Admation In Depth
Understanding Marketing Compliance
Recent legislation passed by the Federal Parliament and supported by the ACCC sheds new light on the importance of marketing compliance. Those brands found to be non-compliant can expect to be fined, and penalties will be steep.
According to the ACCC Chair Rod Sims: “We have strongly advocated for higher maximum penalties to enable courts to impose more substantial penalties. Penalties need to hit the bottom line so they are not simply seen as the cost of doing business … This is a profound change that I believe will improve corporate behaviour significantly, and so improve the Australian economy and how it works for consumers.”
With consumer watchdogs and technology being the all-seeing eyes today, brands need to ensure their marketing compliance is a top priority to protect both their reputation and profitability.
Think of marketing compliance as your professional and ethical brand standards
Marketing compliance refers to a set of external and internal regulations that businesses must adhere to in order to protect the consumer and the brand itself.
External marketing compliance: External marketing compliance is governed by regulatory bodies that monitor the marketing and advertising efforts of brands to ensure they do not mislead consumers. In Australia, the ACCC, Office of the Australian Information Commissioner (OAIC), Australian Communications and Media Authority (ACMA) and Advertising Standard Bureau are some of the organisations that monitor businesses for breaches in conduct. In America, the Federal Communications Commission (FCC), Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are a few of the governing bodies. Check out this list of legal obligations brands need to follow when marketing their products and services.
Internal marketing compliance: Internal marketing compliance is managed by the brand itself, which means setting protocols for how assets (logos, colours, fonts) and messaging should be used. Not to be underestimated, this kind of compliance builds a vital link between the brand and consumer. Just think of any major brand that has burrowed itself into our collective psyche. We instantly know who they are, what they sell and what they’re good at. What these businesses have managed to do is create and maintain a consistent brand story – setting a unique appearance and tone, a confidence, a professionalism that can only be surpassed by their enduring products and/or services.
What is marketing compliance?
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What happens when a brand’s marketing compliance fails?
When a brand fails to meet marketing compliance standards, it potentially sets in motion a range of outcomes.
- External compliance risks: Whether it’s misleading information or a genuine mistake that bypassed the marketing approval workflow process, this is what brands can expect when they do not comply with advertising legislation:
- A warning is issued (that could be made public). For example, ACMA publishes a list of 'spam and telemarketing enforcement actions' which have been issued to brands that have not been compliant with protocols. No-one likes to be spammed or receive unsolicited phone calls, so it’s never good news for brands to be outed on the list. ACMA's compliance and enforcement approach is available online for brands that don't want to make the naughty list.
- Expensive fines that will put a dent in the bottom line. To date, the highest penalty given to a brand for breaching competition legislation is $46 million, so the Federal Court isn't taking non-compliance lightly. For some multinational brands, fines could exceed the hundred million dollar mark. That's a good enough reason alone for brands to get on top of their marketing compliance.
- Being shadowed by a consumer watchdog for the next few years. And it doesn’t end with a warning or fine. If you’ve breached consumer laws, you can expect to have your marketing and advertising campaigns closely monitored for the next few years.
- A brand's reputation can be damaged. With socially-minded Millennials at the helm of social media and demanding that brands do better, reputations are at stake now more than ever. Misconduct can lose a brand many valuable customers which will inevitably eat into their bottom line.
- Internal compliance risks: When a business isn’t consistent with their branding and messaging, they risk losing an important connection with their customers which can result in a loss of sales. Brand consistency is at risk when:
- Old logos, colours, fonts and/or messaging are used in advertising campaigns
- Brand assets are poor quality, absent or inaccurately placed on collateral
- Brand messaging or tone doesn’t match the campaign or overall brand
- Campaigns are a poor representation of the brand’s values
- Products and services are not clearly promoted
Best practices for better marketing compliance
Now that we've covered the risks of being non-compliant, here are some of our best practices to help brands get their marketing compliance back in shape and keep it that way.
Review your marketing approval workflow. If you’re finding that Legal or Compliance are often missed in the approval workflow or are being sent approval requests at the wrong time, your marketing compliance is at risk. It might be time to do a thorough review of your approval process to see where improvements can be made. Our tips on refining your marketing approval process provides a step-by-step framework for implementing a steadfast approval process. For more information and compliance templates, you can also refer to the ACCC's Implementing a compliance program.
Get up to speed with marketing compliance and technology. Marketing compliance is always changing to keep up with the rapid-pace of technology. In particular, marketers need to stay abreast of new compliance regulations around social media and data collection. ADMA's Privacy & Marketing Compliance Course can provide the vital information you need to know your way around data management and consumer privacy. You can also request that your Legal or Compliance team update you when compliance laws change. For new staff coming on board, make sure that an overview of marketing compliance is included in their induction so that they are aware of its importance.
Adopt approval workflow software to safeguard your marketing compliance. There's a range of ways approval workflow software can safeguard both your external and internal compliance. The system has an inbuilt approval workflow management feature that enables users to customise approval pathways so that Legal or Compliance review marketing content at the right time. Not only that, it guarantees that no reviewer will ever be bypassed in the approval process again. The system also has a robust feedback feature which dispenses with email approvals, as well as it saves an automatic audit trail of marketing work. In addition, it has inbuilt digital asset management (DAM) so you can save only your most current brand assets to eliminate any confusion about which version to use.
If you don't have a Compliance Manager, it might be time to hire one. Marketing compliance sometimes slip, not because people don't care they're just busy doing a whole lot of other stuff. If marketing compliance keeps falling to the bottom of your to do list, it might be time to make a case for hiring a Compliance Manager who will be dedicated to keeping it a top priority.
View your marketing compliance from a customer perspective. While you can have all the right processes, tools and resources in place to safeguard your marketing compliance, sometimes you just need to get out of your marketing headspace and view your campaigns like a customer would. Is your messaging clear, especially content such as your terms and conditions? Are there any claims that aren't 100% true? Is there anything cited that might be problematic for a governing body like the ACCC? If you can be truly accountable for the content you create, then that’s probably a good indication it's ready for the public.
The benefits of failsafe marketing compliance
Aside from sleeping better at night, staying on top of your marketing compliance has a range of benefits:
- Avoid exorbitant fines
- Build and maintain a reputation based on trust
- Refining your approval process has other benefits such as less revisions, better quality campaigns, faster turnaround times, more cost-savings!
- Enhance your competitiveness
- Improve your profitability
- Foster good public relations
- Retain dedicated and happy staff
Best practice for marketing compliance in tightly regulated industries of marketing compliance
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