Ethics in digital marketing

Ethics in Digital Marketing

Overview of the Lecture

  • Date: November 24, 2025

  • Instructor: Dr. Amira Mukendi

  • School: Strathclyde Business School

Topics Discussed

  • Ethics in Digital Marketing

  • Regulation in Digital Marketing

Objectives of the Lecture

  • To understand the main ethical issues in digital marketing (DM)

  • To understand the need for regulation in digital marketing

  • To understand some of the important legislation around digital marketing

Marketing Communications

  • Purpose of Marketing Communications (Comms):

    • Used to inform the public and promote social good

    • Can also be employed to deceive, raise expectations, and cause agitation

  • Discussion Point:

    • What are your opinions on the ethical implications of marketing communications?

Common Ethical Issues in Digital Marketing

Consumer Rights in Marketing

  1. Marketing Management

    • Product Policy:

      • Ensuring product safety and fitness for purpose

      • Right to safe and efficacious products

  2. Marketing Communications:

    • Issues include deception, misleading claims, intrusiveness, promotion of materialism, creation of artificial wants, perpetuating dissatisfaction, and reinforcing stereotypes

    • Rights Involved:

      • Right to honest and fair communications

      • Right to privacy

  3. Pricing:

    • Ethical issues such as excessive pricing, price fixing, predatory pricing, and deceptive pricing

    • Rights Involved:

      • Right to fair prices

  4. Distribution:

    • Issues involving buyer-seller relationships, gifts and bribes, and slotting fees

    • Rights Involved:

      • Right to make a fair choice

  5. Marketing Strategy:

    • Targeting vulnerable consumers and exclusionary practices

    • Rights Involved:

      • Right to be free from discrimination and right to basic freedoms and amenities

  6. Market Research:

    • Privacy issues and challenges

    • Rights Involved:

      • Right to privacy

The Need for Regulation in Digital Marketing

Reasons for Regulation

  • Power Imbalance:

    • Digital marketers often hold more power over consumers than vice versa

  • Persuasion vs Manipulation:

    • Distinction between ethical marketing practices and manipulative tactics

  • Public Opinion/Cultural Norms:

    • Reflecting societal values in marketing practices

  • Stereotypes:

    • Regulation can help prevent the perpetuation of negative stereotypes

  • Potential Harm:

    • Unregulated advertising practices can be harmful to consumers

Digital Advertising Facts

  • Market Overview:

    • The UK is the largest digital advertising market in Europe; among the top 3 globally

    • Financial Data:

    • £36 billion spent on digital advertising in 2024 (source: Statista)

Forms of Digital Advertising

Contextual Advertising

  • Definition:

    • Suggests advertisements based on the context of the webpage rather than personal information

  • Trends:

    • Increase in contextual advertising due to evolving regulations

Behavioural Advertising

  • Definition:

    • Relies on first-party data and data sharing to enhance customer profiles

  • Data Sources:

    • Data is aggregated from various sources including browser history, past purchases, interests, device, location, online identifiers, etc.

  • Personalization:

    • Ads appear on other sites following a user's search

  • Retargeting:

    • The practice of showing ads to users who have previously interacted with a company or product

Benefits of Behavioural Advertising

  • Relevance:

    • Ads are tailored to users, becoming more relevant

  • Campaign Performance:

    • Improved performance metrics for marketing campaigns

  • Audience Expansion:

    • Broader reach due to targeted strategies

  • Data-Driven Decisions:

    • Enhanced decision-making strategies based on collected data

  • Stronger Relationships:

    • Increased customer engagement and loyalty

  • Conversion Rates:

    • More than twice as effective at converting users compared to traditional ads

  • Revenue Generation:

    • Higher revenue per ad than non-targeted advertising

Ethical Issues in Behavioural Advertising

Key Concerns

  1. Consent:

    • Can people truly give informed consent?

  2. Privacy:

    • What if predictions made about individuals are unwanted or intrusive?

  3. Algorithmic Bias:

    • Issues surrounding inherent biases in algorithms used for targeting

  4. Exploiting Consumer Behaviour:

    • Concerns over strengthening patterns of manipulation

  5. Consumer Awareness:

    • Do consumers fully understand what they are consenting to?

  6. Accuracy of Inferences:

    • What are the implications if behavioral inferences about consumers are incorrect?

  7. Trust Issues:

    • How might behavioral advertising initiatives impact consumer trust?

Regulations Related to Personal Data Protection

GDPR: 8 Principles of Personal Data Protection

  1. Lawful Processing:

    • Data must be processed fairly and lawfully

  2. Purpose Limitation:

    • Data is only to be processed for specified, legitimate purposes

  3. Minimization:

    • Data collected must be adequate, relevant, and not excessive

  4. Accuracy:

    • Personal data must be accurate and kept up to date

  5. Storage Limitation:

    • Data not to be retained longer than necessary

  6. Rights of Data Subjects:

    • Data must be processed in accordance with the rights of the individual

  7. Security:

    • Data must be secured against unauthorized processing

  8. International Transfers:

    • Data must not be transferred to countries without adequate protection

GDPR Consensus Requirements

  • Consent is Mandatory:

    • Explicit opt-in consent is necessary for data processing

  • Third-Party Cookies:

    • Limits on the use of third-party cookies impact cross-site tracking practices

  • Legitimate Basis for Data Collection:

    • Requires a balance between business aims and consumer rights

Recent Legislation

Digital Markets, Competition and Consumers Act 2024

  • Aims to protect customers and regulate tech companies and platforms

  • Enhances the powers of the Competition and Markets Authority (CMA) to impose fines for regulatory breaches

  • Encourages transparency in advertising and pricing, aiming to tackle deceptive practices

Privacy and Electronic Communications Regulations (PECR)

  • Controls electronic marketing and cookie usage

  • Requires consent before storing or accessing personal information on devices

  • Imposes considerations for behavioural advertising practices

Consent Requirements (PECR and GDPR)

  • Consent Must Be:

    • Freely given

    • Informed

    • Specific

Case Studies & Examples

Digital Marketing Tensions

  1. Apple Privacy Changes (2021):

    • Impact of Apple's privacy changes on personalised advertising strategies

    • An estimated 62% of users opted out of tracking, affecting companies like Meta's revenue

    • Discussion Points:

      • Pros and cons of Apple's decision

      • Apple's gain in user goodwill and revenue opportunities

  2. Alpro Ad Analysis:

    • Banned due to claims being misleading despite some support for those claims

    • Issue: Lack of context and qualification in advertisements

  3. BrewDog Ad Review:

    • Banned for implied health claims in alcohol marketing, exemplifying regulations on nutritional claims

  4. Luno Ad Controversy:

    • Banned due to misleading claims in an unregulated industry

Regulatory Bodies and Standards

Advertising Standards Authority (ASA) (UK)

  • Function:

    • Independent authority that handles public complaints and promotes ethical advertising standards

  • Considerations for Ad Evaluation:

    • The medium used for the ad

    • Target audience

    • Type of product or service offered

    • Social norms regarding advertisement at the time of publication

Areas of Regulatory Concern

  • Comparative advertising practices

  • Pricing claims and accuracy

  • Trademark issues and passing off

  • Responsible product descriptions

  • Marketing tactics directed at children

  • Greenwashing claims and how they are substantiated

Ethical Tensions with Artificial Intelligence in Marketing

  • Concerns surrounding user privacy and autonomy

  • The relationship between human nature and technology

  • Issues of fairness and equal treatment in automated services

  • Accountability for data ownership and usage

Conclusion

Important Questions for Consideration

  • What negative consequences might arise from these trends and developments?

  • Who may be adversely affected by the shift towards more data-driven marketing?

  • How can the individual interests of various stakeholders be balanced?

  • Are there potential long-term negative effects even if current practices seem beneficial?

AMA Norms for Marketers

  1. Do No Harm

  2. Foster Trust

  3. Embrace Ethical Values

Key Takeaways & Questions

  • Continue examining the balance between privacy and personalization in digital marketing practices

  • Reflect on the role and importance of ethical theories in the context of digital advertising

  • Engage in discussions regarding the effectiveness and sufficiency of current advertising regulations