PIPEDA deadline puts spotlight on marketing practices

TORONTO — The final implementation of Canada’s privacy law will put a spotlight on business practices that may reflect badly on some brands, executives told a recent Canadian Marketing Association conference.

The private sector has less than 100 days to comply with the Personal Information

Protection and Electronic Documents Act (PIPEDA), which experts at the conference called a watershed moment in the history of marketing. Though it was introduced in 2001, PIPEDA will only come into full effect on Jan. 1, 2004.

With that in mind, the Canadian Marketing Association will update its self-regulating guidelines with a clause about making it easier for customers to opt out of mailing lists, said CMA president John Gustavson. The clause is designed to show the marketing industry is being proactive in responding to the public’s privacy concerns. “”Our goal is not to turn you all into lawyers,”” he said.

John Wright, senior vice-president of the Air Miles reward program at The Loyalty Group, said in a keynote speech that marketing executives should play a “”quarterback”” role in shaping the development of improved privacy policies. “”It ties into brand reputation, not just compliance,”” he said. “”We may to move away from seeing it as a legal initiative and more as a marketing imperative.””

Though PIPEDA requires all firms to appoint a chief privacy officer, Wright said this tends to “”departmentalize”” the issue and leads other groups to assume it’s not their problem. Instead, he advocated the development of a “”culture of privacy”” that can increase customers’ trust.

Wright admitted that the Privacy Commissioner of Canada had received complaints in the past from special interest groups who claimed Air Miles wasn’t doing enough to protect the personal information of the 14.5 million Canadians who actively collect points. The road to compliance, he said, included a nine-month privacy audit in which the company went through all necessary IT systems and filing cabinets.

“”If a customer asks, you will have 90 days to hand all the information you have on that customer. This is not only all the information you have collected, but all the information you generated,”” he said. “”Even that stuff that gets keyed in at the call centre that shows that customer to be a bit of a pain.””

The ability to opt out might be as important as offering up existing client information, added Don Lange, senior vice-president at The Cornerstone Group of Companies. The problem is that there are still wildly different interpretations of PIPEDA that make the implications for mailing list owners difficult to understand, he said (Cornerstone manages lists for the IT Business Group).

“”We’ve always had do-not-call/promote lists,”” Lange said, noting that most list brokers follow the CMA code first introduced 10 years ago, “”but there was sometimes a philosophy of hiding it, where sometimes you’d find (the opt-out information) in mouse type at the back of the magazine.””

In contrast, Lange showed a copy of Canadian Geographic, which includes its full privacy policy and opt-out information on its table of contents. The Internet has to a great extent changed marketing, he added, because for the first time many lists are put together in which there is no real relationship between a list owner and the list user. There is a difference, for example, between someone who has subscribed to a magazine and someone who has merely clicked on a Web page. Computers also require more management, which changes the nature of how customers perceive mailings.

“”Their computer, their desktop, is considered personal space, and they’re concerned when they get something,”” Lange said.

In general, customers are satisfied if the channels for opting out are clear, experts told the conference. Wright said Air Miles has had less than one per cent opt out since improving its communication. Lange agreed, arguing that the industry needs to do a better job of policing itself.

“”Government does not understand the list business,”” he said. “”(Privacy regulation) is something that sounds good on the floor of the House of Commons but in the real world has all kinds of complications.””

Comment: pipeline@itbusiness.ca

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