Doing more with less is the motto of advertising these days. Strict compliance and privacy laws, coupled with ever-changing technical restrictions, limit the data that companies can collect and process for marketing and advertising purposes.
This is not a bad thing. Respecting customer privacy is good business practice, especially since the younger generations take steps to protect themselves. But that doesn’t make advertisers’ jobs any easier.
Artificial intelligence can help fill these gaps. Platforms are introducing AI capabilities that promise greater utility with less data through features like user profiling and segmentation, identifying lookalike audiences for targeting, bid optimization, and automated creative optimization. AI for marketing and advertising technology is expected 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.
However, while AI makes one process easier, it creates new concerns about compliance risk and data privacy. And with more regulations like AI Safety Bill Recently Passed in California Soon, marketers will have to stay on top of their ethics.
Understanding the regulations
AI systems, by their nature, profile consumers and make automated decisions based on consumer data. Consumers have a right to protect this data. Therefore, when implementing AI for marketing and advertising, companies must be mindful of current privacy laws, even as regulators work to develop new AI-specific regulations, such as the recently published law European AI law.
AI needs data to train and run, but just because you have data doesn’t mean its use is compliant or ethical for all applications. We need to ask ourselves whether the purposes disclosed to consumers when the data is 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 a requirement to conduct a privacy impact assessment when processing personal data for purposes such as targeted advertising and profiling. These assessments must be conducted for all AI technologies adopted by organizations: What data is needed? What is the outcome for consumers? What protections can we put in place to mitigate the risks?
California’s AI bill, recently passed by state lawmakers and awaiting Governor Gavin Newsom’s signature, adds a new layer of regulation, requiring transparency of AI 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 that consumers be informed about the types of personal information an organization collects and what it may do with that information. The requirements for such disclosure state that this must occur before or at the time the data is collected. If the use of AI has not been identified in the disclosures, it cannot be applied retroactively without additional notification and consent.
It’s also important to recognize that AI is evolving rapidly and steadily. Today’s best use cases may change tomorrow. That’s part of why consumers are suspicious of AIthe personal data it needs and how it is used.
Putting consumers first
AI has the potential to revolutionize marketing and advertising by improving the effectiveness of advertisers and delivering more personalized experiences to consumers. However, it must be done ethically.
When evaluating new AI technologies in your marketing and advertising campaigns, put yourself in the consumer’s shoes. Ask yourself, “If I were the consumer, based on what I was provided with, 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 the use of AI, but especially when this emerging technology is deployed – is to respect consumers’ privacy rights and expectations.
We can’t expect everyone to fully understand the nuances and legal requirements surrounding the use of personal data, but it’s essential that everyone is conscious of compliance.
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