The first session hosted by the SCL Junior Lawyer’s Group was ‘A Beginner’s Guide to the Digital Marketplace’. The seminar was held at Bird & Bird LLP and chaired by Kate Bernstein of Bird & Bird and Cecilie-Louise Justesen of Telefonica.
The intention of the seminar, aimed at trainees and lawyers at the start of their careers, was to explore areas including digital advertising, data protection and the technological trends that drive a typical digital business. The speakers present to deliver their thoughts were (i) Jatinder Bahra, Digital & Data Protection Counsel at Richemont, (ii) Sacha Wilson and Hannah Crowther, associates at Bristows LLP and (iii) Tim Abraham, Director of Data Platforms at Adbrain.
The first presentation was delivered by Jatinder Bahra of Richemont. It explored the differences between online and offline sales and the steps that retail brands are taking to engage with their customers using the latest technologies. Jatinder explained that the traditional view was that the luxury shopping experience did not extend well online, which is reflected in the fact that 90% of luxury product sales still take place in retail stores. Although fewer than half of Richemont’s brands (or ‘maisons’) are e-commerce enabled, one of their maisons, Net-a-Porter, is perhaps the best example of a fully online luxury retailer.
Jatinder explained that customers are increasingly electing to research products online, rather than in-store, before making a final purchasing decision. As a result of this, it is important for luxury retailers to engage customers online in order to re-kindle the luxury experience that they would encounter in one of the traditional boutique stores. This could be achieved through landing page personalisation, geo-located mobile ads and the re-targeting of traditional online advertising. It was also possible to track and act on ‘trigger-moments’, so that, for example, information that an individual had updated their LinkedIn profile with details of a recent job promotion could act as a trigger to display relevant targeted advertisements.
Jatinder then provided further detail on how the use of new technology is revolutionising the retail industry. In addition to wearables being a new category of fashion accessory, they also provide a means of tracking consumers. By combining this information with ‘Big Data’, retailers can create new opportunities for targeting consumers. For example, upon passing a retail store a customer may receive a message on their phone notifying them that an item they viewed online is available in stock. This trend of connecting online and offline retail experiences, so called ‘omni-channel’, is increasingly being used in the industry.
Jatinder highlighted the potentially negative response from customers to practices they might view as overly invasive, the so called ‘creep factor’. Given the increasingly sophisticated means by which customers can be tracked, it was important for retailers to carefully consider customer preference in deciding whether to offer new retail experiences.
Jatinder concluded her presentation with a few key take-away points. She reiterated that personalised shopping was the future, with retailers using ‘omni-channel’ data collection to offer a bespoke customer experience both online and offline. She stressed the need for retailers to overcome the ‘creep factor’ in exploring these new retail opportunities and warned of the need to deal with the legal challenges that stemmed from the use of these new technologies.
Hannah Crowther and Sacha Wilson‘s presentation dealt with the legal aspects of online marketing and digital advertising. Hannah started by explaining that the core primary legislation covering the collection and use of personal data was the Data Protection Act 1998, albeit this was soon to be replaced by the European General Data Protection Regulation (GDPR). The principles set out in the DPA provide that personal data must be processed fairly and lawfully, shall be obtained only for one or more relevant purposes and shall be adequate, relevant and not excessive. In addition to the DPA, the Privacy and Electronic Communications Regulations 2003 provide rules on consent for electronic marketing and, amongst other things, cover the use of cookies for the targeting of advertisements.
Hannah explained that organisations should collect only the information they need and should ensure that any data collection is proportionate since, under existing legislation, it is not possible for an individual to consent to disproportionate data collection. In considering whether an individual had given valid consent to data collection, it was important to look at whether the individual had a genuine choice. Hannah emphasised that it was important to make clear what the data will be used for, both in a privacy policy and in a data collection notice.
Following the collection of data, organisations should seek to aggregate data if possible, thereby partially or fully anonymising it. It was important to remember that specific consent should be obtained for marketing through different channels, including email, text and automated calls. In terms of email marketing, Hannah explained that PECR covered direct marketing only. Regulation 22 of PECR provided that no unsolicited email marketing should be sent without prior consent, however there was a ‘soft opt-in’ if an individual’s details were obtained in the course of a sale as long as the marketing was for similar products or services and an opt-out was given when the details were collected, and in every subsequent message. Hannah noted that common issues in this area related to the intra-group sharing of data and questions over what constituted a similar product or service.
Sacha explained that in the UK, marketers were subject to a self-regulating regime overseen by the Advertising Standards Authority. The ASA operates according to two primary codes; the CAP code, covering non-broadcasting (including online) activity, and the BCAP code covering broadcasting activity. In general, the ASA operates a light-touch regime with enforcement typically taking the form of rulings which often result in negative publicity for a marketer. If a marketer remains non-compliant, the ASA can work with publishers to withhold advertising space and, in extreme cases, may refer a marketer to trading standards or apply for an enforcement order.
Sacha highlighted the growing trend for native advertising in vlogs and noted that although the legal issues involving advertising in vlogs had received media attention in recent months, the principles guiding this were well established. It is a fundamental principle that editorial content should be separate from advertising content. Sacha referred to the relevant passages from the CAP code, including that marketing communications must be obviously identifiable as such (Rule 2.1) and that marketers and publishers must make clear that editorials are marketing communications; for example, by heading them ‘advertisement feature’ (Rule 2.4).
The need for clarity on the part of the marketer was highlighted by the ASA’s decision against Mondelez UK regarding several YouTube videos from vloggers, all of which featured Oreo biscuits (the so called ‘Lick Race’ Challenge). The ASA found that, although the videos included the wording ‘thanks to Oreo’, this was not sufficient to make clear it was an advertisement. Rather, from the outset, the video should have stated that it was a paid advertisement. Sacha emphasised that it was important for brands to ensure that endorsement deals give appropriate approval rights and ensure appropriate disclosure obligations.
The final presentation was given by Tim Abraham of Adbrain, who gave an overview of the digital marketing industry and the current trends in this rapidly evolving sector. Tim explained that digital marketing sought to overcome the downsides of conventional mass media advertising (known as ‘Above The Line’ advertising), by allowing advertisers to deliver the right advertisement, at the right time for the right person. This role of ad-targeting was performed by digital marketing intermediaries, operating between the advertisers / agencies and media owners.
Tim explained that ‘AdTech’ is the name for the specialised infrastructure and applications that sit between advertisers and media owners, with the goal of ensuring users get more from their content. There are three core use cases, namely tracking, profiling and RTB (‘real-time bidding’). Tracking is the simplest technology and uses cookies or device IDs to allow marketers to measure the efficacy of digital advertising. Profiling uses knowledge about a user to deliver more appropriate advertising content. For example, it is possible to display adverts based on that user’s previous brand interaction or based on models of predicted behaviour. Finally, RTB, the most sophisticated approach, uses programmatic techniques to match ads to users in real-time (ie the ad is selected whilst the page loads). In this model, a media buyer can automatically evaluate each opportunity before deciding which advertisement to show and how much they want to pay to show it.
Tim’s final section dealt with the legal challenges that the increased use of programmatic advertising is likely to have on the digital marketing industry. Advertisers have to deal with how to collect, process, enrich and distribute digital assets whilst simultaneously respecting end-user privacy and satisfying regulators. Tim suggested that the industry had a responsibility to monetise content appropriately, otherwise authorities would respond with greater regulation. In his view this was likely to lead to market rationalisation by large media incumbents which would be detrimental to consumers in the long term. He suggested that the industry had to educate users, both to create ‘reasonable expectations’ for use and to inform them about the valuable content that was available because of ad-funding. It was also important that the industry provided transparency and control over personal data and did not use controversial techniques to merge non-personal data in order to create personal data.
David Egan is a Trainee Solicitor at Bird & Bird LLP.
