ACMA: New code to crack down on telco ads, save billions in ‘bill shock’

Buzzwords used by telcos such as ‘unlimited’ and ‘capped’ plans which are often misunderstood by consumers will be cracked down on in a new mandatory code introduced to protect consumers.

The Telecommunications Consumer Protection Code, set to come into effect in September, will force telcos to be literal with the words used in their advertising, along with complying to a range of other regulations aimed at protecting consumers from issues such as ‘bill shock’, confusing mobile plans and poor complaints handling.

The code is being introduced following the Reconnecting the Customer public inquiry conducted by the Australian Communications and Media Authority (ACMA) which estimated annual costs of $1.5 billion associated with consumers choosing the wrong plan, $108 million for the costs of telephone complaints and $113 million for the costs of writing off bad debts.

ACMA Chairman, Chris Chapman says the new code should give rise to a much needed, much improved, customer experience. “The code is a unique and ground-breaking document by world standards, bringing together best practice protections at all of the touch points in the telco customer lifecycle,” he says.

Previously the industry was regulated under a voluntary code. The results of ACMA’s inquiry found that better advertising practices, more effective information for consumers, tools to avoid bill shock, streamlined complaints handling, a customer care reporting framework and changes to the Telecommunications Industry Ombudsman (TIO) scheme were required.

Telcos will have to tell customers when they’re about to breach their ‘caps’, which in the future will be defined as ‘hard caps’ to clarify that if a plan is capped at a certain price the customer will never pay more than that capped amount.

Similarly, the term unlimited will really have to mean unlimited, with shaping and additional charges not part of the fine print.

“The code comes against the background of the rollout of the NBN and is a good example of forward-looking and evidence-based engagement in a converged world,” Chapman adds.

The new code was developed by the Communications Alliance, which formed an independently chaired steering group comprising industry and consumer representatives, the Australian Competition and Consumer Commission,  and the Department of Broadband, Communications and the Digital Economy.

Virgin punished for spamming

Virgin Mobile Australia has been slapped with a $22,000 fine by the Australian Communications and Media Authority (ACMA) for allegedly spamming consumers.

The telco was accused of sending promotional emails to consumers who had opted out of receiving material.

“The key tenet of the Spam Act is that commercial electronic messages cannot be sent without the consent of the recipient. An organisation must respect a person’s desire not to receive commercial electronic messages, even if it is just to ask if they have changed their mind,” said ACMA chairman, Chris Chapman.

In conceding to ACMA’s cliams, Virgin Mobile will pay $22,000 and develop what it refers to as ‘comprehensive training programs, quality assurance processes and an auditing regime’.

The text of the message included: ‘When you joined us you asked not to receive any promotional material. We totally respect that decision and you can remain promo-free as long as you like. To make sure you’re still certain about this choice, we just wanted to quickly show you some examples of recent offers that we’ve sent to customers…’

Wireless internet use increasing says ACMA report

The Australian Communications and Media Authority (ACMA) has released its communications report, revealing that wireless broadband services usage has skyrocketed during the past year to reach more than two million subscribers.

According to the ACMA report, services jumped 162% in 2008-09, likely due to the popularity of smartphones such as the iPhone, while fixed-line telephone services dropped 3%.

Australians continued to purchase mobile phones in increasing numbers, with the number growing 9.5% to more than 24 million – the number of fixed-line services dropped to 10.7 million.

The number of internet subscribers surged to 8.4 million, up from 7.2 million the previous year, with wireless broadband subscribers accounting for 25% of those subscribers.

However, the report may turn out to be a thorn in the Rudd Government’s national broadband network, which is aimed at providing high-speed internet to users on a fixed-line network, with an article in The Australian indicating some analysts predict that future internet users could place more importance on mobility than speed.

“The view is that fixed line is still the primary technology for delivering video and for working from home. While it might have gone through a period of stagnation, we do anticipate it will pick up when new products like video-on-demand are made available,” explained Sameer Chopra, telecommunications analyst for Deutsche Bank.

“We see the potential for the two to co-exist, with households and individuals using both simultaneously.”

Email declining due to poor quality

Experian CheetahMail has released a report that indicates email marketing is not getting to the correct segments, with open and click rates for campaigns declining worldwide as email recipients struggle to consume the increasing volume of emails they receive, many of which are irrelevant.

The report entitled Five new failings of email marketing with best practice solutions, revealed that unique open rates have declined from 21% at the start of 2006, down to 15% in the year ended 2008.

However, the report hinted there was also hope – it indicated that the volume of email marketing messages is expected to reach 838 billion in 2013 in the US and the Australian Communications and Media Authority researched Australians and confirmed that email is the most popular online activity by a ‘significant margin’.

Experian CheetahMail was honoured in Forrester Researchs ‘Forrester Wave: Email Marketing Service Providers’ report for Q4 2009, which evaluated 15 email marketing services providers (ESPs) based on current offering, strategy and market presence, and rated the top performers in the field.

The report indicated that despite there being many chances for marketers to win big online, the report indicates that there are many missed opportunities to enhance the quality and therefore results of email marketing.

“Email marketing will progressively fail if marketers continue to have a poor appreciation of the critical need to make communications relevant and timely. From design through to deliverability, marketers must adopt a best practice approach if they are to maintain the benefits of email marketing in the long term. The tips in this paper are designed to be a starting point to migrate email marketing communications to the next level,” explained the report.

eDM – Avoid Spam Filtering

Following the findings of the Australian Communications and Media Authority’s (ACMA) annual report, Experian offers Marketingmag.com.au readers some top tips on how to avoid having your emails spam filtered.

One of the major findings of the report was a 21% increase in email spam over the last year. The ACMA received 2,955 complaints in relation to email spam for 2008-09.

John Merakovsky, director of Experian CheetahMail Australia New Zealand, told Marketingmag.com.au his top five tips for avoiding this category:

  1. Manage sender reputation:

    ISPs use a range of variables to allocate IPs with a sender score, which is then used to judge the legitimacy of emails. Until marketers fully understand their sender reputation, it is difficult to know what needs to be done to improve email delivery rates. Are you mailing too often? Not removing your unsubscribes frequently enough? Do you have a poor email infrastructure? Are your bounce rates too high? Reputation management systems are available for marketers to help identify their sender score and manage their relationships with ISPs.
  2. Have a dedicated domain from which you send your email campaigns:

    People decide if something is spam just by looking at the email address the message is sent from. Use your company brand in your ‘From Address’ to make it recognisable and don’t send from noreply@companyx.com or donotreply@companyz.com. Encourage subscribers to add you to their address book. Also, ensure the domain (everything after the @ symbol) is actually the one the email is being sent from (otherwise you’re email spoofing and you’ll get blocked).
  3. Subject line is critical:
    
Four out of five people don’t open marketing emails and a key factor in this is the subject line. If you send a high volume of emails, it’s a good idea to do a test email to 10% of your database using two different subject lines. Find out which one generates the highest open rates and go with that one for the rest of the campaign. It’s also important to be direct about what you’re offering in the subject line. For example, say upfront that you’re having a 20% off sale so people know what your email is about, but be sure to keep the length of the subject line short.
  4. Manage images and content: 

    Avoid too many images in emails as this increases the chance of getting caught in spam filters. Use call-to-action-links to drive subscribers to additional content. Remember the email itself is just the teaser to drive web traffic and, ultimately, sales. Also ensure a balance in image to text ratio. This will help with deliverability and enable recipients who don’t have access to images the chance to understand email content.
  5. Make it easy for recipients to unsubscribe: 

    Marketers need to ensure they manage their email distribution lists, making it easy for people to unsubscribe and be removed from the list. This will help control complaints, which may include consumers simply hitting the spam button, even if they signed up to your email communications in the first place. The number of complaints made against a particular IP will impact on emails from this address making it through the spam filter.

“With the adoption of email marketing continuing to rapidly increase, marketers are facing an uphill struggle to be noticed in an over crowded inbox. The results from the ACMA prove the increasing abuse of emails by illegitimate organisations and fraudsters. They also show the growing challenge marketers are facing to differentiate their legitimate and authorised email content from spammers,” said Merakovsky.

AFA calls for evidence in advertising ban

The Advertising Federation of Australia (AFA) has responded to regulatory proposals tabled by the Federal Government’s National Preventative Health Taskforce (PHT).

The AFA expressed concerns that the timing of the proposals would impact employment.

“Our membership and our industry partners are particularly worried that the PHT proposals, if implemented, would also have a severely negative impact on Australian jobs at a time when the fragile recovery of the economy is so crucial,” said Belinda Rowe, national chairman of the AFA.

The AFA pointed to an independent Australian Communications and Media Authority (ACMA) study that determined there was no scientific causal link between advertising and childhood obesity.

Mark Champion, executive director of the AFA, said the AFA was happy to offer the Government support to arrive at a conclusion backed by firm evidence, as the PHT report does not contain that evidence.

“There is no justification for throwing out the code of self-regulation, which the industry has worked very hard to arrive at, before it’s been given any meaningful chance to show that it’s actually faster and more effective in addressing the issues than badly conceived, blanket advertising bans,” Champion said.

The PHT report proposes tough new rules for advertising food on TV and alcohol companies’ sponsorship of sport.

Commercial Radio Australia responds to ACMA inquiry

The Australian Communications and Media Authority (ACMA) has announced an inquiry into Commercial Radio Australia.

Joan Warner, CEO of Commercial Radio Australia, said the industry would make a submission to the inquiry but was disappointed the ACMA felt an inquiry into all 261 radio stations was necessary given the complaints came from a single station in a single market.

“We are also disappointed that ACMA has chosen not to wait for the codes complaints and investigative processes into this particular incident to be completed before launching this broader enquiry, said Warner. “ACMA’s own attitudinal research shows that only one in five radio listeners have heard something of concern in the last 12 months and the majority of these were concerned about news stories.”

The inquiry follows a segment on Kyle and Jackie O’s show during which a 14-year-old was hooked to a lie-detector and questioned about her sexual experiences by her mother and the show hosts. The segment received 137 complaints.

The ACMA said the stunt highlighted broader issues about treatment of subjects involved in prank calls, competitions and challenges on commercial radio.

Ten breached rules with subliminal ads

So that crazy guy with the tin foil hat that sits at the tram stop was right – corporations are using subliminal messages to control our brains!

Network Ten has been chastised by the Australian Communications and Media Authority (ACMA) for broadcasting material below or near the threshold of normal awareness during the 2007 ARIA Awards.

Several complaints were received by the ACMA at the time about the inclusion of brief displays of sponsor’s logos during the nomination segments of the program.

ACMA slowed the footage to analyse it frame by frame and found that the rapid-cut graphics used in the program was a technique that was attempting to convey information to viewers ‘below or near the threshold of normal awareness’ – a breach of clause 1.8.4 of the broadcasting code.

Ten is now expected to distribute the report to its production staff (both in-house and external) and to not use the same rapid cut use of sponsor logos again.

While it may seem like only a rap on knuckles, the ACMA considers its action as proportionate, since it’s the first breach of this kind and the network will not use this technique in the upcoming 2008 ARIA Music Awards… that we know of.

Digital radio switch-on set for 2009

For those waiting with bated breath for digital radio to start, the industry announced today that the national ‘switch-on’ will take place on 1 May 2009, following a resolution of infrastructure issues relating to the rollout of transmission equipment.

Commercial Radio Australia and ABC Radio believe the introduction of digital radio in Australia will be successful depending on an integrated rollout with both public and commercial broadcasters switching on simultaneously in the five mainland capital cities.

“Given we have timeline infrastructure issues in a number of the launch cities and after consultation with the commercial sector, the industry has made a united decision to officially launch digital radio to listeners on 1 May 2009 in all markets,” says Sue Howard, director of ABC Radio.

Joan Warner, CEO of Commercial Radio Australia, maintains that the digital radio rollout in Australia was planned from the onset to be released nation-wide, with the first five markets in the capital cities to be launched simultaneously.

Warner says the timeline issues had arisen as a result of collaborative work being done on a second draft of the Digital Radio Channel Plans (DRCPs) developed by the Australian Communications and Media Authority (ACMA), which won’t be finalised until December 2008.

“The infrastructure build of an entirely new broadcast technology is a complex one. We are committed to ensuring that we get it right from day one. Transmission networks last a very long time,” Warner says.

“In addition, the radio industry is briefing all stakeholders on the new brand and logo for digital radio on Thursday 11 September in Sydney and on Friday 12 September in Melbourne.”

Free to air digital radio will potentially allow broadcasters to provide additional audio channels, superior quality sound, pause and rewind facilities, plus a new visual aspect to radio with the introduction of scrolling news, sport and weather text and the ability to transmit a picture of a radio host or band, the cover of a CD or an animated logo on screen.

For marketers, the release of digital radio will create new challenges and force the industry to re-evaluate how to reach consumers through this medium. This is radio 2.0 people – thinking caps on!

Profiles help marketers use radio to target desired audience

The Commercial Radio Market Profiles have been released to stations and advertisers nationwide and will provide an invaluable reference tool for advertising on radio. There are over 100 detailed market profiles of regional and metropolitan commercial radio areas.

Collated every five years, the Commercial Radio Market Profiles provide details on individual radio markets throughout Australia including all the commercial stations in the area and various demographic breakdowns. These include age, labour force details, income brackets of listeners in the area as well as an area profile of main industries, plus employment and educational qualifications of the workforce.

Chief executive officer of Commercial Radio Australia, Joan Warner,
said the profiles have been designed to help radio stations,
advertising agencies, media agency buyers and planners better
understand the markets commercial radio stations serve.

These detailed market profiles are designed to provide advertisers
with a better understanding of the markets, the size, specific
demographic breakdown and the opportunities available, particularly for
regional radio, where easy access to this type of information is not
always available, Ms Warner said.

The profiles will assist with the planning of effective ad
campaigns for specific local areas across both regional and
metropolitan Australia. Commercial radio stations are an integral part
of the local communities that they serve. These profiles will help make
that relationship even more relevant.

The commercial radio licence area profiles have been collated using a range of official data sources, including the latest Australian Bureau of Statistics (ABS) Census of 2006, and are based on radio licence areas determined by the Australian Communications and Media Authority (ACMA). They include the main metropolitan city markets throughout Australia as well as regional radio licence areas.