As Australia braces for significant changes to the Privacy Act against a backdrop of GenAI evolution, the nation’s marketers are nervous about their preparedness and MarTech stacks.

With data breaches regularly making headlines and consumers becoming increasingly concerned about privacy, the upcoming privacy reforms could have implications for many Australian businesses. According to the Arktic Fox 2024 Digital, Marketing & eComm in Focus study, many marketing professionals feel ill-prepared for this regulatory shift. The potential for severe financial and reputational damage looms large – making it imperative for Australian businesses to urgently address their data practices.

The Privacy Act reforms aim to enhance data protections for Australian consumers in the same way the General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA) enhanced them for consumers in the European Union and US. According to the Office of the Australian Information Commissioner (OAIC), data breach notifications increased by 19 percent in the second half of 2023, highlighting the growing risks associated with inadequate data protection measures.

The preparedness gap

The Arktic Fox study, which interviewed 250 marketing, digital and e-commerce leaders across Australia, revealed only 29 percent of respondents believe their organisations are effective at activating data to deliver impressive CX. Even fewer (22 percent) marketing and marketing-adjacent professionals are confident in their data management and maintenance practices.

Arktic Fox founder and director Teresa Sperti emphasises the importance of addressing this preparedness gap in a timely manner. “Businesses could soon be suffering even more dire financial and reputational consequences for failing to appropriately safeguard their customers’ privacy,” she warns.

Arktic Fox founder Teresa Sperti and Amperity APAC VP Billy Loizou

“A privacy or spam breach impacts reputation and trust, which is linked to brand performance and preference. So, it’s surprising that there isn’t much more focus on improving compliance and data maturity by Australian marketers and digital leaders.”

The costs of non-compliance

The potential consequences of non-compliance with the Privacy Act reforms are severe. The OAIC has flagged that it’s willing to impose fines on organisations that fail to meet the new standards. Those fines can be large, with OAIC having stated: “If the investigation finds serious and/or repeated interferences with privacy in contravention of Australian privacy law, then the Commissioner has the power to seek civil penalties through the Federal Court of up to $2.2 million for each contravention.”

And those fines can pale into insignificance compared to the costs incurred by reputational damage. As this Australian Financial Review article notes, Optus was forecast to grow from a $4 billion brand in 2022 to a $4.5 billion one in 2023. But after a highly publicised data breach, it instead ended up with a $3.3 billion valuation in 2023. Likewise, a massive data hack abruptly wiped $1.8 billion from Medibank’s market value in the wake of October 2022. 

If you’re a marketer who isn’t at least somewhat anxious about whether your organisation’s data-handling practices are beyond reproach, consider the following findings from Australian Community Attitudes to Privacy Survey 2023:

• After quality and price, data privacy is the third most important factor (for Australian consumers) when choosing a product or service
• 21 percent (of respondents) received unsolicited direct marketing
• 25 percent were not able to unsubscribe from marketing communications
• 47 percent were told by an organisation that their personal information was involved in a data breach in the previous year
• 76 percent said they experienced harm because of a data breach
• 89 percent would like government agencies to do more to protect their personal information
• 92 percent would like businesses to do more to protect their personal information

What now?

The Arktic Fox study highlights the need for change within many Australian businesses. Marketers must prioritise data protection as a core component of their strategies, rather than an afterthought. This cultural shift requires buy-in from senior leadership, who must champion the importance of both privacy and data-driven decision-making.

Amperity Asia Pacific area vice president Billy Loizou sympathises with Australian marketers. “They want to take advantage of the available tools, but they are struggling to execute,” he says.

Loizou counsels those marketing and marketing-adjacent professionals who are starting to get anxious to have a fresh look at their MarTech stack, especially the less glamorous aspects of it. “The study showed that it’s still CRMs and marketing automation platforms that get most of the attention and investment,” Loizou says. “But those aren’t tools that solve the messy data issues that so many Australian businesses still confront. It’s Consumer Data Platforms (CDPs) that do that. And because CDP provide an enterprise-unified view, that can solve lots of the other challenges businesses now face.”

The GenAI piece of the puzzle

The rapid adoption of generative AI presents both opportunities and challenges for marketers. AI can enhance customer experiences and facilitate ‘mass personalisation’. But letting it loose on your organisation’s data can introduce new privacy concerns. 

As has been the case in other periods of disruption, it’s likely that agile businesses will steal a march on their more complacent and slow-moving rivals. “Brands that have built strong internal capabilities and robust foundations in data and tech are thriving, while others are finding it difficult to shift gears,” Sperti says.

Moreover, Loizou believes Australian marketers want to take better advantage of the available tools. “The problem – as they are usually the first to point out – is Australian marketers are struggling to execute,”  Loizou says. “That’s hardly a new situation, but when you add in factors such as the rise of GenAI, imminent reforms to the Privacy Act, flat marketing budgets and Google deprecating third-party cookies, it’s not surprising so many CMOs are nervous.”

Arktic Fox is an advisory and learning organisation partnering with leaders to better exploit opportunities in the digital and e-commerce space and drive successful and sustainable outcomes in the digital age.

Imagery supplied by Arktic Fox.

Also, read about reconnecting with consumers in the digital age.