The U.S. Federal Communications Commission voted 4-1 today to close the “lead generation loophole”.
The ruling makes it much harder to send marketing texts. It does so by extending many of the same protections of the Do Not Call registry to mobile numbers. This will require carriers to block texts sent to numbers that are red-flagged by the FCC.
The FCC says that today’s ruling is designed to “further protect consumers from scam communications by directly addressing some of the biggest vulnerabilities in America’s robotext defenses.”
The FCC says the ruling closes a loophole that had allowed “unscrupulous robocallers and robotexters inundate consumers with unwanted and illegal robocalls and robotexts.”
Today’s ruling ups the ante on consumer consent for lead generators. The agency says it is making it “unequivocally clear that comparison shopping websites and lead generators must obtain consumer consent to receive robocalls and robotexts one seller at a time,” the agency said today in announcing the ruling. “Rather than have a single consent apply to multiple telemarketers at once.”
Ep. 35 Asks if Automation is the Answer with Evocalize’s Matthew Marx
Bad for SMBs?
Not all are celebrating the FCC ruling. Some local digital players are concerned the decision could make life harder for some small business operators. In particular, those who rely on third-party lead generators.
One such voice is Matthew Marx, CEO of Evocalize, a technology firm that offers digital marketing services to local businesses.
Yesterday, Marx posted an article on LinkedIn arguing that the then-anticipated ruling could, in his words, “dramatically reshape the lead generation landscape, particularly affecting comparison-shopping websites and the small businesses and franchise systems that depend on them for leads to fuel their growth.”
Today we reached out to Marx to ask him how he expects the ruling will shake out for Evocalize’s clients. He said the ruling is no surprise, given the FCC issued a draft memo in November that suggested the direction it would be taking.
“Many small businesses rely directly or indirectly on leads purchased through comparison shopping websites and industry portals,” Marx told Localogy Insider.
He offered a fairly common critique of regulation. And that is that it threatened to increase the cost of doing business, often for those that can ill afford it.
“It’s easier, in some cases, to do so than investing in their own lead generation programs. We believe these lead aggregators are likely to adjust their practices to continue post-enforcement operations. It’s a broad consensus at this point that the cost of the leads they sell will go up and the number of leads available will fall.”
Time to Engage and Innovate
Marx does not see the FCC ruling in a single light. He believes there will likely be both winners and losers as a result of the ruling.
“We think this change will be a big challenge for some small businesses that drove their businesses largely via lead aggregators. But we think it will help the rest,” Marx said.
“This could be a significant enough change to lower overall media spend on lead generation. [This] may lower the cost per lead that SMBs get via direct marketing efforts. If businesses haven’t invested in direct lead generation and nurturing people or technology, they’re now on the clock to do so.”
He said Evocalize will advise its clients to adapt by mixing up their approach to engaging with clients.
“We recommend that our clients begin diversifying their lead generation strategies. Including enhancing their online presence and engaging more directly with potential customers through digital media and content marketing,” Marx said.
“Consumers don’t like getting overwhelmed with unwanted calls and texts. And we think this ruling is a step in the right direction for consumers. We also think it will benefit direct business connections one-to-one with consumers as we begin to rebuild trust. The FCC’s closure of the lead generation loophole marks a new chapter in digital marketing. The currency will be innovation and direct engagement rather than reliance on third-party leads.”
