Month: August 2014

The UK DMA has warned advertising mail suppliers to financial services businesses and charities that they could be sitting on a ‘VAT timebomb’ following HMRC’s two-year delay in issuing guidance on how it will impose VAT rules for the channel.

The industry has been left in the lurch since April 2012, when HMRC announced that it had stripped bulk mail of its VAT-exempt status. Since then, many advertising mail suppliers have used the practice of ‘single sourcing’ – combining postage costs with production costs – for cutting out the VAT liabilities for financial services businesses and charities, which are unable to claim back or charge VAT.

In April 2012, the DMA alerted the industry to HMRC’s change of VAT rules for bulk and issued its own guidance, which highlighted the potential dangers of single sourcing for advertising mail suppliers.

For the past two years the DMA has been calling on HMRC to issue clear guidance on whether it will exempt single-sourced advertising mail from VAT charges. The DMA is now concerned that supplier businesses that were advised to interpret the rules in this way could now be hit with large back-dated VAT bills, as well as penalties.

Mike Lordan, the UK DMA’s director of external affairs, said HMRC’s lack of communication could put many advertising mail suppliers out of business: “Thanks to HMRC taking an unacceptable length of time to respond to our request for clarification, many businesses now could be sitting on a huge VAT timebomb.

“While we’ve advised businesses to take a cautious approach, the ambiguity surrounding the rules means that many businesses have interpreted the rules differently. Until now, HMRC has not issued guidance to the contrary. HMRC created this vacuum so it would be extremely unfair for them now to penalise companies.”

Jonathan Harman, managing director, MarketReach, added: “It is important HMRC and the wider mail industry work together to do everything possible to bolster this vital sector. Royal Mail would be concerned about any further increase in mailing costs for charities and other businesses that are unable to recover VAT. Direct contracts for postal services between charities or financial services companies and Royal Mail are unaffected – including Downstream Access contracts which continue to be exempt from VAT.” 

The DMA now will lobby the Treasury and the Department for Business, Innovation and Skills to prevent HMRC from imposing backdated VAT charges and penalty fines for businesses while the industry was waiting for guidance.

The DMA is urging its members concerned about the impact of HMRC’s guidance on their advertising mail business to contact the DMA’s VAT helpdesk.

The UK marketing and advertising sector speaks with a middle-aged, male voice, new research has revealed.

A study conducted by PH Media Group found the most popular voice used by agencies is male and aged between 35 and 45. It is also friendly, clear and distinctive in tone, helping to reinforce a sense of accommodating service and authority.

The male voice is generally perceived by customers as authoritative and professional, so can work particularly well for business-to-business organisations.

But audio branding specialist PH Media Group advises firms to choose branding that suits their specific company values and claims a female voice may be equally as effective.

Dan Lafferty (pictured), head of voice and music at PH Media Group, said: “An older, deeper, masculine voice  can be used to convey a sense of authority, especially when combined with corporate music,.

“This is important in portraying a sense of knowledge, professionalism and standing to business customers.

“But that doesn’t mean it will necessarily be the best fit across the board and companies should use a voice which best reflects their products, customer base and service proposition. A feminine voice can be equally authoritative but is also perceived as soothing and welcoming, reinforcing an ethos of dedicated service.”

The research audited marketing and advertising agencies’ on-hold marketing – the messages heard by callers when they are put on hold or transferred – to reveal which voice and music is most widely used.

The most popular music tracks were purposeful and confident in style, designed to reinforce the energetic and creative nature of the industry.

Many firms opt to use popular music tracks but, due to existing emotional associations, these tracks are often unsuitable in convincing a customer to buy.

“Sound is a powerful emotional sense,” added Lafferty. “People will often attach feelings, both positive and negative, to a piece of commercial music, which will be recalled upon hearing it.

“Placing a piece of commercial music in an on-hold situation, no matter how cheery and upbeat it may seem, is a lottery of the individual’s previous experience of the track. Using commercial music is also a square peg, round hole scenario, taking a piece of music and trying to make it fit a new purpose to convey a message it was never intended to.

“A bespoke music track starts from the ground up, with each element forming or reflecting the brand proposition, and with there being no previous exposure among the client base. The physical attributes of the track – whether major, minor, fast, slow, loud or quiet – are used to communicate emotional meaning, rather than the personal experience of the individual.”

New UK industry code promotes ‘responsibility above and beyond compliance’ to address customer concerns, says DMA

Adopting the UK DMA’s new code of practice will be central to the industry’s efforts to address customer concerns about one-to-one marketing such as data sharing, according to the trade body’s executive director Chris Combemale.

Speaking at the launch of the new DMA Code, which covers all data-driven marketing activity, Combemale said it will change the industry’s mindset: “We’ve taken a new approach to self-regulation that recognises the need to focus on principles that go above and beyond compliance with the law. It’s perfectly easy to follow all of the details of regulation and yet fail to meet the expectations of the customer, such as how you use their data.

“Our Code centres on five principles to inspire the industry to serve each customer with fairness and respect. Marketing with customers not at them is imperative to fostering trust and achieving commercial success.”

The DMA is now encouraging other businesses to adopt the code, which comes into force next Monday, August 18.

According to Combemale, failure to do so will come at a cost to UK plc: “The hero principle of ‘putting your customer first’ demonstrates the evolution of our industry. Each marketer and organisation should see one-to-one marketing as an exchange of value between its business looking to prosper and its customer looking to benefit.

“Data fuels the digital economy, so earning customer trust is a commercial imperative. Brands must make every effort to ensure that they always collect and use consumers’ data in ways that they expect and benefit from.”

The DMA developed the Code after an 18-month consultation process with industry stakeholders, including practitioners as well as government regulators Ofcom and the Information Commissioner’s Office. The Ministry of Justice and Department of Culture, Media and Sport also provided input.

The DMA Code will be enforced by the UK industry’s independent watchdog, the DM Commission.

The DMA Code is backed by a series of channel-specific ‘guides’, which cover recommended best practice and compliance with regulations.

More than 1,050 corporate members of the UK DMA, which includes the industry’s top agencies, adhere to the DMA Code as a condition of membership.

The UK DMA Code and guides are available via the DMA’s website.

Demand for marketing professionals is increasing both on a quarterly and yearly basis, according to fresh statistics from one of the UK’s leading professional specialist recruiters.

Figures from the Robert Walters UK Jobs Index, which charts vacancy numbers posted to online platforms, confirm that the level of marketing vacancies expanded both year-on-year (up 8%) and between the first two quarters of 2014 (up 6%), together indicating a steady increase in employer demand.

Organisations in and around the Midlands have been the most active recruiters, generating nearly 15% more roles in the year since the second quarter of 2013.

The flow of marketing jobs is also strong in the capital, where the Jobs Index recorded a year-on-year increase of 8%.

Tim Gilbert, director of Marketing Recruitment at Robert Walters UK, said: “The Jobs Index results reflect rising investment and an appetite to hire as businesses seek to achieve new levels of growth. Echoing this trend is the rising number of marketing professionals attracting multiple job offers, underscoring the need for efficient recruitment processes to secure preferred candidates.

“While many employers have embraced the digital revolution, up-skilling staff or making new hires, the flow of digital marketing vacancies shows no sign of abating. Among discerning employers, the focus will be on recruiting for highly specialist or niche digital marketing roles to build up fresh layers of expertise.

“Furthermore, for many businesses, quality remains key, with many turning to experienced advisers or consultants to access marketers with the necessary skills or experience.”