The Effect of the General Data Protection Regulation (GDPR) on the Sponsorship Industry

The Effect of the General Data Protection Regulation (GDPR) on the Sponsorship Industry

As a business that relies on its ability to approach companies, brands, and more specifically Marketing Directors, for sponsorship opportunities, last Thursday’s ESA event at the Telegraph was compelling listening. It also presented a number of potential challenges to the future of the sponsorship industry. There were signs of surprise from fellow attendees about the rulings being floated and there was no doubt, people were questioning how they were going to approach the challenges of the industry post May 2018, when the new GDPR guidelines come into effect.

Speakers

●   Chris Ritchie, COO of Sine Qua Non (agency)

●   Piers Clayden, Director of Clayden Law (lawyers)

●   Abeed Janmohamed, Commercial Advisor for InfoSaaS (compliance tools)

The long and short of it is, we are going to have to be a lot more careful about the way we treat data. How we collect it, the way we use it, and only using it how we said we would. For me, the largest impact is likely to be around how we go about selling sponsorship without using the large database communication numbers that we currently include in most sales pitches as an important benefit for partners. In reality it sounds like sponsor brands aren’t going to be able to communicate to a rightholder’s data unless they have had clear individual consent (Not third party, generic opt in / opt out terms) from the consumer for that brand’s specific communication.

The Rightsholder

Let’s just say for example, a football club has 4m people on their database. This database has been collected through ticket sales, merchandise sales, consumer promotions, online data collection etc. The opt in / opt out at the time was likely generic and open ended when it comes to sponsor communication “by clicking here you accept communication from 3rd parties or Commercial Partners”.

Based on the discussion, A Marketer’s Perspective – Exploring the impact of GDPR and privacy on the sponsorship and communication industry at the Telegraph Media Group, this isn’t specific enough. Each new partner on board is going to have to be cleared (a qualifying email to the database with a secondary opt in for communication from that brand about a specific topic) through the database before they can start communicating openly to the audience. I know from experience that when you start doing that, your numbers are going to drop significantly – and in turn, the potential value of the sponsorship.

Over the last seven years, I have worked at a brand, agency and global rightsholder. In each of these businesses the importance of data was huge. If we activated a campaign, the measurement was often engagement, data collected and sales processed. We sold sponsorship on our ability to sell the brands products or services to our audience. The bigger the audience number (or potential to communicate / engage), the bigger the value… does the GDPR now mean that will all change?

The Sponsorship Sales Agency

That’s just part of the challenge for us as a business, the other bit, is how we are going to contact businesses to sell them sponsorship. Initially I understood under The Privacy and Electronic Communications Regulations (PECR), that this wouldn’t be a problem as it was more lax for B2B communication. However, it turns out the guidelines between B2B and B2C are merging. So by May 2018, we are going to have to be very clear on how we communicate to other businesses. First off, is our database of Commercial and Marketing Directors something of the past? We have done deals with individuals across all sorts of businesses but as with any industry, people move on, contacts change. If I can only contact people I know, who are happy to pick up the phone, only the biggest agencies will survive. Big agencies will always have people who know friends of friends, people who used to work with someone who knows someone and a direct line in. Do we have to get approval before we contact a specific business or can we continue to call using the “Legitimate Interest” line?

Legitimate interest – The fall back line – if you believe the other person benefits from the contact and use of the data then there is a “legitimate interest”. This one feels fluffy….The example given was a PR agency calling media outlets. There is no way a journalist can expect to know about every story and so has to rely on people contacting them. It is in the journalists legitimate interest for cold call communication with PR companies and organisations to uncover stories. I am hoping sponsorship opportunities fall under the same line.

 I am pretty sure there won’t be many Marketing Directors who openly sign up to being targeted for unsolicited sponsorship proposals. So are we now going to rely on a Commercial Director actively seeking an opportunity? How will smaller or new events get awareness or traction?

There will be those among you who hate cold calls, hate unsolicited emails, and can’t wait for the guidelines to come into effect but I would call for caution. There are a huge number of industries that rely on their ability to contact businesses or individuals without asking permission first. There is a scale between hindrance and help but our industry (and some of the events we work with) exist because we make deals, most of which originated from a cold or slightly warm lead. Sponsorship done well is a huge asset to a business.

What became clear is that the boundaries are not finite. There are some grey areas and ambiguous sounding rulings;

●   Double opt in – Collecting data and then clarifying the ability to use it for specific objectives will become the norm.

●   Erasure (the complete removal from a database) may not be the most efficient way of getting out of communication. Erasure is completely deleting a contact. There’s nothing stopping you reappearing on the contact list. Opting out but staying on the data list may make more sense.

●   Buying data, is this going to be a thing of the past? There is no way a business can show they have consent to communicate to individuals about specific topics based on bought data lists.

●   Advertising and generic communication (non-specific, not tailored to an individual) is not going to be affected

●   “Refer a friend” marketing will not be allowed, as consent from that friend wasn’t gained. I’m sure there are a lot more like this example.

Next steps:

With all that said, the recommendation was clear. You have 6 months to clean up your data and ensure you have the correct privacy policies and the correct consent in place. Don’t communicate with people if you are not sure you have their permission. Be cautious. A fine for improper use could be as much as 4% of turnover – a deterrent that shouldn’t be taken lightly.

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Stuart Richmond
Stuart Richmond
stuart@regandco.com

Stuart has a wealth of experience working across rightsholders and agencies with some of the world’s biggest brands. At Chelsea FC, Stuart managed the Adidas, Audi and Samsung relationships, building global coaching programs to over 20 countries, as well as managing the 3 weeks, 1st team tour to Asia for club partners.

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