The Importance of Being … Enforced

When you’re a marketing organization and being watched is a matter of law, the risks of non-compliance can weigh very heavy when a firm runs afoul and is caught. Few businesses can well afford litigation, fines and bad publicity, plus potential years of consent agreements with all the documentation that may be required. Brand damage.

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When you are being watched, most of us pay a little (or a lot) closer attention to what we’re doing. It’s human nature to be mindful and act accordingly.

When you’re a marketing organization and being watched is a matter of law, the risks of non-compliance can weigh very heavy when a firm runs afoul and is caught. Few businesses can well afford litigation, fines and bad publicity, plus potential years of consent agreements with all the documentation that may be required. Brand damage.

Now let’s turn to self-regulation.

When you’re a marketing organization and being watched is matter of ethics, or of best practices, the risks of non-compliance may be either heavy or light — depending on the compliance question, its marketplace implications and how cooperative the organization is to conform to industry expectations.

Self-regulation, more accurately peer regulation, is usually more preferable than direct government regulation.

For one, in data-driven marketing, innovation is a constant. Disruption is ever-present. Technology keeps changing. How can government regulation even keep up? It rarely does. That’s where self-regulation provides American business a great advantage: rules of the road get set by principle, and the market adapts to those principles.

Then, there’s enforcement of those principles. For example, I work for the Digital Advertising Alliance — a self-regulatory program based on principles for interest-based advertising and multi-site data collection for the desktop world that have been adapted for mobile and cross-device environments. I’m also a member of DMA [Direct Marketing Association], which serves as one accountability partner of DAA (the other being the Council of Better Business Bureaus Advertising Self-Regulatory Commission). These two organizations enforce DAA Principles, each in their own way. However, they are independent from DAA: Those of us who work at DAA are not privy to DMA and ASRC self-regulatory enforcement investigations, until those proceedings are made public.

Earlier this month, the DMA announced its Annual Ethics Compliance Report, which documents how businesses comply with all of DMA’s Guidelines for Ethical Business Practice. [My comments here regard the contents of the overall report, rather than those specific to DAA and interest-based advertising.]

By reading a summation of the 11,300 consumer inquiries from January 2015 to January 2016, one sees an accurate snapshot of what’s on consumers’ minds regarding our business, and how we can better address those concerns to their satisfaction. DMA reported that last year, 90 percent of cases were resolved within 30 days. Thirty-seven emerged as matters referred to the DMA Committee on Ethical Business Practice (also known as Ethics Operating Committee) for further action. Continued non-compliance, or lack of response or cooperation, can lead to a referral to a government agency, if a legal matter may be in question, or if a company may not be following its own disclosures. DMA referred at least four cases to government entities.

Self-regulation without meaningful enforcement may or may not spur ethical or best practices. But add “enforcement with teeth” to self-regulatory codes and educate industry at every turn, and lo and behold, the right result happens. The outcomes serve to protect consumers, and to protect businesses, too — all without government regulation which can prove too restrictive or quickly obsolete.

Author: Chet Dalzell

Marketing Sustainably: A blog posting questions, opportunities, concerns and observations on sustainability in marketing. Chet Dalzell has 25 years of public relations management and expertise in service to leading brands in consumer, donor, patient and business-to-business markets, and in the field of integrated marketing. He serves on the ANA International ECHO Awards Board of Governors, as an adviser to the Direct Marketing Club of New York, and is senior director, communications and industry relations, with the Digital Advertising Alliance. Chet loves UConn Basketball (men's and women's) and Nebraska Football (that's just men, at this point), too! 

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