AI’s privacy woes and big changes in ad spending

As always, we’ve been hard at work digesting what’s big in digital marketing and advertising, so you don’t have to. Here are some of the stories that have caught our attention this April.

What we have for you today: AI falls foul of privacy regulators, publishers push back against privacy laws, and market data suggests that the digital advertising market is undergoing significant change.

The fall of the machines

Back in February’s Spotlight, we predicted that ChatGPT, the much-hyped AI conversation app, would likely fall foul of data privacy laws. Just two months later and we’ve been proved right.

In Italy, the privacy regulator has temporarily banned the app on privacy grounds while it investigates whether it is compliant with GDPR. As we suspected, the problem lies in a potential lack of a legal basis to justify the collection and processing of personal data to fuel ChaptGPT’s algorithms. France’s Digital Minister, Jean-Noël Barrot, has also gone on the record voicing his doubts over whether ChatGPT is compliant with GDPR.

This is heartening news for privacy advocates, underscoring that respect for personal data must lie at the heart of emerging digital applications.

The publishers fight back

But if privacy regulations are placing arguably much-needed guardrails on the development of AI, in other areas some could potentially prove too onerous. In Australia a group of media companies including the Guardian, News Corp, Nine, AAP, and Free TV Australia are arguing that the country’s proposed privacy laws are “contrary to public interest and [would] result in a significant curtailing of press freedom in Australia.”

The “Right to Know” coalition, as the group calls itself, is concerned by the prospect of Australians being given the right to sue companies over perceived invasions of their privacy. The coalition worries that the law would hamstring publishers who would either have to spend time and resources facing legal battles, or self-censor to avoid litigation.

Privacy laws are essential for the modern digital world to thrive. However, this story highlights the need for complex, sophisticated regulations that can cater to the varying needs of industries and balance competing claims to the public good.

Tough times for Google

In April, Google has come under pressure on several fronts. First is the news that Mozilla has beefed up its approach to controlling third-party tracking cookies on Firefox. The company’s “Total Cookie Protection” tool, which restricts cookies to the sites on which they were created, is being rolled out as a default setting globally. Arguably, this makes Firefox the most privacy centric browser on the market, and further establishes Chrome as an outlier in allowing the use of third-party tracking cookies. Google plans to scrap cookies by 2024, and Mozilla’s move makes it imperative that it meets this deadline.

In other news, nine US states have joined a US Department of Justice lawsuit against Google which alleges it broke antitrust law in running its digital advertising business. The plaintiffs hope to force Google to sell its ad manager suite. It may not be long before the dominance of Google in the adtech space ends. As we move into a post-cookie, privacy first environment this is to be welcomed as it will open the playing field for more companies to innovate and create a new advertising ecosystem that’s better for brands, publishers, and consumers.

Age verification in the spotlight

Google isn’t the only adtech giant feeling the pressure this month. TikTok has been fined £12.7 million by the UK’s ICO for misusing children’s data. According to the ICO, personal data belonging to children under 13 was used without parental consent, and TikTok did not do enough to stop the practice.

The anonymity of the internet is often given as an excuse for not verifying the age of users. However, age verification is relatively simple to do by simply cross referencing a user with telco subscriber intelligence. This can be done using obfuscated IDs to ensure that no personal data is used in the verification process.

The changing face of the web

Finally, this month saw the publication of the IAB Internet Advertising Revenue Report. The headline news, that digital advertising delivered double-digit growth in 2022 is welcome indeed, but it’s in the details of the report that the most significant trends are to be found. First, buyers are diversifying their spending with programmatic a main beneficiary. Second, 2022 saw a decrease in the share of ad revenue among the top 10 companies, emphasizing democratisation of advertising revenue across mid-tier and long-tail publishers.

If programmatic is to continue its growth journey there needs to be a way to verify users for personalised, real-time engagement and, given that the platform giants are losing ground to mid-tier and long-tail publishers, this needs to be available on the open web. These are exciting times indeed, as market changes will fuel the race to find a privacy-first alternative to tracking cookies that will enable programmatic advertising to flourish on the whole web, and not just within the walled gardens.

More from Novatiq

Thanks for reading. If you’re looking for more stories, thoughts, and comments on all things related to digital marketing then please drop by our blog. This month, you can learn about the significant consumer experience dividend that comes with focusing on privacy, and discover the three key enablers for telco innovation.

Novatiq will be attending TelecomsWorld Middle East on 30-31 May, where our very own Tanya Field will run a panel on how telcos can help provide a privacy-first ID for the martech space. Let us know if you are attending!

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