Best Practices for Marketing Compliance in Tightly Regulated Industries
Posted by Jodie Byass on October 17, 2022
Find me on: TweetIn recent years, there has been increased emphasis on data security and consumer protection, so much so that several countries around the world have enacted laws and regulations to protect consumers against data abuse and false claims. These rules and regulations are specifically applicable to the marketing industry and, when marketing in tightly regulated industries, they are even more stringent.
This means that failing to comply with compliance rules will most likely result in steep fines. That’s not even mentioning the reputational damage that could lead to a loss of customers, and of course, income.
As part of your business’s overall compliance strategy, marketing compliance plays an important role in ensuring that your marketing, promotional, and sales content comply with the necessary regulations that are in place to protect consumers against false claims and misleading advertising.
The problem is that, when creating and implementing digital marketing strategies, you produce so much content, digital assets, and other collateral that it becomes challenging to ensure that you comply with compliance rules and regulations. As such, you’ll need a compliance strategy that simplifies this process.
In this post, we’ll look at some best practices for marketing compliance you can implement.
The State of Marketing Compliance
Before looking at these best practices in more detail, let’s first consider the state of marketing compliance in 2022. In Australia, marketing is governed by the Australian Consumer Law, which is enforced by the Australian Competition and Consumer Commission (ACCC).
This law sets out strict laws that businesses must follow when marketing their brands and products. In terms of it, businesses are prohibited from misleading consumers, either by making false claims or manipulating online reviews.
Some of the commission’s most recent decisions regarding marketing, however, relate to the use of social media and influencers. Here, some examples include actions against Runaway The Label, Tom Ford Beauty, and McDonald’s Australia, who all contravened the rules through the use of influencers. This is especially relevant as social media is an important component of any digital marketing strategy.
In addition, the Australian government released draft legislation that aims to increase the already high fines for non-compliance with the mentioned rules. In terms of the draft legislation, the maximum penalties for contraventions by companies of the rules could increase from $10 million to $50 million. Likewise, the maximum penalty applicable to individuals could increase to $2.5 million.
In the United States, the position relating to marketing regulation is no different, and marketing is regulated by Federal, State, and local laws. In the US, marketing regulations are primarily regulated by the Federal Trade Commission, and, for some industries, there are regulatory agencies that deal with marketing practices in certain industries like healthcare and finance.
As is the case with the Australian market, penalties in the US can also be severe and includes injunctions, prohibition of advertising certain products, and corrective advertising. More importantly, companies and individuals that contravene marketing rules can face fines of up to $16,000 per violation. This can add up to massive amounts. For example, the FTC recently sought a $5.5 million fine from Walmart and Kohl’s for deceptive marketing practices.
Best Practices to Maintain Marketing Compliance
Now that we have a broad overview of the state of marketing compliance, let’s look at the best practices you can implement in your marketing compliance strategy.
Involve Legal and Compliance Teams from the Outset
To ensure proper marketing compliance, it’s key that you involve your legal and compliance teams from the outset. After all, they are the experts in all things compliance. As such, you should involve them in your project approvals from the initial conception stages through digital asset creation, and finally publication.
When they’re involved in your workflows, you’ll have peace of mind knowing that every piece of content your team creates will be compliant. And, of course, when they’re involved from the beginning of the process, you’ll avoid working on digital assets that will never make it to the market.