Advertisers: How to Prioritise Privacy as you Navigate Changes to the Australian Privacy Act
Any business that advertises in Australia needs to consider its updated privacy responsibilities.
The Australian Privacy Act is evolving, and the push is on for Australian businesses to consider how this will impact them as advertisers as they prioritise privacy. No advertiser wants to be the test case – the first business to run afoul of updated privacy legislation around automated decision-making (ADM) practices. Especially once the second, likely more extensive, tranche of updates is announced.
“Here’s a new thing advertisers should be doing: audit the widely-adopted advertising platforms your business is using, and their hidden algorithms. Start to get a real handle on how data is being used in your advertising programs. Ideally, get involved with the development of custom algorithms to support your advertising program” – James McDonald, Director, Audience Group
Updating Australia’s Privacy Act
The first set of changes, released in September 2024, brings in a new statutory tort to combat serious invasions of privacy, establishes Australia’s first Children’s Online Privacy Code, improves transparency around ADM, and ramps up enforcement to deter the malicious release of personal information (doxing).
The second tranche is still to come, and in anticipation of that there have been calls for an updated definition of “personal information”, an improved definition of “consent”, and information on how a “fair and reasonable test” would apply to the use of such information. It is hoped and expected that more detail will be provided around targeting, direct marketing and other elements of how Privacy Act updates will impact the way marketing and advertising is done in Australia.
How Advertisers can Prioritise Privacy
While we await the next round of updates, businesses cannot afford to ignore these developments. Failure to do so could lead to severe consequences. The new statutory tort and enhanced enforcement measures mean that non-compliance isn’t just a risk; it can involve reputational cost and hit the bottom line.
Now is the time for advertisers to rethink their strategies, prioritise privacy compliance, and embrace ethical practices. Adapt or face the fallout in a landscape where consumers demand transparency and accountability.
With these reforms demanding immediate attention, here’s how advertisers can navigate these changes effectively:
- Understand the Scope of Responsibility
Compliance falls heavily on data-collecting organisations, ie. the advertiser themselves. However, brands must ensure that their suppliers and partners (such as media agencies) adhere to these new regulations. Data collection and usage risks, especially concerning targeted advertising, are significant. Scrutinising partners’ data practices is crucial for compliance and maintaining ethical standards. - Get a Grip on the Algorithms
That’s right. The time has come for advertisers to prioritise understanding how the algorithms they rely on actually function. Many companies use third-party platforms like Google, Facebook and YouTube for targeting, segmentation and automation without fully grasping how these algorithms function or their potential biases. The lack of transparency surrounding these “black box” algorithms poses risks to compliance and to ethical advertising practices.
To understand more about this, we caught up with Adam Heimlich, Founder / CEO of our partner, Chalice Custom Algorithms. [Client Success Case Study]
“In order to ensure compliance as you prioritise privacy, you have to understand the algorithms you’re using. What they do with the data, what their selection criteria is. How they choose what they choose. I challenge anybody out there to do that, when working with the black box algorithms of the likes of Google and Facebook. This is where AI and privacy interconnect,” Adam pointed out.
“Typically, a business will outsource targeting and media planning to an agency. Some may have internal teams using the automation built into platforms. Either way that typically means using platform algorithms like Trade Desk’s Koa or anything that’s built into Google or Facebook. And there’s not a chance that they know what those algorithms do. No one has ever audited those. And you can’t expect the tech giant to bear responsibility for any outcomes that push your business out of compliance,” said Adam.
As the Privacy Act tightens, at some stage a brand’s targeting intentions may not matter, in terms of compliance. What would matter would be whether or not the outcomes ran afoul of the legislation.
The way we see it, if you’re not building your own algorithms or working with a partner that can explain their algorithms, how can you possibly know whether you are compliant or not?
Increasingly, we’re opting to build our clients proprietary algorithms customised for the brand’s objectives and its focus on privacy. This is smart advertising strategy for reasons beyond compliance. It gives advertisers more control and ensures data is handled responsibly. When combined with other advanced advertising strategies such as attention metrics, this can yield significantly improved results. - Bring Contextual Targeting Up to Date
Contextual advertising is not a new advertising strategy, by any means. It’s all about placing ads in environments that naturally align with the product. Plus it enables advertisers to engage consumers without invasive data collection. This approach aligns well with consumer expectations regarding privacy.
This approach can be modernised with the ethical use of data, as advertisers prioritise privacy.
— Ethical Targeting (Yes, it’s possible) — By using anonymised and aggregated data, advertisers can maintain relevance without identifying individual users. Sharing these datasets with agency partners enables effective ad targeting without compromising privacy.
— Dynamic content targeting — Leveraging first-party insights, dynamic ads adjust messages in real-time based on consumers’ current interests. Ads can also be targeted contextually, based on the content a user is viewing. For instance, serving health-related ads within a fitness article respects user privacy by focusing on context rather than past behaviours. - Explore Advanced Targeting Methods — Advanced targeting methods, like custom bidding algorithms, can curate audiences on the supply side and optimise costs. Brands can build their own tech stacks and algorithms to take back control. There’s a lot more potential for advertisers to use custom solutions to better align with their business objectives.
- Improve Transparency and Consent
While the Act currently allows for “implied” consent, brands should anticipate a future where clear, explicit consent is mandatory. Pre-emptively implementing transparent opt-in mechanisms can help businesses stay ahead of the curve. By communicating, and offering customers control over, what data is collected and how it’s used, brands can build trust and ensure long-term compliance. Consent preferences should be easy to adjust or revoke, giving users control throughout their interaction with the brand.
Ethical Considerations in Advertising
This is also a good time to consider the unintended consequences of targeting strategies.
While some targeting may unintentionally exploit vulnerable groups, algorithms can exacerbate these issues. For instance, an algorithm might target lower-income areas based on purchasing patterns, even if it wasn’t the advertiser’s intent. Beyond privacy, advertisers should also be cautious of perpetuating stereotypes, such as consistently showing beauty ads to women or tech ads to men. These biases limit inclusivity and may harm a brand’s reputation.
Even when promoting seemingly neutral products, advertisers can be mindful of how their campaigns might perpetuate stereotypes. For example, continuously showing tech or gaming ads to a male audience or beauty products only to women reinforces outdated gender roles. This type of targeting, while subtle, can contribute to societal biases and limit the inclusivity of campaigns.
Advertisers can foster a culture of accountability, ensuring campaigns consider not just performance metrics but also their societal impact. Are certain groups being over-targeted or excluded? Are campaigns promoting diversity and inclusivity?
By adopting a thoughtful, ethical approach, advertisers can balance personalisation with fairness. This not only shields them from reputational damage but also aligns with consumer demand for integrity in marketing.
Embrace Change as an Opportunity
The evolving privacy landscape presents both challenges and opportunities. Advertisers who a) proactively address these changes— by ensuring compliance, adopting ethical data practices, offering clear consent mechanisms, and b) actively communicate about their approach to privacy, data usage and responsible advertising can stand out in a crowded marketplace.
Contact us to ensure data privacy and improve your advertising outcomes at the same time.
Staying informed and adaptable will be crucial as we move forward. The dialogue around these changes is ongoing, and advertisers must engage with agency partners that are ready with the necessary tools and strategies to step up to the data privacy challenge.
