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Kate Carnell requires digital advertising trade code amid complaints spike

Kate Carnell

Australian Small Business and Family Business Ombudsman Kate Carnell.

Small Business Ombudsman Kate Carnell is calling for stricter regulations for the digital marketing industry after increasing complaints from small businesses paying excessive fees for ineffective advertising services.

Carnell and other industry leaders have written to the Australian Competition and Consumers Commission (ACCC) asking them to treat unscrupulous tactics in the industry with a mandatory code similar to the Banking Code.

“We keep getting complaints that digital marketing companies are making all kinds of promises to small and medium-sized businesses and getting them to sign contracts that can last for years, and in some cases there are no benefits at all,” Carnell says.

“The good players in the industry, and there are a lot of them, think they are [an industry code] is a really good idea, ”she says.

Shoaib Mughal, founder and director of the digital agency Marketix, says more regulation is needed in the industry as most of his clients have had negative experiences with other marketing companies before using his services.

“I think better measures need to be taken,” Mughal told SmartCompany.

“There are a lot of agencies who are essentially small business scams,” he says.

Mughal often works with clients who have paid thousands of dollars in fees for unserviceable services.

“I went into customer accounts and looked at the story and I see that no work was done. No on-page work was done, no backlinks were made to a website, and they were being billed thousands of dollars a month for that, ”he says.

Mughal says it is important that any new code ensure that a party can investigate and punish marketing agencies who deliberately use predatory tactics.

“I’m not sure how to do something like this, but if there’s an agency out there that has hundreds of complaints, that’s a red flag,” he says.

The Small Business Ombudsman says a binding code of conduct could ensure that small businesses are not bound by long contracts while receiving ineffective services and include a robust grievance mechanism.

“The industry would work with ACCC, and possibly with us, to come up with code that would protect small businesses while ensuring that professionals in the industry are also adequately protected,” Carnell told SmartCompany.

“The people who hurt the charlatans more than anyone are the good professional operators in the field,” she says.

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Carnell’s call for a code comes after the ACCC published its interim report in January for the Digital Advertising Services Inquiry.

In her filing for that investigation, Carnell said her office had received multiple calls from companies struggling to resolve issues with advertising publishers, including suspended accounts and ineffective advertising products.

Carnell said these issues could be mitigated by incorporating mandatory internal and independent external dispute resolution processes into contracts between advertisers and publishers, as well as a mandatory industry code that sets standards of conduct and provides enforceable mediation and arbitration.

“We wrote to them [the ACCC] Publish this submission and suggest that once the platform request is complete, it makes sense for them to do some work in this area, ”she says.