Marketers still won’t go to ethics, despite potential hit

office1Customer satisfaction is now seen by marketers as their number one priority but they are only willing to go so far to achieve it, with only half of all professionals willing to go beyond regulatory requirements to adopt more ethical practices for their customers.

So says a new study carried out by Forrester Consulting on behalf of digital marketing agency Precis Digital, timed to coincide with the looming fourth anniversary of GDPR implementation.

It finds that four-fifths (80%) of marketers rank customer satisfaction as the number one most important outcome for their marketing programmes, yet only 49% indicate that they would go beyond GDPR.

According to the report, marketing ethics is a high priority in many marketing departments with more than two-thirds (67%) of respondents stating that the strategy helps to achieve the dual objective of building customers’ trust and driving long-term performance.

More than three-quarters (76%) go as far as to say that they are making marketing ethics a high or critical priority for their organisation.

Even so, the study also shows marketers struggle to do what it takes to live up to their own ethical ambitions.
As the marketing industry has become more technologically advanced, the complexity faced by marketers has also increased, the report insists, with brands largely dependent on the adtech industry to reach their target audience.

However, criticism has mounted in recent years, both within and outside the industry, about the increasing reliance on models and algorithms in adtech. Designed to increase performance and efficiency, the models are often opaque in their exact workings – a fact that more and more advertisers are starting to worry about as they fight to tighten up their understanding of data flows and how users are targeted with ads.

According to the study this is at the top of mind for many marketers. More than three in five (63%) say that they struggle to reduce bias in models, citing explainable AI and so-called black-box models as important topics.

The topic is even the most popular priority moving forward. Eight in ten marketers (80%) answer that reducing bias in advertising models is a main priority for their company in the coming 12 months.

Precis London managing director Rhys Cater said: “Complying with current regulatory standards is far from enough. If you want to make marketing a good experience for the consumer, it requires a concerted effort to make all engagements with marketing positive and fair, to treat data with integrity, and act transparently.

“As algorithms in ad platforms become more powerful, and marketers reliance on them increases, our ability to understand and control how ads are served is diminished.

“As advertisers we must challenge the results that algorithms and platforms present to us with both consumer welfare and performance in mind. The classic performance example is remarketing. For advertisers the immediate short-term results can look good, but does it offer a good experience for users in the long run, does it create a good association with your brand and is its impact incremental?”

Lloyds Banking Group head of paid digital marketing Nic Travis believes the brands that will benefit in the long run are the ones that are more prudent around the level of consent they get, their transparency and the ones that can educate the users on the value that this consent brings. He added: “After all, when the regulation tightens, they will be better prepared for those changes.”

Meanwhile, Staffan Mörndal, a partner at the specialist growth equity investment firm Verdane, says that from the investor perspective, his business looks at a company’s ability to generate lifetime value. If a company somehow not treating its customers well, there is an increased risk they are not going to come back.

He concluded: “The way we see it, unethical marketing creates an unsustainable competitive advantage. Ethics has therefore become an integrated part of Verdane’s due diligence process and the way we support our portfolio companies in their marketing.”

The crunch-time is likely to come when the Government’s proposed changes to UK GDPR are revealed. Ministers have hinted that they want to reduce the “burden” on businesses but privacy campaigners have already warned of a “bonfire of privacy rights”.

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