AI Regulation and Impact on Marketing in 2023 Miguel Pujols June 2, 2023

AI Regulation and Impact on Marketing in 2023

It took 40 years, but Skynet is officially live 🤖

human and robot touching fingers

Jokes aside, whether you like it or not, Artificial Intelligence (AI) is here and it’s staying here. And as this technology rapidly evolves, AI is significantly transforming the field of marketing and revolutionizing how businesses connect with their customers.

With any new and developing technology, legislation is not far behind. With AI however, legislation is actually having trouble keeping up. As AI’s influence grows, so do the concerns surrounding its ethical implications and potential risks. In response, lawmakers around the world are actively working to adapt existing regulations and establish new AI laws to ensure responsible and beneficial AI deployment.

AI Legislation Progress in 2023

AI legislation

This past month, Microsoft President Brad Smith emphasized the need for AI regulation, describing it as the defining challenge of the 21st century. Smith outlined a comprehensive five-point plan aimed at addressing the risks associated with AI. Smith’s remarks and the accompanying policy paper came shortly after Google released its own proposals, emphasizing the importance of global cooperation and the establishment of common standards for AI.

While the United States lacks comprehensive federal legislation on AI, there are various state and proposed regulatory frameworks in place. For example, in 2022, specific AI regulations were introduced, focusing on areas like AI in recruitment and employment. States such as New York implemented laws requiring annual bias audits for AI-based employment decision tools. The Equal Opportunity Employment Commission (EEOC) issued guidance on AI tools in employee hiring to prevent unintentional discrimination.

In 2023, general obligations for AI use cases are expected to be introduced through privacy legislation in states like California, Connecticut, Colorado, and Virginia. These laws govern automated decision-making and grant consumers opt-out rights for high-impact AI decisions. They also emphasize AI transparency and require impact assessments for AI processes that pose a heightened risk to consumers.

AI Regulation at the Federal Level

At the federal level, the Federal Trade Commission (FTC) has shown interest in AI regulation. The FTC has issued publications outlining ground rules for AI development and use, emphasizing data representativeness, testing, explainability, and accountability. The FTC has also utilized existing consumer protection laws to enforce AI-related actions, such as requiring companies to delete AI algorithms developed in violation of privacy regulations. The FTC’s recent advance notice of proposed rulemaking (ANPR) seeks public input on potential rulemaking for AI technologies impacting consumers.

NIST’s AI Risk Management Framework

The National Institute for Standards and Technology (NIST) is working on standardizing AI risks and trustworthy management. NIST’s AI Risk Management Framework (AI RMF) provides guidance on addressing risks in AI design, development, use, and evaluation. The AI RMF emphasizes characteristics that make AI trustworthy, including validity, reliability, safety, fairness, explainability, and accountability.

AI Impact on Marketing in 2023

chat gpt on laptop screen

AI is revolutionizing marketing by enabling data-driven decision-making, personalized customer experiences, efficient content creation, campaign optimization, and enhanced customer interactions. As AI technologies continue to advance, marketers will have access to increasingly powerful tools to drive innovation and achieve marketing goals.

Here are just some ways in which AI is changing the world of marketing:

  • Data Analysis and Insights: AI-powered analytics enable marketers to process and analyze vast amounts of data quickly and accurately.
  • Customer Personalization: AI enables marketers to deliver personalized experiences to individual customers at scale. 
  • Chatbots and Virtual Assistants: AI-powered chatbots and virtual assistants are transforming customer interactions. They provide instant and personalized responses to customer inquiries.
  • Content Creation and Curation: AI is being used to automate content creation and curation processes. Natural Language Processing (NLP) algorithms can generate written content based on given parameters.
  • Predictive Analytics and Campaign Optimization: AI enables marketers to forecast future outcomes and optimize marketing campaigns in real-time. 
  • Social Media Management: AI plays a crucial role in managing and analyzing social media platforms. AI-powered tools can monitor social media conversations, identify trends, and track brand sentiment.
  • Voice Search and Smart Assistants: The rise of voice-activated devices and smart assistants has influenced marketing strategies. AI-powered voice recognition technology enables businesses to optimize content for voice search, ensuring their brand is discoverable through voice-activated devices.

Industries across various sectors (Marketing included) are increasingly relying on AI to optimize their business processes and gain a competitive edge. However, many companies may not fully realize the extent to which they already use AI in their operations. It is crucial for organizations to recognize and manage the regulatory risks associated with AI.

Preparing Your Marketing Team for RAI Success

To prepare for the evolving regulatory landscape, marketing agencies and teams should continuously assess their AI usage and potential regulatory risks. It is essential to stay informed about state privacy laws and comply with obligations related to automated decision-making. Companies should also be aware of the FTC’s AI-related enforcement actions and engage in the rulemaking process to shape future regulations.

Here are some helpful tips for RAI success in 2023 and beyond:

  • Empower RAI leadership: A dedicated leader (like a chief AI ethics officer) is crucial to keep RAI initiatives on track. They should have expertise in policy, technology, and business to create a cohesive strategy that benefits from AI, aligns with social values, and complies with regulations. Collaboration with cross-functional teams is key to implement RAI programs effectively.
  • Establish an ethical AI framework: Companies need a set of principles and policies that form an ethical AI framework. This framework provides a solid foundation to meet diverse regulatory requirements without hindering goals and investments. It includes measures like investing in bias mitigation, ensuring privacy protection, promoting transparency, and clear documentation. Having an ethical AI framework builds trust and helps companies meet their responsibilities.
  • Involve humans in the AI process: Strong governance and human accountability are important in AI regulations. RAI emphasizes the involvement of humans in AI processes and platforms. Companies should design AI systems that enhance human capabilities rather than replacing them. Incorporating feedback loops, review mechanisms, and paths to address concerns is crucial for responsible AI practices.
  • Implement RAI reviews and integrate tools: RAI covers the entire lifecycle of an AI system. Companies should catch and resolve issues early and maintain vigilance throughout development and deployment. Core RAI principles should be embedded in the processes of building and working with algorithms. End-to-end reviews should be conducted continuously, including business processes and outcomes.
  • Participate in the RAI ecosystem: Joining RAI consortia or working groups is beneficial for collaboration, sharing best practices, and preparing for AI regulations. The RAI ecosystem offers opportunities to find partners, customers, and forums to develop and scale AI use cases. It also facilitates knowledge sharing on risk mitigation and maximizing AI’s benefits. Collaboration within the ecosystem helps address societal concerns proactively.
  • Work with an RAI-Compliant Marketing Team: Lastly, work with a dedicated team of RAI marketers to follow AI compliance and best practices. Giant Propeller might be the solution for you. Learn more about how we can propel your brand to new heights.