Data ethics is a priority for nine out of 10 CMOs but half need help making it a reality, WFA research shows

New WFA research has found that while CMOs are keen to address consumer and regulatory concerns around data-driven marketing, the complexity of the data and digital ecosystem is making it hard for them to identify the right practical measures to take.

The vast majority of CMOs (92%) at multinational companies are prioritising an ethical approach to their use of data, but half (50%) do not know what this means when it comes to the processes and practices they need to apply both internally and across their marketing supply chains.

And while 60% says data ethics is a top priority, many are held back by the associated costs (25%) and the need for requirements such as recruiting new expertise, broader staff training and development of new policy guidance (16%).

The results are based on 12 responses provided by global CMOs who sit in the WFA’s CMO Forum, which represents brands spending over $120 billion each year.

Other key findings include:

• 50% of CMOs are very concerned about the level of privacy compliance among their external partners and suppliers (e.g. publishers, ad tech, online platforms and data brokers);
• 83% of CMOs are very concerned about being associated with a service provider or supplier that is investigated for the unethical use of data;
• Only 16% of CMOs are very confident that their company’s use of AI and machine learning will not create harmful unintended consequences for their consumers such as bias, unfair discrimination or unfair exclusion;
• 85% of CMOs are considering using privacy-preserving alternatives to programmatic advertising in response to increased regulatory scrutiny;
• 33% of CMOs believe that their marketers are consciously avoiding using data in a way that exploits vulnerabilities (e.g. unfairly excludes certain audiences, fuels unhealthy consumption patterns or polarises opinions);
• 41% of CMOs say data ethics has become an integral part of their organisation’s culture.

WFA’s new CMO Guide to Data Ethics in Practice is designed to help CMOs address these challenges and better understand their responsibilities around data and AI.

It outlines the practical steps that they can take to:

1. Hold third-party partners and suppliers to account for the ethical collection and use of data;
2. Balance the complex web of data-related marketing practices under their control with rising consumer and regulatory expectations;
3. Embrace the potential of AI and machine learning without compromising trust, safety or inclusivity;
4. Inspire their marketing community to make positive choices, mindful of the real-life impact their use of data has on digital society and its people.

With more than 60% of global advertising now going to digital channels, the new guide explains why brands must go beyond existing rules and apply a moral lens to the complex web of data-related marketing practices to develop more responsible, inclusive and ethical data practices.

While the challenges this poses are difficult and often beyond a CMO’s direct control, CMOs are in a position of unparalleled importance as the only leaders who can drive bold industry change.

“The widespread unease with the way data is used in advertising is bringing a tidal wave of pressure on brands and the entire data-driven marketing ecosystem. Only an ethics-driven response will adequately address the challenges and meet the legitimate expectations of consumers. However, data ethics is complex and often remains an abstract concept, that is not properly understood in practice. This must-read guide helps CMOs unpack the different facets of data ethics and guides them on the path to doing the right thing with data,” said Stephan Loerke, CEO of the WFA.

Published two years after the WFA’s ground-breaking Data Ethics – The Rise of Morality in Technology, the new CMO Guide to Data Ethics in Practice is the result of a year’s work by five members of WFA’s Digital Governance Exchange group: Rodrigo Cunha, Global Director, Legal and DPO, AB InBev, Giorgia Vulcano, Global Digital Ethics Manager, AB InBev, Stefano Marzocchi, Group Privacy Officer and DPO, Ferrero, Debbie Cartledge, Data & AI Ethics Strategy Lead, Unilever and Jamie Barnard, the former General Counsel – Global Marketing and Media at Unilever.

“It feels like the digital ad market in 2022 is facing an inflection point with the scale of regulatory, consumer and market pressures. So it’s an opportune moment to take a step back and consider how brands can use data in a more responsible, equitable and ethical manner. As CMOs, we have a unique responsibility to lead this change. If we don’t, we threaten the entire industry’s license to operate longer term,” said WFA President and Mastercard Chief Marketing and Communications Officer Raja Rajamannar. 

The WFA will now be looking to develop ‘toolkits’ to enable CMOs to dive into more detail in each of the four areas and operationalise the recommendations put forward in the new guide via a mix of webinars, further publications and practical training tools.