Consumer protection the future of mobile prize promotions

Posted: February 23, 2015

The below SMS comes from an infamous promotion that ran a few years ago and received negative publicity on a number of digital channels:

“Happy New Year you have won an inflatable bed from [Brand X]. Call ———- quote ref: 4867. Prizes excl P&P.T &C apply. Reply no 2b removed.”

Like a wrecking ball it broke a number of regulations:

  1. Consumer A called the number and was informed they had to have a credit card to receive the prize. This was not mentioned in the SMS.
  2. The “excl P&P” is not clear and no amount was mentioned which made it confusing and frustrating when winners called to claim the prize.
  3. Consumer B arrived at the store and argued having to pay the delivery charge to receive the prize. After all, they were right there.

The brand in question took steps to rectify the mistakes, but the point is they could have been easily avoided. Brand fails like this seem almost “old school” in 2015 as consumers are savvier and brands and agencies pay more attention to getting it right the first time around.

Consumer Promotion Environment

In 2015 as South African consumers we find ourselves cosily ensconced from three sides by two Acts and a Code of Conduct.

Being a Durbanite you’ll permit me the analogy: Like Shaka’s famous “Bull Horn” formation, the CPA (Consumer Protection Act) is the main force that regulates consumer promotions via explicit regulations. PoPI (Protection of Personal Information Act) acts as the “horns” wrapping consumer personal data. For good measure the WASPA (Wireless Application Service Providers Association) Code of Conduct hangs back to ensure that the carriers of the promotions maintain standards. It’s a pretty formidable team.

CPA (Consumer Protection Act)

In April 2011 promotional competitions, previously under the Lotteries Act, fell under the CPA and caused much excitement (consumers) and panic (brands). The definition of a “promotional competition” is purposefully broad and if you are giving away a prize with a value over R1 then you can count on falling under this Act.

Requirements for running a transparent and fair competition are reasonable. Section 36 of the Act is easy to read (2 pages) and a must for anyone involved in running a promotion: brand managers, campaign managers and (don’t forget!) developers.

PoPI

PoPI requires that personal information collected is protected and stored responsibly. The Act is not enforced as a regulator has yet to be appointed, but from commencement there will be a 12 month grace period to fall in line – not much time at all. Best practice is to build compliant systems now by adopting “Responsible Development” which I cover further down.

WASPA Code of Conduct

Since 2004 WASPA have laid out the framework for responsible mobile marketing, and section (18) on promotional competitions is excellent and extremely reasonable. Some key points are that a single entry must not exceed R1.50; valid entries must have the same chance of winning; closing dates must be specific (except for instant prizes of course!) and prizes awarded within 28 days unless specified. Participants also need to be made aware of the competition specifics like the entry steps, full list of rules and how winners will be chosen.

So what could the future hold for mobile prize promotions in this regulatory environment? Let’s take a bottom-up approach and start with the foundation.

Responsible Development

It would be remiss of me to not mention the importance of the technical foundation for a promotion. This should do the heavy lifting of conforming to the regulatory requirements on a technical level and it is thus imperative to upskill developers – not just brand and marketing managers. Baking this in from the “”ground up” cannot be overstated.

As an example I would like to reference an article that covers three core tools for developers to use when taking PoPI into account:
1. Adopt a privacy-by-design approach
2. Perform Privacy Impact Assessments
3. Create an easy and understandable Privacy Policy

These tools are relevant for promotional competitions and need to be considered to negate costly developmental changes down the line. The full article can be read here: http://mmasa.org/index.do?PageID=6553&PN=1&IX=46859&Sel=1&SelID=120937

Data Management with Omni-Channel Consumers

The opportunity is here to give consumers a range of mobile channels to engage through, particularly in South Africa where we have a diversity of mobile phone capabilities.

Channels include Mobi, App, SMS Short Codes, IVR, USSD, Mxit and WeChat. The latter 5 might be “leased” by a brand or agency but they have simple interfaces for developers – meaning that a central database of consumer information can be maintained irrespective of the mobile channel used for engagement.

Mobile channels will come and go and are a means to an end – they simply facilitate engagement. Going back to Responsible Development, this allows developers to maintain a single core of regulatory business logic while exposing promotions through multiple channels.

Consumer protection breeds creativity

I consider the regulatory environment a huge opportunity for brands as it creates an even playing field or framework. This inspires creativity – to the advantage of consumers. Static SMS competitions have become passé with creative and beneficial engagement triumphing:

  1. Omni-Channel Engagement: Experiment with mobile channels and analyse the results to see which work best for different goals and audiences. Remember the diverse landscape of mobile phones in South Africa.
  2. Instant gratification: Build in instant rewards on these channels in the form of airtime, vouchers and coupons. Track redemption rates and adjust as necessary.
  3. Adopt a move away from analogical planning of campaigns which can restrict creativity. Break down to core goals and insights – then work up from there to allow for innovative ideas which are critical in differentiating campaigns.

In 2015 brands can see the regulatory environment for consumer promotions as an opportunity to differentiate through responsible development and data management by offering creative and valuable engagement across multiple mobile channels.

Resources

“WASPA Code of Conduct 31.1”. Wireless Application Service Providers Association. August 2014.
“Protection of Personal Information Act”. Government Gazette. 26 November 2013.
“Consumer Protection Act”. Government Gazette. 29 April 2009.
“Useful tools for mobile application developers and their clients.” MMA, Philip van Tonder. 2014

Written by Alan Haarhoff (Advisory Board member: MMA South Africa)