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Global DCB and VAS compliance slips in 2023, as new rules and new markets cause ripples across the sector

By 15 February 2024No Comments

Global complianace across DCB and VAS marketing took a tumble in 2023, dropping from 93% in 2022 to just 88% in 2023, according to the latest annual review from Empello.

According to its assessment of some 5 million digital journeys and more than 500,000 VAS test results during 2023, there are around 65,000 issues. The primary reason for the decrease in compliance, says the report, lies with a raft of changes to banner requirements in the Middle East and LATAM, which have resulted in significant fluctuations in the compliance rates in some countries or carriers. Over the course of this year, Empello says that it has seen an example of one carrier’s compliance falling from 83% to 8% purely due to changes in banner guidelines.

Performance varied from market to market and region to region with LATAM being the most compliant region and the Middle East region being least compliant, lagging far behind the other regions.

The level of compliance in Europe has fallen in 2023 and that is mainly driven by the results in France and Spain which drove half of all issues we found in Europe.

Download the full Empello Annual Report 2023 here

Drilling down to specific countries, Empello reports a dramatic improvement in South African compliance in 2023, rising from 63% to 87% compliance. Conversely, France has seen a fall from 98% compliant to 88%.

Fresh markets that Empello have included in its research this year include Angola and Jordan, where there are, the report’s words, “extraordinarily high levels of non- compliance”. Nigeria is also a new market for the report in 2023, but here Empello says that is “pleasantly surprised to find it at a rate of 79% compliance, which is high for a market with no formal compliance programme in this region”.

Key to achieving and maintaining high compliance rates is participation by all parties in any compliance programme, but specifically active engagement by the carriers involved, says the report.

Compliance issues unpacked

The main sources of non-compliance were content locking and misleading flows accounting for 56% of all issues found globally – which is exactly the same as in 2022. Content Locking remains the highest category versus Misleading Flow in 2023. This continues the resurgence we saw in content locking in the last quarter of 2021 throughout 2022, says Empello’s report.

Brand passing has declined further in 2023, with 2415 instances found in the past 12 months, against 3451 in 2022 and 8672 in 2021. However, this year Empello has introduced the subcategory of Impersonation of a Public Figure, in order to better capture misuse of personal identities, particularly in the Middle East, versus misuse of brand identities. This added another 473 instances.

Auto subscriptions have decreased from 941 in 2022 to 582 in 2023, but Saudi Arabia leads the pack with 219 auto-subscriptions, showing the presence of widespread and systemic payment fraud. Attempted auto subscriptions have also declined by around 30% from 940 to 668.

VAS advertising in 2023

Web advertising still accounts for 90% of campaigns Empello discovered in-market. The compliance of Facebook advertising is particularly problematic with 98% non-compliance on this channel – up from 84% in 2022 – with Instagram and Tik Tok following a similar pattern at 96% each,, up from 43% and 53% in 2022, respectively.

This year’s new entrant is X – previously known as Twitter – which, due to a lack of content moderation and controls over publishers, has shown a 100% rise in discoveries from 4712 to 9921 in 2023, with a non-compliance rate also of 96%.

According to Empello’s report: “If merchants are advertising on social media, 96 times out of 100 they will be non-compliant. Of course, that is not to say that direct buy media from Social Media channels is all bad, but affiliate networks typically use social media channels for misleading and content locking campaigns. The social media companies do have a responsibility to ensure that there are proper policies in place to prevent these practices”.

Empello goes on to identify new threats to the compliance of web advertising across 2023,  including so-called Banner Farm websites on Google Display, as well the increase in Shell Apps via the Google Play Store. These continue in 2023, leading to the introduction of a new compliance category of Misleading Placement of a Google Banner. This has been separated from the general Misleading Flow category as the merchant may have little or no control over how and where Google places its banners.

While it is disappointing to see the average level of compliance fall in the global market in 2023, there are a number of markets and carriers that continue to maintain consistently high standards, such as Vodafone UK, and many that have improved from 2022, such as the South African market, says the report.

Other markets such as Qatar and Oman have suffered from changes to banner guidelines dramatically impacting their compliance rates.

Stand out countries that are still ripe for compliance improvement are Saudi Arabia, the UAE and Egypt as they were in 2022.

Empello says: “Maintaining compliance is very much like weeding a garden. It has to be done diligently and regularly because if you let weeds get a hold whilst you are not looking, a garden can be quickly overrun which then requires a major clean up effort”.

Download the full Empello Annual Report 2023 here