GDPR: The Basics for Financial Marketers

As financial marketers prep for GDPR, we breakdown the must-know facts.

As the world gears up for the May 25 kick-off of the General Data Protection Regulation (GDPR), it’s becoming increasingly clear that one question remains: is anyone ready? Literally—anyone?

It’s been about a month since Facebook CEO and Founder Mark Zuckerberg sat before Congress (albeit in a booster seat) to answer legislators’ questions during two congressional hearings that dealt with issues surrounding users’ data privacy. The request came after British political consulting firm Cambridge Analytica mishandled the data of more than 87 million Facebook users through a “personality quiz” on the platform. The firm has been linked to then-candidate Donald Trump’s campaign, which has since raised questions about how political companies collect data; how the data is used; and how social media content is paid for. Oh, and the consulting firm has since filed for Chapter 7 bankruptcy.

Just days before the GDPR takes effect, Zuckerberg told European Parliament the tech giant would be fully compliant by the impending deadline. But they may be the only one.

“Very few companies are going to be 100 percent compliant on May 25,” Jason Straight, an attorney and chief privacy officer at United Lex, a company that sets up GDPR compliance programs for businesses, told The Verge. The article also sites a survey of over 1,000 companies conducted by the Ponemon Institute in April, where half of the companies said they won’t be in compliance by the deadline. When broken down by industry, 60 percent of tech companies admitted they weren’t prepared, according to the article. If you’re one of the many companies that isn’t quite sure how the GDPR could affect your business, if at all, we’ve got you covered.  Here’s everything we know about the law and how it could influence marketers, thus far:

What is GDPR?

The GDPR aims to update a set of data privacy rules that were last touched in the mid-90s and puts the power back in the hands of the consumer. The regulation includes 99 articles (available here), but a few key takeaways are as follows:

“Right to be forgotten”: This new provision gives consumers the right to ask for data about them to be removed.

Child-protection: Companies are no longer able to collect data about children under the age of 16 without parental consent.

Timely reporting: Companies are now obligated to report data breaches to both authorities and customers within 72 hours.

Who must comply with GDPR?

The GDPR are a set of data collection regulations created by the European Union but their jurisdiction touches companies globally—including those in the United States.  

“‘Even if you don’t have an office in Europe, if you’re delivering ads to Europeans, European regulators will likely expect that you are subject to GDPR,’” J. Trevor Hughes, president and CEO of the International Association of Privacy Professionals (IAPP), a nonprofit organization focused on privacy, told AdWeek.

When is GDPR D-Day?

May 25

What happens if you don’t comply?

Companies who don’t comply with the law are subject to some pretty substantial fines (and bad PR, but that’s a different conversation). Come May 25, companies will be charged 20 million euros or 4 percent of a company’s global revenue, depending on which is larger, for failure to comply.

Given that so few companies say they’ll be prepared in time, we may see these punishments play out a bit differently in reality — particularly for US companies. But the severity of the fines indicate that regulators are not messing around.

How has tech responded to GDPR?

Big brands like Facebook and Google have already moved towards compliance and consumer data protection. In addition to updating its advertising policies, Facebook is also implementing a tool that will allow consumers to control how much of their data is being collected. The company also plans to double its online security employees this year.

Similarly, Google’s created its own landing page addressing the issue and outlining how it plans to protect users’ data under the new GDPR.

These changes are hugely important, not just to us as Internet-dwellers, but as industry professionals. As marketing and PR consultants, much of our work exists on social media platforms such as Facebook, Instagram and others; or in digital mediums, such as email marketing and CRM management. We act as advertisers, content creators, data connoisseurs, and experts in audience engagement for our clients and for Vested itself; being at the forefront of policies that affect how we continue to do our work successfully is a must.

Stay tuned as we continue to explore how these policies are implemented and what it means in the future.

Bonus material! Here’s a quick guide to what’s happening with Facebook:

  1. Identity confirmation: Any advertiser running a political or “issue”-related ad will have to be verified by Facebook. If the advertiser doesn’t pass this verification, the ads will not run. Facebook doesn’t spell out what constitutes an “issue,” nor does it list which issues will be identified as such.

    People who manage large pages will also be verified through the new policy, which will “make it harder for people to run pages using fake accounts, or to grow virally and spread misinformation or divisive content,” Zuckerberg wrote.

  2. Payment transparency: Political and issue ads will also now be labeled as such and advertisers will be forced to show who’s paid for the content. For now, this feature is only be implemented in the US but will be rolled out around the world over the next few months.

  3. Multiple ad feature: Users will now be able to see all of the ads a page is running through a new tool within the platform. It’s currently being tested in Canada but will launch globally this summer, Zuckerberg wrote. Previously, users were only able to see the ad that was served to them at the time in which it was served.

The American Consumer and What’s Left of the Recovery

As seen on Investopedia.

Consumers have begun to run ahead of themselves, threatening the recovery’s durability.  Perhaps because incomes have accelerated so dramatically over the past 14-15 months, households have dispensed with their former caution and increased their spending even faster.  They have less of a relative surplus than before for savings, which have declined as a percent of after-tax income to levels not seen since 2007.  If households keep up this behavior, and it looks as though they will, the sector in not too long a time will confront a new round of debt excesses that, if not as severe as in 2008, will nonetheless require a retrenchment sufficient to precipitate a recession, perhaps as soon as 2019.

This recent behavior makes for quite a dramatic departure from the patterns maintained through much of this long recovery.  For most of the time since 2009, consumers have proceeded with extreme caution.  When their spending outpaced their income growth, they promptly slowed down, adjusted that spending back so that they could maintain historically high rates of savings.  In 2010, for example, when the recovery first gained some momentum, and savings rates fell for a while below 5 percent of after-tax incomes, consumers slowed this spending in 2011 and 2012 so that by the end of that period savings rates rose above 7 percent.  When again in 2013, spending growth outpaced of income and savings rates again fell below 5 percent, consumers pulled back so that savings rates by 2015 again rose above 6 percent.  This cautious behavior contributed to the maddeningly slow pace of the overall recovery, but also prolonged the expansion by ensuring no excesses developed that would need the kind of corrections that lead to recessions.

Last year, however, this pattern changed.  Incomes accelerated dramatically.  In 2016, overall income increased by a mere 1.6 percent, but in the 15 months since, it has grown at an annualized rate of 4.0 percent.  Similarly, employee compensation, which grew at a mere 1.1 percent in 2016, jumped at a 4.6 percent annualized rate during this most recent period.  Little of this income went to savings.  Instead, spending surged at a still faster pace so that savings rates by late 2017 fell below 2 ½ percent.  Savings rates have risen above 3 percent in the opening months of 2018, but that reflects consumer attitudes less than the one-time surge in the growth of after-tax income from the tax cuts passed late last year.  Were it not for this one-time effect, the savings rate would have remained well below 3 percent.

Households could, of course, return to their former caution.  But that seems unlikely given how things have played out since the beginning of 2017.  If as is likely, then, this more aggressive pattern of spending behavior persists, households will face debt excesses by mid-to-late 2019.  That would not lead immediately to recession.  These matters are more elastic and less mechanical than that.  They could, in fact, stretch into 2020.  But the pattern cannot go on indefinitely.  The longer it persists, the more pressure for a correction will build and the greater the likelihood of recession.  If it is impossible to pinpoint an exact date, it should be easy to conclude that this long and sometimes frustrating recovery is entering its final stage.

 

COO Ishviene Arora Named Executive of the Year

It’s been a busy March for the women of Vested. SAE Seres Lu authored a byline for Markets Media, we announced that VP Jac Gogel was named a 2017 Rising PR Star by PR News, and SAE Emma Clarke celebrated International Women’s Day by recapping women’s progress in our industry and the incredible female role models Vested attracts and employs. Leading this charge are my fellow co-founders Binna Kim and Ishviene Arora. I’m excited to announce that, this month, Ishviene was named PR Executive of the Year at the Business Intelligence Group 2018 Public Relations and Marketing Excellence Awards. Binna won the same Executive of the Year honor last year. It’s clear that these are inspiring, impressive women shaping our firm, our people, and the industry at large.

Because it wasn’t just March that was busy. 2018 is already off to an impressive start, and the last three years have been much of the same. We’ve never been the kind of company to coast; and spearheading our rapid evolution are my fearless fellow leaders.

Under Ishviene’s leadership, Vested expanded its reach to the UK and completed the acquisition of London-based Templars Communications. The agency has continued to grow at an impressive rate, attracting innovative industry talent and was recently named to PRWeek’s much-coveted Best Places to Work ranking. Ishviene’s ability to turn a vision into a reality is second to none. She is multi-faceted and equally compassionate as she is fierce. She’s an incredibly effective COO, a passionate advocate for her clients’ interests, and an engaged mentor. She cultivates excellence.

The Public Relations and Marketing Excellence Awards were launched to reward public relations agencies, departments and people whose work delivers exceptional performance and innovative approaches. Judges for this annual award looked at individuals and organizations who largely go unrecognized for helping to build great brands and products of world-class organizations.

Congratulations, Ishviene!