Academics weigh in: What privacy laws mean for advertising

The tightening of Australian privacy laws to better align them with the EU’s GDPR will have profound repercussions for the advertising industry, as users’ explicit consent to the collection and use of their data will drastically reduce the amount of data available, Australian marketing and law researchers have said. AdvertisementsNews.

The specific implications of these rules for advertisers and marketers will require technological adaptation, consumer empowerment, innovation in data and data usage approaches, and investment in advanced consent management systems and robust data security measures will not be optional, these researchers say. It will be crucial.

“Stronger consent requirements will require greater transparency in data collection and use, potentially reducing the amount of data available as users become more selective about their consent,” says Naser Pourazad, senior lecturer in marketing at Flinders University’s School of Business, Administration and Law.

“This could lead to a reduction in the ability to run highly targeted advertising, forcing a shift to broader strategies and more general audience segments. Compliance costs will increase as companies invest in new data management technologies, legal consultations and perhaps recruit data protection experts, which will be costly and burdensome for small and medium-sized advertising agencies.

“Businesses that rely heavily on third-party data will need to reassess their strategies, focusing instead on building a solid first-party data framework and direct customer relationships to mitigate the impact of limited third-party data availability.”

Pourazad believes that for advertising and marketing professionals, these regulatory changes present both challenges and opportunities.

“On the one hand, greater user trust can be achieved through increased transparency and prioritizing user consent, which can strengthen a brand’s reputation and ensure long-term customer loyalty.”

He said marketers will need to innovate their approach to collecting and using data, using creative and ethical methods such as loyalty programs, surveys and interactive digital content to encourage voluntary data sharing.

“Given the potentially smaller amount of data available for highly targeted campaigns, the focus will likely shift towards creating high-quality, engaging content that appeals to a wider audience, leveraging storytelling, brand values ​​and emotional connections.

“Continuous education and training will be essential to staying current with evolving regulations and best practices, ensuring marketing strategies are aligned. It will also require increased collaboration with legal teams, integrating compliance controls into marketing workflows to navigate the complex legal landscape effectively and ethically.”

As Nicholas Chu, professor of practice in the School of Marketing at UNSW, says, these regulations aren’t just about compliance. They’re about rethinking how we approach digital marketing.

“But that’s not necessarily a bad thing. It forces us to be more creative and authentically engaged with our audiences, rather than relying on vast, impersonal pools of data. That can lead to more meaningful interactions and higher-quality engagement.”

When GDPR was introduced in Europe, it wasn’t just about changing data collection practices; it was a complete overhaul, Chu says. Australian businesses will face similar challenges, but with the advantage of hindsight.

“We’ve seen the pitfalls and successes in Europe, so we can navigate these changes more strategically. The expanded definition of personal data means that even the smallest data points, such as cookies and device identifiers, will need to be handled with great care. This attention to detail could actually inspire greater trust among consumers, who will appreciate a high level of protection and transparency.”

Compliance costs will indeed rise, he says. Companies will have to spend money on new technologies, extensive training and legal consultations.

Chu, however, sees this as an investment in the future of business. The risk of hefty fines and operational disruptions will make compliance a top priority, but it also provides an opportunity to lead by example in ethical advertising practices, he says.

“We will likely see a shift toward advertising methods that prioritize privacy. This is not just a trend; it is a necessary evolution that has already begun. Contextual advertising that does not rely on personal data will become more sophisticated and common.

“There will also be a greater reliance on first-party data. Collecting data directly from users, with their explicit consent, will not only ensure compliance but also strengthen the relationship between brands and their audiences.”

Industry professionals will need to be thoroughly familiar with the nuances of these regulations, Chu said.

“It’s not just about checking off compliance boxes; it’s about understanding the spirit of these laws. Ongoing education and training will be essential, but more importantly, there needs to be a cultural shift within organizations to prioritize privacy as a core value,” he says.

“Requiring explicit consent means we can no longer rely on passive methods of data collection. It will push us towards more transparent and honest communication with our audiences. Marketers will need to develop the skills to create clear and persuasive consent requests that not only comply with the law but also resonate with consumers.”

Another important implication, Chu says, is technological adaptation, which brings with it an urgent need to invest in advanced consent management systems and robust data security measures.

“We will need to embrace new tools and platforms designed to ensure compliance while still enabling us to effectively run campaigns. This will also mean working closely with IT and legal teams, creating stronger cross-departmental ties than ever before.

“Strategically, we will need to become more innovative. With less data available, the focus will shift to creativity and quality over quantity. This is where storytelling and brand authenticity come in. Marketers will need to find new ways to connect with audiences using first-party data effectively and ethically.”

Another key aspect is consumer empowerment. Chu says industry professionals will need to ensure that users feel they have control over their data, which means prioritizing transparency and respect in all our interactions.

“This is a unique opportunity to build deeper trust and loyalty, which can be a significant competitive advantage,” he says.

“These laws will force us to become more ethical, transparent and innovative. It’s a big change, but also an opportunity to rebuild the advertising industry on a foundation of trust and respect. This can lead to more meaningful and lasting connections with our audiences.”

Anne Morton, co-ordinator of the advertising course at Swinburne University of Technology, says that before GDPR was introduced in Europe, many experts predicted a noticeable decline in the effectiveness and revenues of advertising, leading to the collapse of the free internet supported by advertising revenues.

“One article cited a Deloitte study that estimated a roughly 17% decline in annual ad revenue in Europe, but research conducted after GDPR put the decline at just 5.7%. That figure was based on analysis of pay-per-click publishers with high consumer opt-in rates. As with many changes, the predictions are often exaggerated and the actual results are much lower,” he says.

Morton argues that legal controls over privacy restrict advertisers from accessing user data, which is used for “behavioral targeting.”

“However, this has led to the rise of ‘content-based targeting,’ which uses the content of a website to define a likely audience. This approach is similar to traditional media ad buying, where the content or programme of a publication attracts consumers and defines the audience, and advertisers provide clues as to their interests.

“Research from the US suggests that content-based targeting works better in verticals with special interest, such as financial services and travel, but is less effective in low-engagement, broad-spectrum industries, such as retail and consumer packaged goods. Placing ads in relevant content has been a cornerstone of media buying for decades.”

Morton said marketers and advertisers have always focused on building trust with their consumers, so the new privacy regulations will not affect that.

“Consumers prefer to be asked for consent, and most are willing to buy from brands they trust. Openness and transparency are the foundation of any relationship, so that includes the relationships between companies and consumers.”

Dan Svantesson, a professor at Bond University’s Faculty of Law who specialises in internet and privacy law, believes that the current Australian privacy rules are very beneficial to advertisers.

“Australians deserve better protection and it looks like we’re finally getting it. The small business exemption is no longer sustainable, if it ever was. In addition, small businesses can now be ‘data intensive,’” he says.

“The law reform may not come as a surprise to anyone and the Australian advertising industry has the advantage of learning from previous events overseas.”

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