Canada Introduces New Anti-Spam Legislation (CASL); Creates Increased Costs for Marketers

Exact Data CEO discusses Canadian Anti-Spam Legislation (CASL), which takes effect July 1, 2014

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The new Act may cause other unexpected consequences, such as cross-border shopping to increase, lower sales for Canadian retailers, fewer jobs, fewer taxes collected, etc.

Chicago, Illinois (PRWEB) April 04, 2014

Canada's new anti-spam law was passed in December 2010 and, following a Governor in Council order, it will go into effect on July 1, 2014. The CASL effectively outlaws client acquisition by email (not-for-profits and politicians excepted). This does not stop client acquisition, but it does mean marketers will be forced to use other, less cost-effective marketing channels such as direct mail. Direct marketers use email to both retain and acquire new clients - both are vital to the success of any business.

The Canadian Anti-Spam Legislation website posts that the new Act will, "help to protect Canadians while ensuring that businesses can continue to compete in the global marketplace," but does not mention the increased costs the law creates.

Postage for standard mail in Canada (called "Admail") averages $0.45 per recipient. Add another $0.10 for printing and personalization, and the total cost in the mail is about $0.55 per solicitation. The average cost of a targeted email solicitation in Canada (when it was legal), was approximately $0.06 per email.

The cost to acquire a new client significantly impacts the cost a business charges it customers for its products or services. In the acquisition examples above, if the conversion rate was 1%, the cost for postal vs. email would be $55 vs $6 per new client. To maintain the same level of profitability, in this case, the increased marketing cost would necessarily be passed on to the consumer.

"The new Act may cause other unexpected consequences, such as cross-border shopping to increase, lower sales for Canadian retailers, fewer jobs, fewer taxes collected, etc," states Larry Organ, Exact Data CEO.

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