Will the payday loans furore make more accountable marketers of us?
Payday loans have been making news headlines of late and the Competition Commission is now investigating the market on a number of points to prevent “irresponsible lending” to the vulnerable and the poor. As the Office of Fair Trading (OFT) says, some of the business models “appear predicated on making loans which are unaffordable”.
It’s a safe bet that the marketing tactics of payday loan providers are going to come under more scrutiny – particularly the audience targeting and the use of daytime television advertising. It has already been raised by the media that who else watches daytime TV but the unemployed, the old, the housebound and the part time worker?
The initial OFT investigation of 50 payday company websites examined marketing and highlighted the fact that 30 of them “emphasised the easy availability of credit and the speed of arrangement”. The OFT also identified problems with advertising by high-street lenders and the use of television slots.
The concerns over these services force the marketing sector and wider society to once more tackle that most challenging of questions in a free market – if a product or service is legal then why should its marketing be circumscribed? Tight regulatory frameworks that have been developed so far are related to health issues (think tobacco and alcohol) or are age-related (think gambling or adult material from films to games). Few regulations apply to a certain sector of society based on their socio-demographic standing.
One side of the argument might run: “So does this mean we shouldn’t then advertise expensive white goods, luxury cars, four star hotels or even premium own-brand food ranges via any medium that might be majority-watched by a vulnerable demographic?” Of course, it would be a waste of money to do so from a targeting point of view – but as marketers shouldn’t you reserve the right to do so on principle?
Or are we now in the more enlightened age of brands wanting to “do good”? As Keith Weed, Unilever’s chief marketing officer, has said repeatedly, most recently at the ISBA annual lunch last week, brands should not just be socially responsible but “socially accountable”.
There are no easy answers and the sharp splits in opinion can be detected in, for instance, Newcastle United taking Wonga’s sponsorship while Bolton Wanderers rejects QuickQuid’s cash. But now that football is the game of the middle classes maybe that isn’t such an issue…
It will be interesting to see how much those involved in the payday loan sector protest and what arguments they deploy if or when they find any further restrictions beyond the existing laws applied to their marketing.