Marketer reviewing ads for marketing compliance violations

27 October 2023

Compliance plays an indispensable role in any marketing campaign. They act as the final checkpoint before your promotional material goes live, ensuring it meets all regulatory requirements.

What does this involve? The Compliance team’s role is multifaceted, ranging from ensuring that email marketing campaigns have secured the necessary consumer consent, in line with data and privacy policies, to vetting messaging across multiple websites for alignment with industry and brand guidelines.

Failing to meet these compliance standards poses severe risks, especially in highly regulated industries. In short, both the Marketing and Compliance teams must work diligently to guarantee the brand’s safety.

Why is Marketing Compliance Important?

At its core, marketing compliance serves dual functions: It shields consumers from misleading information and safeguards the brand from financial and reputational fallout. In a digital age that has exponentially multiplied the types of content and channels, the stakes have never been higher. Regulatory bodies are intensifying their scrutiny, continually issuing new guidelines that significantly impact how marketers communicate with their audience.

Our joint study with Arlington Research offers unprecedented insight into the relationship between Marketing and Compliance teams across sectors including banking, asset management, and insurance in the U.S., U.K., and Australia. The survey, which included over 550 professionals, revealed telling trends:

  • 35% of Compliance and Legal professionals cite an overwhelming amount of content to review as a pressing challenge.
  • 30% express concerns over a lack of understanding about the financial and reputational risks of non-compliance within the organization.
  • Concerns extend to emerging platforms, with 20% uneasy that new marketing channels like social media lack comprehensive regulatory guidelines.
  • 89% believe that training sessions for the Marketing team could alleviate these issues, and 82% think the core problem lies in Marketing’s limited grasp of complex compliance rules.

Moreover, the volume of flagged risks can increase the need for additional revisions,  lengthening the time required for content approval. Companies finding it challenging to keep up with content velocity, brand, and regulatory compliance can face expensive setbacks. 

Reviewing marketing materials traditionally falls on the shoulders of Compliance and Legal teams who conduct rigorous reviews of marketing assets — a collaboration crucial for timely campaign launches. But one-third of these professionals wish for automated tools that would streamline the standard checking of disclaimers, sources, and terms and conditions.

Despite their vast resources and expertise, some of the most profitable companies in the world are still grappling with the complexities of compliance, underlining the urgency for more robust solutions, such as Amazon settling a $2 million false advertising dispute in March 2021 over the use of ‘reference pricing’, amidst claims it was misleading and lacked transparency.

 

The Three Pillars of Marketing Compliance

Now that we’ve explored the what and the why, let’s go through the core tenets that make up marketing compliance: Data privacy and protection, transparency and consent, and truthful advertising.

Data Protection and Data Privacy

Collecting and handling customer data responsibly is integral. The brand’s reputation and compliance risk hinge on how well data management aligns with existing regulatory requirements with hefty penalties for instances of non-compliance.

Transparency and Consent

Proper consent for marketing activities stands as another essential aspect of compliance. From email marketing campaigns to customer surveys, this pillar ensures a lawful and ethical approach to consumer engagement.

Truthful Advertising

Marketing compliance review serves as the gatekeeper of truthful messaging, ensuring that the content stands up to regulatory scrutiny and brand guidelines. Failure to adhere to truthful advertising standards can result in financial penalties, legal challenges, and a damaging loss of consumer trust.

The ripple effect of a misleading claim is an overwhelming consideration. But more than a blow to the bottom line, missteps in consumer communications can erase the goodwill meticulously crafted over a long period. Additionally, it can reroute budget, strategic planning and reallocate resources toward crisis management … The cumulative impact is seismic.

Navigating Challenges and Best Practices

As we’ve established, ensuring compliance while balancing creativity and crafting compelling messaging that resonates with target audiences can present a unique set of challenges for marketers, but staying up to date with continual shifts in regulation is a challenge in itself. A 2023 hiring and employment survey spotlighted the issue: Despite robust hiring and salary incentives, 61% of Compliance leaders in highly regulated sectors said they struggle to adapt to rapid regulatory shifts. While companies scramble to staff their Compliance teams amidst increasing regulatory scrutiny, the talent pool remains narrow. About 93% of legal departments cite difficulties in hiring skilled compliance professionals.

Our research also uncovered several other aspects of marketing compliance that were problematic.

The Elephant in the Room: Outdated Processes

One core issue that emerged is outdated internal processes. Marketing, Compliance, and Legal teams often operate in silos, reacting to challenges rather than proactively solving them. This is aggravated by a palpable strain in interdepartmental relationships that stem from inefficiencies in the process. For instance, 28% of Marketers view their relationship with Compliance/Legal teams as a primary obstacle during marketing compliance reviews.

Complicating this, 50% of respondents still use spreadsheets and email to manage the marketing compliance review process, it is clear that technology isn’t being utilized to streamline this operation. The result is a tangible strain in interdepartmental relationships, exacerbated by an “us versus them” mentality. In fact, over 80% from both sides concur with this sentiment, illustrating urgency to overhaul outdated practices and opt for a solution-based approach.

The Opportunity: Unified Processes and Technological Leverage

Ironically, agreement on solutions were found to be more aligned than the challenges. There’s concurrence across roles and sectors on how to improve the status quo. Our research reveals that 79% of Marketing and 81% of Compliance/Legal professionals desire faster, more objective review processes. Both parties see potential in artificial intelligence (AI); 95% of Marketers and 93% of Compliance professionals could envisage leveraging AI to streamline their workflow.

From Compliance Gap to Competitive Edge

Companies should be viewing compliance as a powerful differentiator in the marketplace. When compliance is seamlessly integrated into your marketing strategy, you create a synergy that adds layers of trust and credibility to your brand. Additionally, as regulations evolve, companies with a well-established compliance culture are better positioned to adapt, reducing downtime and accelerating go-to-market strategies.

Deloitte amplifies this sentiment, “Successful companies will be those that can sustain their compliance talent pipeline to meet the increasing demand for, and changing nature of, compliance skills.”

Embracing the Future: Trends and Innovations in Marketing Compliance

Intelligent technology has opened up a world of possibilities for Marketing and Compliance professionals to work more closely together and achieve compliance accuracy on a consistent basis when undergoing any marketing project.  Automation and AI can provide organizations with functionality that allows them to proactively address content risk and manage reviewing large volumes of marketing.

Features like automated document and website scanning provide real-time feedback against industry-specific regulatory requirements so marketers can create compliant content faster and compliance professionals can enjoy a streamlined review process. Sophisticated marketing compliance software should also offer integrations with project and content creation applications so users can benefit from seamless, interconnected workflows.

Marketing compliance technology that aligns processes between teams is also of particular interest to the pharma industry, as a way to not only maintain a high level of compliance but also, retain talent, illustrated by Susan Garfield, Principal, Commercial Lead, Health Sciences and Wellness Sector, EY, “In many cases, companies are trying to solve for throughput and speed of approving content, in other cases there is the challenge of finding good medico-legal reviews and how to leverage these scarce resources effectively and efficiently. That is a different thing to solve for, making the system more pleasant to be a part of so these professionals want to stay and do this job”.

The drive for more objective and efficient review processes is consistent across both departments. Our data shows that 81% of Marketers and 89% of Compliance/Legal professionals favor review methods that are less biased and more objective. This impartiality is even more essential considering that 20% of each group feels misunderstood by the other. In this setting, AI adds not only efficiency but also an invaluable layer of neutrality that human processes can lack. The ultimate aim being to create an environment where ensuring compliance is seen as a significant contributor to brand integrity and consumer trust, not an afterthought.

Make Marketing Compliance a Breeze With Red Marker

Red Marker’s AI-powered regulatory marketing compliance software has the full-stack capabilities needed to overcome the regulatory challenges of today and beyond. 30 times faster than manual review, marketing, legal and compliance teams can scale the creation and approval of content while ensuring the highest level of compliance.

Built on bespoke risk detection unique to your business needs, Red Marker uses automation and AI to scan text and images instantly for potential regulatory and brand risk.

Offering visibility over branded and promotional content, Red Marker’s powerful website scanning and monitoring capabilities analyze hundreds of domains for critical brand and compliance elements. Red Marker’s API supports integrations with 3rd party tools like Adobe Workfront, Aprimo, Asana, Figma, Google Docs, Microsoft Word and more, to streamline content and legal review processes for marketing, and compliance alike.

To remain competitive, cost-efficient, and productive, companies need a solution that offers more than just risk protection. Discover what to look for when considering a software solution for marketing compliance by downloading our free guide, “A Buyer’s Guide to Marketing Compliance“, or schedule a consultation to see how Red Marker unlocks advanced compliance capabilities and achieves better regulatory outcomes.

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