Monitoring upcoming regulatory changes and anticipating how they will impact the industry has been one of the main challenges of 2021, and will continue to be a challenge in 2022. The EACA stands ready to provide the industry with valuable input at any given moment
EACA – the European Association of Communications Agencies – has been the voice of Europe’s communications agencies and associations for years. Here we speak with EACA Director-General Tamara Daltroff about the major issues confronting the industry today, as well as commercial communications’ economic and social contribution to society.
Looking back at 2021, what have been the major legislative challenges faced by the industry and what are you expecting for 2022?
Innovation in the sector has been fast-paced over the last decade, not to say the last decades. However, what’s new is the desire of legislators to increasingly regulate innovation in response to the rising economic and social impact of media and communication actors.
In this context, monitoring upcoming regulatory changes and anticipating how they will impact the industry has been one of the main challenges in 2021, and will continue to be in 2022. Various legislative initiatives are emerging to enhance the transparency of the Digital Single Market. These include, of course, the Digital Services Act (DSA), which sets rules for media platforms, hosting and service providers and for very large online platforms (VLOPs) to combat illegal content and improve the transparency and accountability of platforms. Similarly, the Digital Markets Act (DMA) sets out criteria for identifying market “gatekeepers” and specifies what they should and shouldn’t do online. These two pieces of legislation alone have important implications for the advertising industry.
Targeted advertising is likely to be prohibited for minors, but also for categories of personal data considered sensitive, i.e., data revealing racial or ethnic origin, political opinion or religious or philosophical beliefs.
There are still important questions about the implementation of these provisions. How can we ensure that minors are protected against targeted advertising? Likewise, a ban on targeted advertising for minors means, in return, that non-targeted ads to minors are still possible. To what extent is this a major achievement? If the legislator wants to prohibit targeted advertising based on the profiling of minors, it should be explicitly mentioned in the text of the regulation, which is not the case at this stage.
Equally important is the legislative proposal on political advertising. The European legislator intends to increase the transparency of electoral events and the influence of advertisements related to them, especially on social networks. Under the plans, a political advertisement will have to indicate that it is advertising intended for political purposes and reveal the donor, the political party behind the advertisement and the money spent on the campaign. While this is supposed to increase transparency during elections, a question remains as to what type of advertising will be considered political and what advertising won’t. For the time being, this is far from clear, as the definition used by the legislator is extremely broad. For media and communications agencies, but more generally for advertisers, commercial advertisements should not fall within the scope of this new regulation. However, the growing number of advertisements promoting a societal message would quickly fall within the scope of the new regulation, even though they are not intended to influence the outcome of an electoral process.
It should be noted that the industry has made significant progress in rendering targeted advertising more transparent over several years. A successful example of a transparency initiative is the “YourOnlineChoices” platform, which was developed by the European Interactive Digital Advertising Alliance (EDAA)
Artificial intelligence is increasingly catching attention of regulators who intend to preserve the ethical use of these technologies. How are these legislative advances influencing the industry?
Artificial intelligence has become part of our everyday lives. AI technologies are transforming entire industries, including the media and communications industry. AI is a family of technologies that can optimise existing processes or enable brand new activities, for example by improving predictive models or personalising the delivery of services. It presents major new opportunities, but also serious risks. AI provides unprecedented revenue opportunities while cutting costs significantly. AI is neither necessarily good nor bad; it is primarily a reality and ethics always depend on the use of technology in line with the values promoted within society. AI is crucial to our industry, and will continue to be, as the future of media and communications lies in the potential to efficiently use high-quality data sets to foster business growth.
With regard to the economic and social value of AI technologies, regulators are trying to frame innovation to serve a societal purpose and promote the ethical use of AI.
The European Commission published its Artificial Intelligence Act proposal in April 2021, which seeks to ban AI systems that manipulate consumers through subliminal techniques or exploit vulnerable individuals. Moreover, the Regulation seeks to mitigate the risks of certain AI uses and foster investment and innovation in the sector. Agencies developing and applying AI systems must subject them to a risk assessment, and either take steps to mitigate this risk or stop using them all together, depending on the level of risk. It also stipulates requirements on the quality of data sets, with potential fines for noncompliance. The proposal still needs some clarification on the categories of AI systems falling under the scope of the Regulation.
Diversity and Inclusion (D&I) is becoming increasingly important in the advertising industry. How does the industry adapt to these changes and what are agencies doing to promote D&I?
Diversity, Equity and Inclusion have already been highlighted by EACA as a challenge for our industry. In 2020, we launched our own high-level taskforce, comprising National Associations and Corporate Members from across Europe. We kicked off our work at the beginning of 2021, acknowledging that data and an analysis of the status quo will be needed to ascertain where the pain points are and where our industry has weaknesses.
In the summer of 2021, EACA co-initiated, together with WFA, the first ever global Diversity, Equity & Inclusion (DEI) census in the marketing and advertising world, intended to assess where the industry stands in relation to diversity, equity and inclusion, and to analyse people’s perception of DEI in their own workplace. National agency & advertiser associations participated in this census across a wide variety of countries and territories, gathering more than 10,000 responses from 27 markets. The participating European countries in this census were Belgium, France, Greece, Ireland, the Netherlands, Portugal, Spain, Sweden and Turkey.
Initial results have identified key challenges related to family status, age and gender, as well as ethnicity and disability, sense of belonging, experience of discrimination and demeaning behaviour. Despite these serious concerns, the marketing sector still outperformed several other sectors that were analysed by research partner Kantar, scoring an overall 64% on the Inclusion Index, ahead of the next highest sector, Health and Pharmaceuticals, which stood at 60%. In 2022, we will work closely with the agencies & associations to improve on the biggest pain points of the industry.
To address diversity, inclusion and equity in the advertising industry and beyond, it is not enough to change how we recruit and promote diverse talent. Communication and Marketing campaigns should reflect the reality of the people who are interacting with businesses on a daily basis. Today’s consumers expect to see people they relate to represented in the advertising campaigns of their favourite brands. And brands strive to be as customer-centric as possible. This implies knowing who is drawn to your brand and making sure those groups are represented and included in marketing efforts.
Another aspect of Diversity and Inclusion relates to brand safety. Brand safety is a set of measures that aim to protect the image and reputation of brands from the negative or damaging influence of questionable or inappropriate content when advertising online. This includes issues such as knowing how to exclude unsuitable and unsafe content and how to target and include diverse publications. As a matter of best practice, we recommend that brands determine their risk tolerance and corresponding suitability criteria before working on keywords and semantic technology, in order to avoid being linked with discriminatory content online. Since this topic has gained increased importance important over recent years, the EACA Media Agencies Council has published industry guidelines to help companies incorporating D&I within their Brand Safety standards.
EACA is a signatory of the EU Code of Practice on Disinformation and is participating in the process of revising the Code in line with the European Commission’s guidance. This process is expected to be completed by the end of March 2022
Brand safety is also relevant when it comes to the spread of online mis- and disinformation, which is a big topic at the moment. What can we expect to see on this subject in 2022?
The spread of mis- and disinformation is a hugely important issue. The European Commission is very concerned about the impact it can have, particularly during important election periods. It has legitimate concerns about the way online advertising, however unintentionally, can actually monetise this content. This is an area where industry and regulators share similar goals: brands naturally don’t want their advertisements to appear alongside potentially harmful content. Navigating these risks can be a huge challenge.
When it comes to online platforms, each takes a different approach when it comes to misleading content, with some focusing primarily on content removal, while others also employ labelling techniques.
Which social media networks are the most relevant for marketers today, given that some of them – like TikTok for example – were almost unknown but are today among the most influential?
TikTok indeed provides amazing opportunities for marketers – it’s difficult to understate the impact of the app. You only have to look at how songs that trend on the platform go on to dominate the U.S. charts to understand the importance of its reach. It has more than a billion active users and is growing at a staggering rate.
While it is mostly associated with teenagers, more than a third of its users are in their 20s and almost a fifth are in their 30s. That said, other platforms remain hugely important to marketers.
We are facing inflation for the first time after many years. How much is the industry affected?
Highly. It is a real concern. Agencies are people-centred businesses. The industry, and especially agencies, are struggling to find the right talent. Mental health was the subject of many discussions within the agencies, but also within EACA, in 2021. There was an incredible number of pitches due to postponements from 2020.
The workloads of the teams were alarming. This development has unfortunately not helped in terms of retaining talent in agencies, or even in the industry. Agencies tried to compensate for that by providing higher salaries. The current inflation rate on wages, but also on office costs, do have an impact on agencies. We have more and more countries flagging this challenge when dealing with clients.
Advertisers are increasingly aware of the importance of transparency to increasing consumer trust
Regulations need to be enforceable, without generating legal uncertainty. And this is where significant efforts still need to be exerted
More and more agencies are flagging inflation as a major challenge when dealing with clients and talent retention