Compliance

How has GDPR affected email marketing?

By Chris Hyde, Vice President of Technical Operations, Validity

Despite two years of warning and preparation time, when GDPR came into force in May 2018, many email marketers across Europe were still worrying about how they could possibly still operate under the tighter regulations.  

A common concern was their long cherished and valuable email lists. GDPR enforces a requirement for subscribers to opt into email marketing correspondence. If they do not, the assumption is that they opt-out. For many marketers, this meant chopping away at sizeable email lists built up over many years and effectively starting from scratch.

At the time, many were nervous that their marketing programmes were going to be severely set back at the hands of GDPR. However, research by the Data and Marketing Association (DMA) tells a different story of how marketers have embraced the regulatory change. According to the DMA, after only a year since GDPR’s introduction, we have seen email marketing initiatives interestingly receive a host of benefits.

As other countries and regions across the world are following in Europe’s footsteps by adopting versions of their own data protection regulations – such as California’s Consumer Privacy Act (CCPA) which became effective 1st January 2020 and Brazil’s Lei Geral de Proteção de Dados (LGPD) which is due to come into effect in August 2020 – now seems like the perfect time to look at the ways GDPR has impacted email marketing initiatives for the better, if only to put the minds of email marketers outside the EU at ease.

The ‘halo’ effect of GDPR

Getting down to the nitty gritty of what marketers’ first feared, the DMA’s Marketer Email Tracker report found that there was an uplift against all major KPIs as most marketers experienced increased deliverability (67% of respondents), open rates (74%), click-through rates (75%) and conversion rates (67%). Clearly for email marketers then, there has in fact been a GDPR halo effect.

Conversely, the negative metrics that marketers wish to avoid have reduced. The same DMA study found that opt-outs and spam complaints were down by 41% and 55% respectively. This is hugely important as improved deliverability and lower complaints means companies have an in-built advantage when it comes to getting in front of their consumers.

The halo effect here is that although email marketers’ lists were reduced post-GDPR, the tighter regulation acted as the perfect opportunity for marketers to properly cleanse their lists. The mandatory opt-in feature meant that all the inactive subscribers who were not engaging with any correspondence anyway were removed and only those who were engaged with the company or the brand were left behind.

‘Quality over quantity’ is very much the mantra here as pre-GDPR, email marketers valued their long lists, whereas now, they are seeing the value from their smaller but more refined lists and are incentivised to work harder so that their lists are not impacted further by the dreaded unsubscribe button.

 ‘Slow and steady’ not always the best way

While most of us learned from our school days that ‘slow and steady’ is the better strategy, this was not the case regarding GDPR compliance. Marketers who dragged their feet with adjusting their plans to comply with the new rules may have lost out.

According to Yieldify’s research, companies who quickly achieved full GDPR compliance were the ones that saw the biggest benefits against their key metrics. Participation in loyalty programmes were up, targeting was improved and online purchasing increased.

Softer benefits were also seen such as better consumer ratings, better customer satisfaction, and increased levels of trust, which are all important drivers of purchase decisions for consumers in a world where social validation is highly valued.

Marketo’s report also backs this up, as they classified marketers as “legal first” or “marketing first” based on the approach they had taken to achieve compliance. The latter had embraced GDPR to build stronger, more effective relationships with their customers, and were 72% more likely to exceed their business objectives as result. These improved metrics are all big wins and an excellent example of how GDPR has not hindered marketing efforts but improved them instead.

Retail quickest to adapt post-GDPR

There are many reasons why we often read reports on how the high streets are failing in favour of online shopping, but perhaps one of these reasons may be down to how well retail marketers have done to better their email campaigns in a post-GDPR era.

Retail was one of the biggest sectors to quickly adapt to the new regulations, and Yieldify’s research also found that it was one of the best performing sectors in driving database growth, reaching 101% of its pre-GDPR database size.

One of the most effective tactics listed by Yieldify to driving this re-growth was the encouragement of account registration or an opt-in button at checkout. This tactic is not necessarily exclusive to retail and can be applied to any conversation where a transaction is involved – a positive effect for email marketers within other sectors to gain from.

Changing attitudes towards giving and using personal data

An important learning curve that we have witnessed since GDPR has been how consumers view their personal data. Consumers are far more aware of their data rights which has seen complaints to the ICO triple since May 2018. This fact urges every email marketer to ensure they comply as they not only have to fear a harsh fine, but also reputational damage.

People understand the power their data holds for businesses, which may not necessarily be a bad thing. The DMA Consumer Attitudes to Privacy report found that 53% of consumers are “Pragmatists”, which means they are only happy to share their personal data if they feel they will get a fair exchange of value in return.

However, the value to consumers does not always have to be sales heavy and enticing them to buy a product or a service. What came across loud and clear when GDPR entered the scene was that consumers do not want to be sold to all the time – they also like to be informed.

As a result of this, we are seeing more emails where the focus is on providing news, inspiration or value statements. For example, marketers are going down the route of becoming more like newsletters whereby they also provide consumers with tips, advice, and news snippets that matter to their industry.

How email marketers are using data has not necessarily seen a whirlwind change, but a new default has certainly been established. Consent is now more robust, expectations better set, and more choice is being provided. As a result, levels of trust have increased, and consumers are providing better-quality data about themselves.

This better-quality data allows marketers to be more successful when targeting consumers which naturally results in more engagement, and in turn, more transactions. I bet a lot of marketers did not see this coming when GDPR was first introduced.

What can email marketers across the world learn from GDPR?

Following the success of Europe’s new data protection regulations, other countries around the globe are gearing up to roll out versions of their own. Brazil is only months away from its LGPD data protection legislation coming into effect in August 2020 and although there are subtle differences, it is nearly a carbon copy of GDPR itself.

The land down under is also learning from GDPR as Australia is currently processing legislation to strengthen its own data privacy laws. While Brazilian and Australian marketers may be a little nervous about the implications for their customer databases, they should take heart from Europe where many marketing programmes are showing big performance uplifts.

Whether marketers were unhappy with changing their methods due to GDPR is now irrelevant as the after-effect has seen email marketers be resilient as they found ways to adapt and emerge with email marketing campaigns that are better than before.

Any marketer who may be anxious about adjusting to new regulations in their regions can look to Europe as an excellent example of those who adapted well and are now leading the way for others in email marketing best practice post-GDPR.

About the author

Chris Hyde is Vice President of Technical Operations, Validity. Chris has 25 years’ experience in Pre-Sales, Product Specialist and Customer Success roles, both as an individual contributor, as well as in building and managing International teams. His specialities include Data Quality and Governance, Business Process Management, Identity Management, Services Orientated Architecture, Cloud Computing, SaaS and CRM.

About Validity

Validity is a trusted name in customer data quality. For nearly 20 years, tens of thousands of organisations have relied on Validity solutions – including DemandTools, DupeBlocker, PeopleImport, Brite Verify and Trust Assessments – to manage their customer data. These solutions deliver smarter campaigns, more qualified leads, more productive sales, and ultimately faster growth.