Doing more with less is the name of the advertising game these days. Strict compliance and privacy laws combined with ever-changing technical restrictions limit the data companies can collect and process for marketing and advertising.
This isn’t a bad thing. Respecting customer privacy is good business, especially as younger generations take action to protect themselves. But it doesn’t make an advertiser’s job easier.
Artificial intelligence can help to fill the gaps. Platforms are introducing AI capabilities that promise greater utility with less data through features like user profiling and segmentation, identification of similar audiences for targeting, bid optimization and automated creative optimization. AI for marketing and advertising technologies is meant to help advance use cases by making connections within a data set that would be difficult or time-consuming for humans to spot on their own.
As AI eases one process, however, it creates new concerns around compliance risk and data privacy. And with more regulations like California’s recently passed AI safety bill surely coming soon, marketers need to stay on top of their ethics game.
Understanding regulations
AI systems, by their nature, are profiling consumers and conducting automated decision-making with consumer data. Consumers have the right to protect that data. Therefore, when implementing AI for marketing and advertising, companies have to consider the current privacy laws, even as regulators work to craft new AI-specific regulations, such as the recently published EU AI Act.
AI requires data to train and execute, but just because you have the data on hand doesn’t mean it’s compliant or ethical to use it for all applications. We have to consider if the purposes disclosed to consumers when the data was initially collected are sufficient to cover the use cases for which AI is being applied today.
Consider privacy laws in the United States. Many comprehensive state privacy laws include the requirement to conduct a Data Privacy Impact Assessment when processing personal data for purposes such as targeted advertising and profiling. These assessments must be conducted for any AI technologies that organizations adopt: What data is necessary? What is the outcome for consumers? What protections can we put in place to mitigate risk?
California’s AI bill – which was recently passed by state legislators and awaits Governor Gavin Newsom’s signature – adds a new layer of regulation, requiring transparency in AI-driven decisions and adherence to strict privacy standards. For marketers and advertisers, this means AI tools must not only comply with existing data laws but also meet these new requirements, or risk penalties and loss of consumer trust.
Disclosure is also particularly important. Global laws require consumers to be informed of the types of personal information an organization is collecting and what it may do with that information. Requirements for such disclosure dictate this must happen before or at the time of data collection. If AI usage was not identified in disclosures, it cannot be retroactively applied without additional notification and consent.
It’s also important to acknowledge AI is rapidly and regularly changing. The best use cases today may change tomorrow. This is in part why consumers are wary of AI, the personal data it requires and how it is used.
Putting consumers first
AI has the opportunity to revolutionize marketing and advertising by bringing efficiencies to advertisers and more personalized experiences to consumers. However, it must be done ethically.
When gauging new AI technologies in your marketing and advertising, put yourself in the consumer’s shoes. Ask yourself: “If I were the consumer, based on what has been provided to me, would I expect and be comfortable with my data being used in this way?”
The guiding principle for all marketing and advertising activities – regardless of AI use, but especially when this nascent technology is deployed – is to respect the privacy rights and expectations of consumers.
We can’t expect everyone to fully understand the nuances and legal requirements for the usage of personal data, but it is critical for everyone to be compliance-conscious.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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