John Gustavson on Privacy, E-Commerce and Other International DM Issues

TORONTO – Thinking of entering the Canadian market? There are a few things you should know before you venture north of the 49th parallel.

Like marketers around the world, CMA members are active participants in the current explosion of the Internet as an essential element of business activity. Technology has quickly – almost overwhelmingly – created innovative methods of communicating and shopping on a global scale. This creates new and unfamiliar paradigms for both marketers and consumers.

At our National Convention in Toronto in April the Canadian Marketing Association announced an aggressive new focus on raising the Association’s profile in the area of electronic marketing. We have established a dedicated electronic marketing portfolio and a standing e-marketing advisory board. Additionally, we are undertaking an Internet marketing survey to provide, for the first time, valuable Canadian information on current attitudes and use of the Internet as a marketing medium.

While Canada is similar in many ways to its southern neighbor, it is not simply “the state next door.” To take full advantage of the Canadian market, you’ll need to respect our cultural differences and take into account consumer expectations when it comes to issues such as privacy.

As you may have heard, Canada’s new era in privacy is here. On April 13, the Personal Information Protection and Electronic Documents Act received Royal Assent, the final stage in its passage through Parliament. The CMA supported this legislation since its introduction as a careful balance between the needs of martketers and consumers.

With the announcement of this new legislation, marketers need to be aware that privacy as an issue in Canada is not done. In fact, it’s just beginning.

The federal Act is set to take effect January 1, 2001. Within three years the provinces must enact their own privacy legislation, which is to be substantially similar to the federal law. Failing that, the federal legislation will come into force in the provinces. British Columbia and other provinces are already at work on their legislation. The province of Quebec already has its own privacy legislation.

The CMA is planning to work with the provinces to ensure that provincial legislation is harmonized with the federal law-to avoid the balkanization of our national marketplace.

Additionally, the new federal legislation comes up for automatic review after five years. Many privacy advocates believe that the new Act is too permissive, that it doesn’t go far enough. They will seize every opportunity to capitalize on industry mistakes and media horror stories to generate ammunition to have the Act beefed-up next time.

Accordingly, marketers in Canada need to be extremely vigilant that they not only respect the letter and spirit of the new Act, but to be sure that they are seen to be living up to its requirements.

In many ways, I feel that Canada is fortunate to have legislation based on national consensus. Taking a hard, activist line on personal privacy is popular, it’s easy, it’s media-friendly and it’s cheap-so cracking down on those who mishandle personal information is an easy and attractive political target.

Canadian marketers do not want to encourage consumers-or their advocates-to take their complaints to the national privacy commissioner or to the courts for resolution. That route is certain to be costly, lengthy and unpleasant.

To that end, the CMA, in co-operation with the national privacy commissioner, is establishing a comprehensive mediation process to ensure that Canadian consumers are satisfied in their dealings with CMA members.

What does this mean for U.S. marketers? If you have operations in Canada, your Canadian branches must comply with this law. You should also keep in mind that Canadians have already become quite wary about sharing personal information with marketers.

This law means that they will become accustomed to controlling how their information will be used and transferred. By taking into account the principles of this law, you will be more likely to forge mutually beneficial, long-term relationships with Canadian customers, and avoid errors that may cost the entire industry in the long run.

The best way to ensure that you comply with Canadian laws is to ensure that your practices are in compliance with the Canadian Marketing Association’s Code of Ethics and Standards of Practice. Visit our Web site at to pick up a copy of the Code and to learn more about the CMA. About 20 per cent of our members are U.S. companies, who join to keep abreast of Canadian issues and take advantage of education and business-building opportunities.

The Canadian Marketing Association today finds itself a strong and very positive reflection of the strength and vibrancy of the entire Canadian marketing community. To be sure, Canada’s information-based marketers are experiencing a period of very rapid change, and there are some fundamental challenges ahead. But, thanks to the advent of new technologies, creativity and innovation, our community is prospering and growing like never before.

In late April the CMA received some top-line findings from a new research study being conducted by the WEFA Group that show just how significant information-based marketing has become in Canada. The direct response marketing process generated $45 billion in total sales in 1999 throughout the economy, and WEFA projects that total value to increase to $50 billion in 2000.

In sum, the Canadian marketplace is experiencing incredible technology-driven change and growth, along with a new era of privacy legislation. The good news for U.S. marketers is that the United States continues to sell more to Canada than to any other nation. We are up here, willing to buy, if you make the effort to stay well-informed about our country’s issues, our consumer preferences and expectations.

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