So, if you have a commercial interest in holding a customer’s data, this in itself can be a valid reason for you to hold and use some data about them. If following this route, the ICO requires you to balance your interests against the individual’s. ‘If they would not reasonably expect the processing, or if it would cause unjustified harm, their interests are likely to override your legitimate interests.’

To rely on legitimate interests as a basis of consent, organisations must carry out a legitimate interests assessment (LIA) and record the results to help demonstrate compliance. The legitimate interests should also be explained in the organisation’s privacy notice, which should include:

• how long personal data is retained,
• details of any sharing of personal data with third parties,
• an explanation of any profiling activities undertaken,
• how individuals can exercise their rights to opt-out or be ‘forgotten’,
• where to send complaints and if non-EU countries will process personal data.

The impact of GDPR and the ePrivacy Regulation on different aspects of marketing

Much of good practice under GDPR is about good communications between organisations and their customers – which is what good marketing is all about. As the Chartered Institute of Marketing puts it:

‘Whilst GDPR affects everyone within an organisation, marketers are particularly well placed to ensure GDPR compliance throughout their business. With a superior knowledge of the customer, marketers are able to enter into a dialogue with consumers regarding the changes GDPR will enforce, and understand what customers are willing to tolerate.’

If marketers are to take the lead in instilling GDPR into their organisations, they need to understand the effects of GDPR on the various communication channels they use.

With email marketing, GDPR doesn’t distinguish between B2B and B2C, but the ePrivacy law does – so opt-in consent must be obtained from individuals, including sole traders and partners. B2B marketers can continue to send marketing emails if they have completed their legitimate interests assessment, as described earlier.

Direct mail will be largely unaffected, as long as the means to opt out of receiving it is provided. There is no one opt-out service, so senders should, therefore, say which service they refer to when checking if people have opted out or not, and point people towards it if they would like to opt out of receiving their mailings. Current services include the DMA’s ‘Your Choice’, the Mailing Preference Service and the Royal Mail’s Door-to-Door Opt-Out. Expect to see direct mailing in a B2C context to increase, at least in the short term, because no opt-in consent is required from the customer.

Regarding telemarketing, the ePrivacy Regulation recommends the introduction of an ‘opt-out consent regime at a national level’. In the UK, we already have this in the shape of the Telephone Preference Service (TPS). Telemarketers are already required to refer to the TPS, and not call anyone who has opted out of receiving calls (those still bombarded by messages telling them they’ve been mis-sold PPI will appreciate the tighter enforcement that is being promised!).

Data gathered on social media, where it stays on the platform, will be covered by the platform’s privacy policy. However, if data is exported from the platform, for example by being added to a company’s CRM, it is then the exporter’s privacy policy that counts. Note that it will not be permitted to take a customer’s email address supplied when joining a social media platform and then use it in any undeclared email marketing.

The use of bought-in data lists may be limited by GDPR and the e-Privacy regulation. If individuals have to give their explicit consent to receive specific electronic communications from an organisation, that consent cannot be extended to other third parties. Companies who sell data as a major part of their activities may find this is no longer open to them. In response to the ICO’s draft guidance on consent, Experian said:

‘On the whole, the Guidance was in line with our expectation apart from the requirement to name all third parties with whom personal data would be shared. Our view is that this requirement if applied could create significant challenges including for SMEs and start-up businesses who do not have an existing database of prospective customers that they can engage with to generate sales.’

The impact on how marketers interact with customers and prospects at different points within their strategic bowtie marketing CRM solution (that communicates to both prospects and customers) could be significant. As suggested above, we may see significant growth in non-electronic communications, such as direct mail, being used to generate leads and build databases to add new contacts to the left side of the bow. At the same time, with some routes to gaining new B2C contacts being cut off, retaining and developing existing customers will become even more important: the more of those who can be turned into advocates and ambassadors, the more they will help bring in new contacts that companies can no longer reach directly. Jim Conning of Royal Mail Data Services adds:

‘If you’ve got a relationship with a customer, and you develop that, so it’s an accurate conversation, and you give the customer the opportunity to opt-out every time you communicate with them, then you’re going to get more business from that. It’s much cheaper to develop a customer that you already have than find a new one.’

Marketers (along with everyone else) must also respect consumer rights

GDPR not only provides rules that organisations must adhere to when handling data, it also sets out specific rights for individuals, namely:
1. The right to be informed about how their data will be used
2. The right of access – an individual asking what data is held about them and how it is used must be given that information
3. The right to rectification of inaccurate or incomplete data
4. The right to erasure – known colloquially as ‘the right to be forgotten’
5. The right to restrict processing, e.g. preventing data’s use if it is inaccurate
6. The right to data portability, allowing individuals to obtain and reuse their personal data for their own purposes across different services
7. The right to object to data processing based on legitimate interests (so the individual’s right to say ‘No’ will generally outweigh an organisation’s right to hold and process data based on its legitimate interests
8. Rights in relation to automated decision making and profiling

big-data-1024x576 What does GDPR mean for marketing in 2018?

Knowing who holds your data and what they use it for, is your right!

The last of these rights is particularly significant given the increasing use of automation in managing and using data. People must be informed about how their data is held within databases/CRMs, including any profiling done with it. In a recent Marketing Week article, John Mitchison, Director of Policy and Compliance at the DMA, offered the following advice:

‘If you’re doing something straightforward like segmenting your file based on the consumer’s age, what they have bought in the past or where they live in the country, that’s fine – you can explain that very simply. However, if you were doing something much more intrusive – maybe you’re going out to third parties and getting additional data about the income of the household or the car they drive – while you may have a very good reason for collecting that data, it might be more difficult to do that under legitimate interests. If you’re doing-particularly sensitive profiling, you might have to ask for consent.’

The post-GDPR environment

The new regulations will be a good thing for marketing. Bad practices, which irritate and alienate customers, will be clamped down on, with marketing’s overall reputation theoretically rising as a result. GDPR will help to make consumers aware of how and when their data is used, so successful brands will be the ones trusted to handle data correctly. (Campaign magazine recently reported that seven out of ten customers would boycott a brand that mishandled their data.) That’s why the fines that could be levied for breaches are in many ways a side issue – far more important will be the impact on a brand’s reputation if the ICO finds it manifestly failing to safeguard data.

Viewed positively, the need to comply with the new regime from 25th May 2018 represents the perfect opportunity for organisations to review and tidy up their databases, data handling processes and data analysis strategies. All databases of any reasonable volume are bound to contain outdated or redundant entries that ought to be cleared out anyway as a matter of good governance, let alone in the interests of legislative compliance. Yes, databases will end up smaller, but they will be more accurate and up to date, potentially leading to more targeted marketing and better responses from recipients.

Consumers gaining awareness of the data held about them – and its value – with the ability to access and review it at any time, will effectively become owners of their data, the use of which they have full control over. This opens up the prospect of individuals even selling rights to companies to handle and use their data. No doubt there will be some developments none of us can foresee – rules and regulations almost inevitably lead to unexpected and unintended consequences, so it will be interesting to see what plays out.

The existing data protection regime was established before many of the platforms so familiar to us today were even invented, and the new GDPR and e-Privacy Regulations are largely concerned with catching up with the fast-changing world of digital communications. Inevitably, technology will continue to advance faster than legislators can keep up with it, but the new rules applying from May 2018 create a sound set of broad principles for those handling data – including marketers – to follow. They represent a chance to build greater trust and engagement. As the Direct Marketing Association puts it,

‘There is no need for marketers to fear GDPR, far from it. Use these new rules as a catalyst to become more customer-centric as an organisation, rather than thinking of it as merely a legal requirement.’

preparation-1024x725 What does GDPR mean for marketing in 2018?

General Data Protection Regulation which will come into effect on 25 May 2018 – Are You ready?

What to do next

1. Audit and, if necessary, clean up your existing database

2. Decide which lawful basis for processing your organisation will operate under.

3. If you use electronic communications to communicate with individuals, sole traders and partners, the only lawful basis for processing their data are to have their opted-in consent, so use multi-channels to encourage as many of them to opt-in prior to May as you can.

4. If you will be using the legitimate interests basis, carry out a legitimate interests assessment.

5. Update your privacy notice and make sure it easy to find on your organisation’s website.

For more detail, the GDPR section of the ICO website provides helpful and detailed checklists to work through to ensure you meet the requirements of the GDPR and e-Privacy Regulation.

What will be the impact of GDPR on marketing strategy in 2018?

In this article, we will be looking at GDPR from the perspective of how it will impact upon your marketing strategy in 2018. The bottom line is that – as long as you are using data that has been ethically collected to market your business in a fair and transparent way – you have nothing to worry about. Furthermore, we consider GDPR to actually be a positive step in the right direction when it comes to the appropriate use of data by organisations who wish to raise awareness about their products and services to prospects and customers, in the hope of generating additional sales in some way or another.

The best advice we can give you is – don’t panic! This legislation is a relatively simple piece of good practice CRM housekeeping that we feel is absolutely necessary to protect the rights of all individuals globally, in an increasingly invasive dynamic digital world of big data marketing solutions. If you take on board the underlying principles upon which GDRP is based, not only will you keep on the right side of the law, but you will also in all probability develop better relationships with prospects and customers – and therefore deliver more effective marketing campaigns too.

Why not put yourselves in the shoes of the people receiving your communications, and try to see things from their perspective? Do you think they value receiving materials from your company in all the different ways you communicate with them? If not, perhaps you ought not to send them. We pretty much all dislike receiving junk mail through the post, but most of us do enjoy receiving tailored and relevant communications from brands we love from time to time. Why is this the case? Well, if you work out the answer to that question, then we guarantee that you will have an incredibly strong foundation for your organisation’s future communications strategy…!

As many will already know, GDPR stands for ‘General Data Protection Regulation’, an EU regulation coming into force on 25th May 2018. It sets out the rules by which companies must abide if they gather, hold and process anyone’s personal data. It sounds innocuous enough, but has generated some unnecessary panic in certain quarters – by self-interested parties who may seek to benefit in some financial way through their unhelpful scaremongering – with the sense of metaphorical iron doors about to close between companies and any customers who haven’t positively expressed their willingness to receive communications.

Although true for some communication channels, it’s not true as a whole. Nor should anyone get into a flap over the stipulated fines for offenders of up to £17 million or 4% annual global turnover. Yes, these are eye-watering numbers, but these would only be levied for the most serious breaches.

In fact, so many stories of imminent doom have been circulating about the impact of GDPR that the body with responsibility for enforcing the regulations in the UK, the ICO (Information Commissioner’s Office), has felt the need to create a blog debunking some of the myths that have arisen. Here’s a quote from Elizabeth Denham, Information Commissioner, on the matter of those fines:

‘It’s scaremongering to suggest that we’ll be making early examples of organisations for minor infringements or that maximum fines will become the norm. Last year (2016/2017) we concluded 17,300 cases. I can tell you that 16 of them resulted in fines for the organisations concerned.’

So, as you can see, there is no need to panic! Yes, GDPR does involve a bit of effort, but it will ultimately help to create databases that emphasise quality over quantity – and that showcase your business in a better light to its customers. In fact, being proactive when it comes to GDPR governance could actually end up giving your business a long-term competitive edge in its marketplace…

What is behind GDPR?

GDPR affects how marketers are allowed to approach customers, and what they can do with the customer data they collect. Rather than a radical overhaul of the system, it is more a consolidation of existing practice preparing for GDPR – “less of a leap and more of a small hop!” as one commentator put it. The EU have set up a website specifically to provide information about GDPR at https://www.eugdpr.org/ that shows that the aim of the legislation is to “protect all EU citizens from privacy and data breaches”.

Of course, here in the UK, we are (at time of writing!) not very far away from ceasing to be EU citizens, but whatever doubts about the Brexit deal (if any) that we end up with, it is already known that we will continue to abide by GDPR rules, as well as those under another regulation coming in at exactly the same time as GDPR, the e-Privacy Regulation. In fact, it is the latter that has generated much of the anxiety about the impact of the new regime.

The e-Privacy regulation specifies the processing of data in connection with electronic communications, and will replace the current Privacy and Electronic Communications Regulations (PECR). As well as encompassing phone calls, email and SMS – all previously governed by the PECR – the new regulation will extend to VOIP interactions (such as Skype), web-based email and the IoT (Internet of Things). It requires organisations – including marketers – using these channels in a B2C context, to have obtained the recipient’s consent to be sent communications. Every communication must be ‘transparent’, i.e. a message for marketing purposes must be clearly framed as such, state who it is from, and provide a simple option to opt out of future communications. Please note, by the way, that there is an overlap between B2B and B2C, in that the rules governing B2C marketing apply when dealing with sole traders or partnerships, even if one is communicating to them as businesses.

Consent
None of this seems unreasonable to us, and our sense is that most organisations will need to make few, if any, changes to comply. The main issue to consider is whether, and in what form, consent has been obtained from B2C customers. To comply with the e-Privacy Regulation – and GDPR – consent must have the following characteristics:

Separate: A consent request should be separate from any terms and conditions and not a precondition of signing up to a service unless necessary to receive that service.
Granular: Customers must be given options to consent separately to different types of processing. For example, separate consents should be obtained for sending emails and making telephone calls.
Named: The organisation and any third parties that will be relying on consent must be clearly and unambiguously named.
Active opt-in: Unticked opt-in boxes or similar must be offered. In other words, customers must take a positive step to opt-in. Silence or pre-ticked boxes cannot be construed as consent.
Documented: Records must be kept to demonstrate what the individual has consented to, and when and how they consented.
Easy to withdraw: It must be as easy to withdraw as it was to give consent – via a simple, effective mechanism (e.g. a clear ‘unsubscribe’ option within emails).

Where organisations are already working to these standards, the consents they have obtained prior to 25th May 2018 will continue to be valid. The e-Privacy Regulation does not govern B2B marketing communications (except to partnerships and sole traders), nor non-electronic marketing channels. In these areas, while it is true that organisations can rely on consent – to the same standards described above – as their ‘lawful basis for processing data’, consent is not the only lawful basis available. In fact, the ICO itself says:

‘The GDPR sets a high standard for consent. But you often won’t need consent. If consent is difficult, look for a different lawful basis.’

In addition to consent, there are five other lawful bases for processing data. One is ‘contract’ which can be invoked where communication is necessary to fulfil a contract or provide a quote, but the one most relevant to marketers is ‘legitimate interests’.

The ICO suggests that the legitimate interests basis ‘is likely to be most appropriate where you use people’s data in ways they would reasonably expect, and which have a minimal privacy impact, or where there is a compelling justification for the processing’. In a marketing context, a company promoting its wares will not usually impact seriously on anyone’s privacy, especially when recipients of their promotions can unsubscribe at any time. The ICO continues:

‘There are three elements to the legitimate interests basis. It helps to think of this as a three-part test. You need to:
• identify a legitimate interest;
• show that the processing is necessary to achieve it; and
• balance it against the individual’s interests, rights and freedoms.

The legitimate interests can be your own interests or the interests of third parties. They can include commercial interests, individual interests or broader societal benefits.’

So, if you have a commercial interest in holding a customer’s data, this in itself can be a valid reason for you to hold and use some data about them. If following this route, the ICO requires you to balance your interests against the individual’s. ‘If they would not reasonably expect the processing, or if it would cause unjustified harm, their interests are likely to override your legitimate interests.’

To rely on legitimate interests as a basis of consent, organisations must carry out a legitimate interests assessment (LIA) and record the results to help demonstrate compliance. The legitimate interests should also be explained in the organisation’s privacy notice, which should include:

• how long personal data is retained,
• details of any sharing of personal data with third parties,
• an explanation of any profiling activities undertaken,
• how individuals can exercise their rights to opt-out or be ‘forgotten’,
• where to send complaints and if non-EU countries will process personal data.

The impact of GDPR and the ePrivacy Regulation on different aspects of marketing

Much of good practice under GDPR is about good communications between organisations and their customers – which is what good marketing is all about. As the Chartered Institute of Marketing puts it:

‘Whilst GDPR affects everyone within an organisation, marketers are particularly well placed to ensure GDPR compliance throughout their business. With a superior knowledge of the customer, marketers are able to enter into a dialogue with consumers regarding the changes GDPR will enforce, and understand what customers are willing to tolerate.’

If marketers are to take the lead in instilling GDPR into their organisations, they need to understand the effects of GDPR on the various communication channels they use.

With email marketing, GDPR doesn’t distinguish between B2B and B2C, but ePrivacy law does – so opt-in consent must be obtained from individuals, including sole traders and partners. B2B marketers can continue to send marketing emails if they have completed their legitimate interests assessment, as described earlier.

Direct mail will be largely unaffected, as long as the means to opt out of receiving it is provided. There is no one opt-out service, so senders should therefore say which service they refer to when checking if people have opted out or not, and point people towards it if they would like to opt out of receiving their mailings. Current services include the DMA’s ‘Your Choice’, the Mailing Preference Service and the Royal Mail’s Door-to-Door Opt-Out. Expect to see direct mailing in a B2C context to increase, at least in the short term, because no opt-in consent is required from the customer.

Regarding telemarketing, the ePrivacy Regulation recommends the introduction of an ‘opt-out consent regime at a national level’. In the UK, we already have this in the shape of the Telephone Preference Service (TPS). Telemarketers are already required to refer to the TPS, and not call anyone who has opted out of receiving calls (those still bombarded by messages telling them they’ve been mis-sold PPI will appreciate the tighter enforcement that is being promised!).

Data gathered on social media, where it stays on the platform, will be covered by the platform’s privacy policy. However, if data is exported from the platform, for example by being added to a company’s CRM, it is then the exporter’s privacy policy that counts. Note that it will not be permitted to take a customer’s email address supplied when joining a social media platform and then use it in any undeclared email marketing.

The use of bought-in data lists may be limited by GDPR and the e-Privacy regulation. If individuals have to give their explicit consent to receive specific electronic communications from an organisation, that consent cannot be extended to other third parties. Companies who sell data as a major part of their activities may find this is no longer open to them. In response to the ICO’s draft guidance on consent, Experian said:

‘On the whole, the Guidance was in line with our expectation apart from the requirement to name all third parties with whom personal data would be shared. Our view is that this requirement, if applied, could create significant challenges including for SMEs and start-up businesses who do not have an existing database of prospective customers that they can engage with to generate sales.’

The impact on how marketers interact with customers and prospects at different points within their strategic bowtie marketing CRM solution (that communicates to both prospects and customers) could be significant. As suggested above, we may see significant growth in non-electronic communications, such as direct mail, being used to generate leads and build databases to add new contacts to the left side of the bow. At the same time, with some routes to gaining new B2C contacts being cut off, retaining and developing existing customers will become even more important: the more of these who can be turned into advocates and ambassadors, the more they will help bring in new contacts that companies can no longer reach directly. Jim Conning of Royal Mail Data Services adds:

‘If you’ve got a relationship with a customer, and you develop that, so it’s an accurate conversation, and you give the customer the opportunity to opt-out every time you communicate with them, then you’re going to get more business from that. It’s much cheaper to develop a customer that you already have than find a new one.’

Marketers (along with everyone else) must also respect consumer rights

GDPR not only provides rules that organisations must adhere to when handling data, it also sets out specific rights for individuals, namely:
1. The right to be informed about how their data will be used
2. The right of access – an individual asking what data is held about them and how it is used must be given that information
3. The right to rectification of inaccurate or incomplete data
4. The right to erasure – known colloquially as ‘the right to be forgotten’
5. The right to restrict processing, e.g. preventing data’s use if it is inaccurate
6. The right to data portability, allowing individuals to obtain and reuse their personal data for their own purposes across different services
7. The right to object to data processing based on legitimate interests (so the individual’s right to say ‘No’ will generally outweigh an organisation’s right to hold and process data based on its legitimate interests
8. Rights in relation to automated decision making and profiling

The last of these rights is particularly significant given the increasing use of automation in managing and using data. People must be informed about how their data is held within databases/CRMs, including any profiling done with it. In a recent Marketing Week article, John Mitchison, Director of Policy and Compliance at the DMA, offered the following advice:

‘If you’re doing something straightforward like segmenting your file based on the consumer’s age, what they have bought in the past or where they live in the country, that’s fine – you can explain that very simply. However, if you were doing something much more intrusive – maybe you’re going out to third parties and getting additional data about the income of the household or the car they drive – while you may have a very good reason for collecting that data, it might be more difficult to do that under legitimate interests. If you’re doing particularly sensitive profiling, you might have to ask for consent.’

The post-GDPR environment

The new regulations will be a good thing for marketing. Bad practices, which irritate and alienate customers, will be clamped down on, with marketing’s overall reputation theoretically rising as a result. GDPR will help to make consumers aware of how and when their data is used, so successful brands will be the ones trusted to handle data correctly. (Campaign magazine recently reported that seven out of ten customers would boycott a brand that mishandled their data.) That’s why the fines that could be levied for breaches are in many ways a side issue – far more important will be the impact on a brand’s reputation if the ICO finds it manifestly failing to safeguard data.

Viewed positively, the need to comply with the new regime from 25th May 2018 represents the perfect opportunity for organisations to review and tidy up their databases, data handling processes and data analysis strategies. All databases of any reasonable volume are bound to contain outdated or redundant entries that ought to be cleared out anyway as a matter of good governance, let alone in the interests of legislative compliance. Yes, databases will end up smaller, but they will be more accurate and up to date, potentially leading to more targeted marketing and better responses from recipients.

Consumers gaining awareness of the data held about them – and its value – with the ability to access and review it at any time, will effectively become owners of their data, the use of which they have full control over. This opens up the prospect of individuals even selling rights to companies to handle and use their data. No doubt there will be some developments none of us can foresee – rules and regulations almost inevitably lead to unexpected and unintended consequences, so it will be interesting to see what plays out.

The existing data protection regime was established before many of the platforms so familiar to us today were even invented, and the new GDPR and e-Privacy Regulations are largely concerned with catching up with the fast-changing world of digital communications. Inevitably, technology will continue to advance faster than legislators can keep up with it, but the new rules applying from May 2018 create a sound set of broad principles for those handling data – including marketers – to follow. They represent a chance to build greater trust and engagement. As the Direct Marketing Association puts it,

‘There is no need for marketers to fear GDPR, far from it. Use these new rules as a catalyst to become more customer-centric as an organisation, rather than thinking of it as merely a legal requirement.’

What to do next

1. Audit and, if necessary, clean up your existing database

2. Decide which lawful basis for processing your organisation will operate under.

3. If you use electronic communications to communicate with individuals, sole traders and partners, the only lawful basis for processing their data is to have their opted-in consent, so use multi-channels to encourage as many of them to opt-in prior to May as you can.

4. If you will be using the legitimate interests basis, carry out a legitimate interests assessment.

5. Update your privacy notice and make sure it easy to find on your organisation’s website.

For more detail, the GDPR section of the ICO website provides helpful and detailed checklists to work through to ensure you meet the requirements of the GDPR and e-Privacy Regulation.

Thrilling adventures with boxes and paper.

REEL Chicago – March 8, 2018

By Daniel Patton

Carbon, Whitehouse Post, and Cramer-Krasselt combined spy-thriller cool with cute-mascot warmth in a pair of spots for the Paper and Packaging Board that debuted in February.

Box Mission and Paper Pitch star a corrugated box and a ream of paper that spring to life during a home delivery and a corporate meeting.

Animated with smiling perfection, the mascots leap, float, zip-line, swing, hang, and fist-bump to a Mission Impossible-meets-Get Shorty kind of soundtrack.

The two 30-second TV commercials are part of a new national campaign titled, “Paper & Packaging – How Life Unfolds,” that also includes five self-directed, fully CG social media films and several print ads.

Carbon conducted several test-runs of the scenes before fully developing the characters. According to a press release, the process ultimately “helped the client and agency understand everything from range of movement and physicality to the potential for emotional expression.”

According to Jim Root, VP Creative Director at Cramer-Krasselt, it worked.

“Carbon’s characters surprised us round after round with unexpected moments of humanity,” he explains. “Even the subtlest movements communicated so clearly. We are so proud of how these characters turned out and look forward to what we can do with them next.”

Carbon worked with Whitehouse Post — its sister company and next-door neighbor — from edit through animation, lighting, rendering, composite and color.

With parallel edits, puppeteering footage, and overlapping layers, Editor Matthew Wood “allowed everyone to understand the timing of the spots before the edits were locked and the animation began.”

As the project moved forward, Carbon’s team of animators provided updates of the characters that, according to Carbon Chicago Managing Director Phil Linturn, ultimately looked “as if (they were) captured in-camera.”

“It was immediately clear to everyone involved that these characters were not cartoons,” he says. “We were tasked with creating 100 percent believable characters that genuinely belonged in a variety of scenarios where paper and packaging naturally exist.”

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