The Legal and Privacy Implications of AI in Marketing
Marketing procurement teams are feeling the pressure to stay on top of all of the new and exciting possibilities that are available with AI, as the technology is quickly becoming ubiquitous.
A recent Forbes article says, "The chances that there are people out there doing marketing today and not using AI in any shape or form is somewhat unlikely. This is simply because there are so many tools with AI features that we are used to using without even thinking about it."
But as marketers and procurement leaders explore the power and potential behind this new technology, they need to consider not only its incredible advantages but also the legal and privacy implications it brings. Deciding how to navigate these complex issues requires a nuanced understanding of both law and AI technology.
In this blog post, we'll explore what marketing procurement leaders need to know when tackling AI-related decisions.
Potential Legal Implications of AI in Marketing
One of the primary legal concerns related to using AI in marketing is compliance with data protection regulations. As marketers use more sophisticated tools powered by machine learning algorithms that require personal data from customers, there is a greater risk that this data could be misused or fall into the wrong hands if proper security protocols are not in place.
Companies must ensure they have compliant processes in place so they can protect customer information while still taking advantage of new technologies like AI-driven analytics and insights platforms.
Another issue marketing procurement leaders must consider is whether a service provider's use of AI will impact existing terms and conditions or other contractual obligations that may already exist. For example, if a marketing agency uses generative AI to create written content, this could create issues with an agreement that all written content created for the company be original and personalized for the company's audiences.
Similarly, if an agency uses an artificial intelligence tool to deliver personalized recommendations to customers, it's important to ensure that the customer has consented or can opt out of those recommendations under the company’s terms and conditions. AI systems may also be subject to industry-specific regulations depending on their use and context.
Finally, marketers should keep in mind that using AI technology could result in potential liability risks if they make misleading statements about the company’s capabilities, specific parties, or other issues.
Generative AI has demonstrated that it does not always tell the truth, so to speak. According to CPO Magazine, the popular GPT-3 system "is not all that great at creating reliable content after all. While the language, syntax, and general idea might be there, the accuracy of information cannot be guaranteed.”
It is essential for marketing procurement teams to thoroughly research the legal implications of any new solution they are considering before investing in it. Companies should also consult with experienced legal counsel to make sure they are aware of any potential liabilities associated with their AI programs.
Potential Privacy Implications of AI in Marketing
One of the most important considerations when using AI in marketing is understanding and addressing potential privacy implications. With the prevalence of data collection, storage, and analysis, companies must be aware of how their use of artificial intelligence could impact customer privacy rights.
As marketers leverage more sophisticated analytics tools powered by machine learning algorithms to gain insights into customer behavior, they need to ensure that customers' data is protected from misuse or falling into the wrong hands. Companies should work with legal counsel to develop compliant protocols for collecting and storing customer information securely while still taking advantage of cutting-edge technologies like AI-driven analytics platforms.
In addition, marketing procurement should consider whether their use or their partners' use of AI will affect existing terms and conditions of data governance.
According to another Forbes article, "Governance frameworks are needed to manage AI projects, tools, and teams to minimize risk and ensure compliance with various standards. Data governance, in particular, is a critical area to get right as privacy concerns mount and transparency in data collection grows in importance."
Reducing the Associated Risks of AI in Marketing Procurement
Here is a list of steps marketing procurement leaders can take to reduce the associated risks of AI in marketing:
- Research existing regulations and industry-specific laws related to AI in marketing.
- Work with legal counsel to ensure that data collection and storage practices comply with all applicable laws, including data privacy regulations.
- Ensure customers are aware of how their data is being used and can opt out of any personalized recommendations or targeted advertising powered by AI technology.
- Work with partners to develop data governance protocols that comply with all existing terms and conditions of data use.
- Perform regular audits on AI systems to ensure they are functioning as expected and there is no unauthorized access or misuse of customer information.
- Monitor the conversation around AI tools to stay abreast of any changes in regulations or consumer sentiment related to AI use.
By taking these steps, marketing procurement leaders can ensure their organization is using AI technology in a responsible and compliant manner that protects both customers and the company.
Learn More About the Future of AI in Marketing
Some thought leaders are raising the alarm about the potential risks of AI. For example, OpenAI's leaders have even asked governments to regulate AI more stringently.
However, there is still a significant amount of untapped potential for AI technology, and it could create unprecedented levels of efficiency for marketers.
To learn more about the future of AI in marketing, don’t miss the next ProcureCon Marketing event. It’s happening from November 6th through November 8th at the Hilton Tampa Downtown in Tampa, Florida.
Download the agenda and register for the event today.