A recent campaign by night club operator Luminar should be a warning to the hospitality industry of the need to stay legal when carrying out direct marketing.
Whilst directly targeting potential customers with promotions is more effective than a ‘scattergun’ approach, the fact that alcohol is frequently involved can increase the likelihood of this activity being flagged up as breaking good practice guidelines, or even the law.
The Luminar case
Luminar are currently appealing against a decision of the Advertising Standards Agency that it targeted a 12 year old with an alcohol promotion. The child’s details were wrongly entered on the electoral role and hence were included in a mailing sent out on behalf of Luminar. The ASA ruled that even though checks were in place to prevent the mailing being sent to under 18s, the mailing had promoted alcohol to someone under 18 and had therefore breached its Code of Practice.
The outcome was a rapped knuckle, with Luminar being warned that the direct mail material must not appear again in its current form and that such promotions must not be targeted at under 18s. However, such public reprimands are never good PR.
What is direct marketing?
Direct marketing comes in many forms – for example you might make customers members of a “club” and send them exclusive offers, or invitations to events which they have attended before. Obtaining customer contact details and tracking customer activity (maybe through a loyalty card scheme) is the first step in the process. See our article on loyalty schemes.
Direct marketing, whether by post, email or SMS, can be defined as “the communication of any advertising or marketing material to a named individual”. If you plan to send an invitation to individuals offering them a free pint if they come to one of your outlets on Saturday night, you need to consider the legal issues when drafting and sending out the invitation.
Regulations to be aware of
Data Protection Act The Information Commissioner has published a useful guide to Direct Marketing which reminds businesses that the Data Protection Act (DPA) applies whenever you are processing personal data. If you know the name of the person who is going to receive your marketing, for example, because they gave you their details when they joined your loyalty scheme, then you must comply with the DPA.
The DPA requires that you process information fairly and lawfully and this includes: • Customers must know who you are and that you plan to use their information for marketing purposes. • You must also tell customers if you plan to pass their information on to third parties. • You should only use information for marketing if this was the purpose for which you originally collected it. • You must also keep information up to date.
Top tip: To check that you are obtaining the required consent when collecting customer data use the ICO’s direct marketing checklist
Privacy and Electronic Communication Regulations
In addition to the DPA, if you are sending direct marketing by electronic means (such as email or text), you will need to comply with the Privacy and Electronic Communication Regulations 2011 (PECR). This means that you cannot send an unsolicited email or text unless each individual you are sending it to has given their prior consent to this.
What is “prior consent”? If a subscriber actively ticks a box and positively indicates that they would like to receive communications from you then you can use their name and address as they have “opted-in” and given prior consent.
Soft opt-in: this is also permitted by the PECR, so that you are allowed to use email and text for direct marketing to an individual where:
- You obtained their details in the course of a sale or negotiations for the sale of a product or service to them i.e. they have stayed at your hotel or come to a promotional night at your outlet;
- The marketing email/text you send to them relates to similar products or services i.e. another stay at the hotel or promotional night at your outlet; and
- They were given a simple and free (other than the cost of transmission) way of refusing the use of their contact details at the time you collected them e.g. a box to tick to refuse further marketing emails/texts. There must also be a way of refusing more emails or texts every time you send them one – e.g. an unsubscribe email link or the option to text STOP to a given number. The only cost of this should be the cost of sending the message.
All direct marketing emails and texts must make clear who the communication is from, include an email address/phone number which recipients can use to notify you that they don’t wish to receive any future emails/texts, set out your company number, place of registration and registered address.
Marketing by Post
In order to send out a mail shot by post you need to collect customer’s names and addresses or buy a mailing list. Customers must be told when their personal data is being collected that it is going to be used for direct marketing purposes. When you collect the data there must also be a right for people to object to their personal data being used for direct marketing purposes.
Buying a marketing list
Great care needs to be taken if you are thinking of buying in a marketing list. This is because the “sender” needs to collect the email details of people that they want to e-market to and the PECR state that individuals must give their consent to the “sender” and therefore consent given to a third party is unlikely to be good enough. The soft opt-in criteria cannot be met with bought in lists. If you want to buy a list you must ensure that when the data was collected the individuals consented to receiving unsolicited email marketing from third parties.
The Mail Preference Service (MPS) and Email Preference Service (EPS)
Both the Advertising Standards Authority and the Direct Marketing Association specify in their codes of practice that you use the Consumer File complied by the Mail Preference Service (where people have registered with the MPS not to receive direct mail in the post) to clean your mailing list of addresses. If you are e-marketing it is also good practice to check your database against the email preference service run by the Direct Marketing Association.
The Advertising Standards Agency is an independent body set up by the advertising industry to police non-broadcast adverts, sales promotions and direct marketing. The ASA enforces its code with the ability to refer offenders to Ofcom or the OFT. You should ensure that any promotions or direct marketing comply with their principles:
- Advertising has to be legal, decent, honest and truthful.
- Advertisements must be clearly labelled and identifiable as advertising.
- Advertisements should not mislead e.g. by inaccuracy, ambiguity, exaggeration or in any other way.
- Marketers must consider the standards in society and the context of the advert to minimize the risk of causing offence or harm.
- Care must be taken when advertising to children or using children in advertisements.
- Individuals should be protected from unwarranted infringements of their privacy.
Advertising alcoholic drinks
Section 18 of the CAP Code relates specifically to the advertising of alcoholic drinks which it says should not be targeted at people under 18 and should not imply, condone or encourage immoderate, irresponsible or anti-social drinking.
The code sets out a number of rules relating to advertising alcoholic drinks, for example, marketing should:
- be socially responsible and not lead people to adopt drinking styles that are unwise e.g binge drinking
- not imply that alcohol enhances confidence or popularity, is a key component of success of a personal relationship or social event
- not link alcohol with seduction or bravery imply that it enhances attractiveness
- not imply that alcohol is indispensible or therapeutic or make any health or fitness claims
- not be likely to appeal particularly to under 18s
- not feature people under 25 unless they are obviously not drinking.
Direct Marketing Association
The Direct Marketing Association publishes a Code of Practice for its members and the Information Commissioner encourages all those involved in direct marketing to abide by this.
When deciding on a drinks promotion don’t forget that the promotion itself must not be “irresponsible”. Irresponsible promotions were banned when the new mandatory code for alcohol retailers was introduced in 2010. For further details see: http://www.alcoholconcern.org.uk/assets/files/New%20mandatory%20licensing%20conditions%20-%20Home%20Office%20April%202010.pdf
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.