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EU AI Act: Implications for B2B marketers

EU AI regulations impact on B2B marketing

In order to understand the impact of the recently endorsed EU AI Act on B2B marketing, I’ve interviewed David Keene, CMO Europe, Wipro, and Ian Liddicoat, CTO & Head of Data Science, Adludio. The implications of this legislation are vast, reshaping not only how organizations approach risk management but also how they use AI for marketing purposes. We explored what marketing leaders need to consider to ensure compliance while maintaining effectiveness. Learn from our Propolis expert on how to leverage AI tools to enhance marketing campaigns.

Innovation and compliance: the two pillars

According to David, who will be speaking at Ignite, the foundation of navigating the EU AI Act in B2B marketing lies in balancing innovation with compliance:

If you think of B2B Marketing as a pyramid, then AI innovation is in the eye. However, the foundations of this pyramid are built on risk, compliance, and assessment. Everything must be built on the risk-based framework of the EU AI Act. This means that you are accountable as a B2B marketing leader to understand the risks of the different technologies and tools that you’re using, and to carefully manage both data strategy, permissions, and AI.” 

David adds this alignment of new AI-driven marketing techniques with regulatory standards is critical for achieving better personalization, predictive capabilities, and customer engagement.

Rethinking risk management and governance

The new legislation requires organizations to conduct comprehensive risk assessments of the AI technologies they employ. Understanding the nuances of each technology helps identify higher-risk categories. 

With fines ranging from three to seven percent of revenue, non-compliance poses significant financial risks. To mitigate these risks, Ian says companies need individuals versed in legal and technical aspects of AI, a blend of expertise challenging to find:

“It has very significant implications for organizations. They will need to rethink the risk management and structures, documentation and policies. They will certainly need individuals who have a mix of legal policy and technical understanding, and those are quite hard to come by. And I think those individuals would need to exist for advertisers in the B2B sector at quite a senior level, and almost certainly board level, partly because the fines that the EU are intending to enforce are very significant.”

Focus on risk classification and transparency

Marketing professionals must demonstrate transparency in AI-driven models, showcasing data used for training them and application. This requirement implies a thorough understanding of data sources and model training methodologies.

David stresses the importance of gaining first-party permission to engage with customers and focusing on transparent communication channels. Responsible content generation and consent mechanisms are crucial for maintaining customer trust and compliance with regulations:

“Just using AI systems without thinking much about it is something that I wouldn’t recommend people to do. We need to think about risk clarification, which AI technologies we’re using, particularly in decision making processes like lead scoring or customer profiling. They will require a more complete risk assessment and working with partners.”

David adds that it’s important to understand how to be transparent about the use of AI in terms of notifications and disclosures. He suggests thinking about transparency for these disclosures and ensuring that you really build transparency and trust with potential and existing clients.

Increasing collaboration for compliance

Ian also mentions the need to work with partners, saying organizations may need to shift some of this compliance responsibility to technology partners:

“Obviously consulting firms will spring up offering services to companies, and that’s already happening. That’s quite normal when you see new legislation. I also think that B2B organizations will pass a lot of the burden to their technology partners. And they will then need to think about what expertise they need in-house, and ultimately that will have implications for how much innovation and investment goes into the use of AI internally.”

David also predicts increased collaboration between B2B marketing leaders and technology companies to ensure compliance with the EU AI Act: “there’s going to be an evolving set of best practices. Vendors and the companies that consume software will start to work together.” 

This collaboration will involve sharing best practices, conducting joint risk assessments, and aligning with evolving standards. By partnering wisely with vendors that prioritize compliance and ethical AI development, marketers can navigate the regulatory landscape effectively.

Human oversight in AI development

For AI tech like chatbots and content generation tools, human oversight becomes imperative. The EU Act insists on human intervention throughout AI development and application, particularly in generative solutions. This requirement aims to mitigate biases and ensure accountability in AI-generated content, which is crucial for maintaining trust in B2B marketing efforts.

Ian says “in the early stages organizations will push the responsibility onto tech companies as much as they can. But they can only do that so far because B2B providers need the benefits of AI as well. This is about risk management in the end. There are risks and there are opportunities, and all organizations will need to reap the benefits of AI, which means they need a level of control over data and the way models are trained and applied. So I think we will see a greater level of fusion between B2B companies and tech companies with joint ventures.”

David suggests establishing internal AI governance teams or collaborating with broader business units to oversee AI usage. Marketing leaders must prioritize transparency and build trust with customers by clearly explaining how AI is used in their operations.

Challenges in data and privacy

B2B marketing leaders face challenges in adapting strategies to comply with the AI Act’s requirements on data and privacy. Ian reiterates that finding personnel with technical and legal expertise is a major hurdle:

“There’s a very close relationship between the privacy laws in the EU and the new act, the two sets of legislation are interchangeable. I think one of the big challenges is finding the personnel that have a mix of technical understanding of AI in its various forms, which is a complex area of computer science, and who understand the law. B2B organizations are going to struggle to find individuals who have the necessary technical knowledge and legal understanding to manage the policy internally.”

It may be difficult to find the balance between in-house AI capabilities and reliance on technology partners. In any case, it’s imperative to align AI strategies with data privacy laws to ensure compliance.

David Keene highlights: “educating teams, auditing data practices, and choosing ethical AI vendors are vital for compliance and embracing AI’s potential in B2B marketing.”

Recommendations for navigating the AI Act

Technology advancements in hardware and cloud computing have an impact on B2B businesses, and this includes AI integration, which needs to be taken into account when planning for the future. Ian recommends appointing a policy maker at board level with specific responsibility for AI technology:

“It’s important to have a policy maker, ideally at board level depending on the size of the business. Someone who has responsibility for AI technology whether it’s internal or through technology partners or joint ventures. So make that appointment early to make sure they understand the short-term implications of the act. But also think about what role AI plays in your technology strategy over the next three to five years. And being very clear about how much of that will be in-house versus through third parties, because that will determine your exposure to the legislation.”

Impact on visual content and multimedia campaigns

With the rise of AI-generated content, particularly in industries reliant on visual content, marketers must navigate the implications of the EU AI Act. David advises against using deepfakes and emphasizes the importance of responsible content generation:

“In a B2B world you’re thinking about what does the customer want to hear about? What does the customer want to know? How can I help this customer? What are the needs and the desires of that customer? Using deepfakes doesn’t really help you in that world. So my advice to other B2B leaders would be: ‘Don’t go there. It’s not going to help you.”

B2B marketing leaders should prioritize ethical practices and transparency in their multimedia campaigns to avoid undermining trust with customers.

Preparing for the future

Both David and Ian stress that B2B marketing leaders must develop a clear AI strategy. Ian suggests considering the role of AI in their marketing roadmap and allocating resources accordingly: 

“You see a lot of organizations in B2B and B2C testing various things that have some AI component, without really thinking about what the strategy is going to be. What role will AI play? Is it 5% of the budget or is it 50% or greater? There’s very few organizations giving much thought to that at this point, probably because they don’t realize AI will take over many aspects of many processes. Most organizations are not ready.”

In conclusion, navigating the EU AI Act presents both challenges and opportunities for B2B marketing in driven technologies. By prioritizing innovation, transparency, and collaboration, marketing leaders can ensure compliance while maintaining competitiveness in the European market. As David Keene advises: “embracing responsible AI practices and viewing AI as a tool, not a silver bullet, will be key to success.”

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