Canada’s opt-in rules could change marketing as we know it

A marketer’s job is more complex than ever, thanks to our increasingly digital world. Now, the Canadian government has thrown another challenge into the mix: Canada’s Anti-Spam Law, or CASL, presumed to be the strictest marketing regulation in North America. And they won’t just affect Canadian companies.

CASL fines can be as high as $1 million for an individual violation and $10 million for businesses, and we’re starting to see the fallout. Just last month, CASL’s very first million-dollar fine was handed out to Quebec company Compu-Finder. Two weeks later, well-known companies Plentyoffish Media Inc. and Avis received fines. This is just the tip of the iceberg. Other investigations are currently underway with more fines likely imminent, signaling that companies are having major issues getting up to code. It’s time for marketers to start paying attention before it’s too late.

Under CASL, which went into effect on July 1, 2014, marketers are required to get permission before any commercial, electronic contact with customers is initiated, versus the traditional method of giving consumers a chance to opt-out of future communication. In the weeks leading up to the July effective date last year, Canadian companies scrambled to get consent from customers, but few outside of Canada seemed to bat an eyelash. The dangerous misconception is that since CASL is a Canadian law, it does not apply to those outside of the country. Nothing could be further from the truth. Any company, anywhere, marketing to Canadian residents or businesses is subject to these regulations.

What is CASL?

CASL was initially passed by the Canadian government in 2011 to deter relentless spamming of consumers and is based on an “opt-in” system as opposed to “opt-out” (i.e., click here to unsubscribe). This means the law is one of the strictest marketing laws ever and requires businesses to obtain express or implied consent before sending any commercial electronic message. That’s a lot of terminology. Here’s what it all means:

• Express consent is when a contact requests to receive marketing materials from your company through a direct opt-in (such as filling out an online form or clicking a link).
• Implied consent happens when a contact has a relationship with your business but has not directly asked to receive marketing materials.
• A commercial electronic message is any message that promotes commercial activity delivered through electronic marketing channels including email, text messaging, social media, and even instant messaging.

Clearly, CASL has the potential to deliver devastating consequences to any companies or individuals in violation, but it could also initiate an enormous shift in electronic communications across the marketing industry.

A new era of marketing

Regardless of the slew of marketing technologies at our disposal, a consumer’s email account typically has no indicators to easily determine where that consumer resides and therefore if CASL applies to marketing messages sent to him or her. Here are a few things I see playing out:

Overcompliance
Given the sheer magnitude of the fines, companies will be over-compliant out of fear, thus locking themselves out of potentially lucrative customer interactions. North American companies that send out marketing emails to both U.S. and Canadian recipients may broadly apply the Canadian opt-in standard across all email communications if they’re unable to distinguish the location of the email address, thus unnecessarily restricting communications to U.S. recipients.

Microsoft took a better-safe-than-sorry approach shortly before the law came under effect by putting an end to regular emails about security updates for its Windows operating system and other Microsoft software, laying the blame squarely on CASL. Microsoft reinstated security emails shortly thereafter, but it’s clear that the domino effect has started.

Data Segregation
Marketers will segregate any data they can to identify Canadian contact points and avoid potential violations. If Canadian contact points are separated from others, marketers can hone in on this list to make sure CASL procedures are applied in full force. The downside is that it could potentially be very time consuming and costly to keep up with quickly-changing data sets.

Opting-In Across the Board
Could other countries like the United States adopt an opt-in framework going forward because of this “better safe than sorry” mentality? It’s a real possibility. The Canadian standard may become the new standard for marketers if CASL proves to be a success for the Canadian government. Some would argue that, with fines as high as $10 million, it is only a matter of time before the U.S. Congress takes note.

For marketers conducting legitimate business, being labeled a “spammer” is like the kiss of death. Not only does this cause financial damage, but the brand can suffer irreparable harm and lose consumer trust. Many weren’t taking CASL seriously, but it’s clear now that it’s a legitimate risk.

As marketing technology continues to evolve, it’ll be interesting to see if there will be any innovations directly related to CASL compliance and how marketers can better manage Canadian marketing contact points and communication. What do you think? Has your business had any issues around CASL? Have you adjusted any processes because of this?

Jeff Fotta is President and CEO of Gryphon Networks.