Sad To See You Go: The Impact Of Canadian Anti-Spam Legislation On Subscriber Rates

It came as no surprise that the Canadian Anti-Spam Legislation (CASL) was going into effect. Although rumors were circulating about the new policy as early as 2010, it’s been imperative since 2012 that marketers understand how they would need to adapt — and this understanding is still prevalent today.

CASL is aimed at regulating electronic messages — email, instant message, SMS, and so on — and affects how consent is defined and collected. Any business (American, Canadian or other) that sends a message to or from Canada must follow these regulations.

Once marketers began to understand CASL, every company’s intention was to push customers to continue receiving email from their brand. Marketers took many approaches to educating subscribers about CASL:

1. The simple one-sentence caption: “The new CASL laws have required us to receive consent.”

2. Coupon incentives for in-store promotions.

3. A comical or a creative play on the brand image.

As a Canadian, I knew exactly what was happening when I received these types of emails, and the honest truth is that I didn’t give my consent for some marketers (sorry, Michael’s).

As a marketer, I understand that these strategies weren’t the most effective. The odds have been stacked against any marketer making the effort to be compliant and coax Canadian subscribers to give explicit consent, but I won’t say, “We told you so.”

So What’s The Point?

As a reminder, compliance with implied or explicit consent is one of the key components within CASL. Change is often hard to swallow for large organizations, so we at Yesmail suspected some marketers would wait to gain subscribers’ permission to send emails.

Other companies started adapting early to the legislation change through their subscription processes.

Many marketers’ tactics were as simple as having an unchecked box for customers to confirm receiving emails going forward, collecting a subscriber’s postal code, or providing a country selection in their mailing preference center. These were fast and easy ways for brands to get more information on subscribers while also protecting themselves from potential legal fines.

Despite these small changes marketers are making, they’re feeling the effects of CASL.

How Much Of An Impact Has CASL Had?

The hard truth? Without a doubt, marketers’ efforts to be CASL compliant hurt subscriber growth rates. If you have a list of Canadian subscribers, where did your brand end up in the mix of being compliant?

Unfortunately for marketers and consumers alike, spam is still a problem, even as subscriber growth is slowing down. Cloudmark’s most recent study was a real eye opener on the overall drop in Canadian spam and even legitimate email being sent.

Sadly, we haven’t seen CASL truly protect Canadians as it was initially intended just yet, considering spam email to Canadians has stayed nearly consistent.

1. 37 percent reduction in spam originating in Canada, the majority of that going to the United States

2. 29 percent reduction in all email received by Canadians, spam and legitimate

3. No significant change in the percentage of emails received by Canadians that were spam.

Using Yesmail’s reporting system, we noticed that one company experienced an 83 percent decrease in new Canadian subscribers year-over-year due to changes the anti-spam law has enforced:

1. October 2014 saw 8,166 new subscribers

2. October 2013 saw 48,311 new subscribers

In the same time frame, the marketer’s average open rate decreased 3 percent (12.2 percent compared with 11.8 percent).

As an email marketer, it’s important to understand how CASL has affected companies so far. A shrinking subscriber base is only the beginning. Failure to comply to CASL can lead to penalties and fines your company isn’t ready to pay.

What’s Next?

Compliance is an issue, but marketers are left wondering whether the Canadian Radio-television and Telecommunications Commission (CRTC) will truly enforce CASL.

What some Canadians might not realize is how much power they have to control which marketer (or spammer) takes a hit. Someone interested in sending a complaint simply needs to forward the email in question to the address easily found on the fightspam.gc.ca site.

So far, the CRTC has taken action on two major cases, and it has received over 245,000 complaints. Compu-Finder was the first publicized business to be fined $1.1 million for violating CASL on multiple levels. I think it’s fair to say the CRTC was making an example of Compu-Finder as it was found to be held responsible for 26 percent of the complaints found in the industry.

Dating site Plenty of Fish, which has over 100 million users, was the next company to receive a fine — a much more “minimal” $48,000 — for not complying with proper unsubscribe best practices. Plenty of Fish quickly changed its ways after learning it was being investigated.

The Canadian government and CRTC gave marketers a two-year window of opportunity to have users opt in and prove they’ve been given explicit consent to continue mailing. After July 1, 2016, we will likely see a new wave of fines on a more granular level.

Looking Back And Measuring CASL’s Effects

So you haven’t been fined for CASL violations and the scare has passed. Now that marketers are up to speed and understand how CASL can potentially impact their program, we urge everyone to compare year-over-year growth in Canadian subscriptions.

Some key considerations:

1. Has your Canadian database shrunk? If so, by how much?

2. What are you doing to ensure you can identify your Canadian audience in the years to come?

3. Have you seen a drop in open rates or click rates?

4. If you do have an issue with the CRTC in the future, will you have the correct data to prove your case?

5. What does the current subscription process look like for a Canadian customer?

As a marketer catering to a global audience, it’s important to understand the laws in effect in order to engage your subscriber base. It’s no longer enough to blast an email and hope it reaches an inbox. Doing so can lead to fewer subscribers and penalties.

Considering these five questions above will not only lead to subscriber-base solutions, but will motivate you to reach your global subscribers — and as a result, increase clicks.