Trying to decide whether or not to expand your email marketing programs to Europe? A brief look at the market, as well as a review of the potential legal pitfalls of operating abroad, should help answer your questions and get you on your way.
It’s no secret that Europe represents a large audience for marketers. There are currently 44 million European adults who regularly access the Internet, which is equivalent to 12 percent of the adult population and approximately 9 percent of households. All researchers agree that this figure will rise dramatically over the next few years. Morgan Stanley Dean Witter estimates that roughly 35 percent of European adults will be using the Internet by 2004, providing a market of more than 100 million potential online consumers.
This large, growing, and maturing pool of consumers has many email marketers clamoring to stake their virtual claims, but unique market and legal requirements related to email marketing must be considered before jumping in.
While the European e-commerce market is still in its infancy, consumers are quickly ramping up their online purchasing activity. According to Forrester Research, e-commerce revenues in the United Kingdom alone are expected to grow to #20 billion by 2005, from just #1.7 billion in 2000; so if there were a time for marketers to jump into email marketing abroad and make a big impact, it would be now.
As a whole, Europeans are showing interest in purchasing items in a number of categories. Approximately 80 percent of European online purchasers have acquired computer hardware and software, ranking these two categories at the top of the list of items purchased online, while books and music rank a close second with 60 to 70 percent of consumers making a purchase in these categories. Travel, electronics, and online banking rank lower among European e-commerce consumers. Unlike the United States, less than half of the Europeans on the Internet are willing to pay for goods online using a credit card — attributing their abstention primarily to privacy and fraud concerns.
Just as the commonly used adage about Rome suggests, when in Europe, understand that it’s a completely different market demographically, behaviorally, and psychographically. You’ll want to plan your email marketing strategies accordingly.
The audience to which you’ll be speaking is considerably different than the audience in the United States. Contrary to the relatively balanced gender makeup of Internet users in the United States, the European Union (EU) audience is predominantly male, at roughly 80 percent.
In addition, the high costs of Internet access in Europe drive most people to log on to the Internet from work, rather than from home. Similar to Americans, most Europeans are capable of receiving HTML email messages, but because Internet access is costly in Europe, many choose to download email and read it offline, rendering HTML emails largely unreadable. It is also clear from recent reports that many Europeans prefer their local sites and services to U.S.-based sites, so it’s essential to develop a look and feel, as well as a domain name, that reflects the values and culture of the country in which you’re operating.
Certainly, most Americans agree that privacy is a major concern, and they don’t particularly enjoy being part of mass mailings, but Europeans are even more averse to such issues. Europeans cite skepticism about how their data will be used as the number-one reason for not offering their email address to marketers; and legislators regard spam as a criminal offense, so it is imperative that email marketers foster a sense of trust with their customers and stay within the laws of each EU country.
In order to control such unsolicited email and to protect the privacy of EU citizens, the European Commission and European Parliament, representing all 15 member countries in the European Union, passed legislation in 1995 called the Data Protection Directive, a.k.a. “The Directive.” The Directive specifies how an individual’s personal data may be collected and used by marketers and imposes high hurdles for those who wish to process EU email addresses. The Directive simply places a minimum standard on the EU member nations, and it is up to the separate nations to enact and enforce their own data protection laws. The Directive requires all member nations to have enacted data protection laws; however, to date, not all member nations have done so. Therefore, compliance with the EU Directive is the starting point, but marketers must also ensure compliance with each country’s laws governing data protection and advertising practices. The key implications for marketers are that operations must be carefully scrutinized to ensure compliance with EU standards, and local legal expertise is a necessity.
While The Directive and the individual country laws are complex and must be meticulously reviewed, there are some common factors. First, as in the United States, when personal data (such as an email address) is collected and used, marketers must give complete notice to consumers regarding their practices of collection, use, storage, and disclosure of the personal data. Furthermore, in many European countries, the marketer must also file such information with that country’s data-protection office. In addition, in some countries, explicit or unambiguous consent from the consumer is required before email can be sent to that consumer. Finally, marketers must also provide consumers full access to the personal data that is collected about them, and a high level of security must be maintained to safeguard the personal data as well.
Another implication for U.S.-based marketers concerns the transferring of personal data about consumers in EU countries to countries outside the EU. Marketers that have developed a list of email addresses in a specific EU member country, such as France or Germany, can transfer that personal data outside the EU only if they have disclosed such a transfer (or “export”) to both the consumer and the government, and only if the country to which the personal data is transferred has equivalent laws protecting the personal data. Transfer of personal data between EU countries is scrutinized at a lower level, but marketers should remember that the local data-protection regime of both countries will affect the personal data.
In the United States, many of such privacy guidelines are treated as best practices that should be followed, but few are backed by strict sanctions and actual laws. In Europe, however, some violations of The Directive and individual country data protection and advertising laws are considered criminal, and offenders may face penalties and jail time. So, avoid going from .com to con!
There is a wealth of resources available to assist marketers in their expansion of email marketing efforts, and a great place to start is the European Commission itself. While the privacy hurdles can surely frustrate an email marketer hoping to quickly capitalize on the burgeoning European market, some prudent legal work is a must to get you on your way.