ADV20001-Advertising Issues: Regulation,

Ethics & Cultural Considerations

Assignment 1: Minor Essay

Lecturer: Mr. Anthony Le
Advertising Issues:
Regulation, Ethics and
Cultural Considerations

Student: Pham Huynh Thao Vy

Student ID: 104221834

Date of Submission: 16/2/2025

Word count: 1596 words (excluding references)

Introduction
Artificial Intelligence (AI) transforms the advertising and marketing industry, enhancing efficiency,
personalisation, and data-driven consumer engagement (Gonçalves et al., 2023; Haleem et al., 2022). AI-driven
tools such as ChatGPT automate content creation, predictive analytics refine audience targeting, and machine
learning optimises advertising spend and campaign performance (Pitt et al., 2021; Power, 2018). These
advancements enable brands to connect with consumers more efficiently and effectively, as seen in Harley-
Davidson's 2,930% increase in sales leads following AI integration (Power, 2018). However, while AI offers
substantial benefits, its adoption raises ethical concerns regarding privacy violations, algorithmic bias, and
consumer manipulation (Su et al., 2023). Cases such as the Facebook-Cambridge Analytica data scandal, where
AI-driven profiling was used to exploit consumer data, highlight the risks of unregulated AI in advertising.

This essay responds to the statement:

“Whilst AI may do away with human writing, it will benefit advertising marketing communications, facilitating
deeper engagement with consumers efficiently and more effectively”

While AI improves efficiency, scalability, and precision targeting, it cannot fully replace human creativity,
cultural nuance, and ethical judgment (McStay, 2018). AI-generated content often lacks the emotional depth
and authenticity necessary for compelling brand storytelling, which remains a uniquely human skill (Van Esch
& Stewart Black, 2021). Furthermore, concerns regarding AI-driven misinformation and deceptive marketing
practices have prompted regulatory scrutiny, such as Australia’s proposed reforms on AI-powered gambling ads
(ACMA, 2021).

This paper critically examines the dual impact of AI in advertising—its transformative benefits and ethical
dilemmas. First, it explores AI’s contributions to advertising efficiency, personalisation, and cost reduction.
Next, it addresses the ethical risks of AI adoption, including privacy exploitation, biased algorithms, and
consumer manipulation. Finally, it evaluates the role of ethical AI frameworks, regulatory compliance, and
human oversight in ensuring AI remains a tool for responsible innovation rather than exploitation. By balancing
technological progress with ethical responsibility, this essay argues that AI should complement, not replace,
human creativity in marketing.

THE BENEFITS OF AI IN ADVERTISING AND MARKETING

Artificial Intelligence (AI) has transformed advertising by streamlining operations, automating content creation,
and optimising marketing budgets (Gonçalves et al., 2023). AI-powered tools like ChatGPT enable marketers to
produce compelling ad copy, reducing turnaround times instantly and reliance on manual effort (Pitt et al.,
2021). Additionally, AI-driven predictive analytics refine audience segmentation, enabling businesses to
pinpoint high-value customer groups more accurately, thus improving engagement rates and conversion success
(Haleem et al., 2022). These capabilities significantly reduce marketing costs while enhancing return on
investment (ROI), a compelling advantage in an increasingly competitive digital landscape.

A prime example of AI's cost efficiency is Harley-Davidson's AI-powered marketing platform, which
autonomously adjusted ad placements and refined messaging based on real-time consumer data, leading to a
2,930% increase in qualified sales leads (Power, 2018). Similarly, brands leveraging AI-driven ad platforms,
such as Google Ads and Facebook's machine-learning algorithms, continuously analyse engagement patterns
and adjust bidding strategies in real time to maximise ad reach while minimising expenses. AI allocates
marketing budgets efficiently, reducing wasteful spending and enhancing ad targeting precision (Gonçalves et
al., 2023).

Beyond cost savings, AI significantly enhances personalisation in advertising, allowing brands to deliver hyper-
targeted content tailored to individual consumer preferences. AI-powered recommendation systems used by e-
commerce platforms analyse consumer browsing behaviour, purchase history, and engagement patterns,
ensuring that marketing messages resonate with the right audience at the right time (Haleem et al., 2022).
Additionally, AI-driven customer service tools like chatbots provide real-time support, product
recommendations, and seamless brand interactions, helping businesses scale consumer engagement without
increasing operational costs. For instance, Sephora's AI-powered chatbot has led to a 40% reduction in response
times and a 5–15% revenue increase, demonstrating AI's ability to enhance digital customer experiences (Patov,
2024).

However, over-reliance on AI in advertising presents notable challenges, particularly regarding the diminishing
role of human intuition, ethical oversight, and strategic creativity. While AI excels at data processing and
performance optimisation, it often prioritises cost-effectiveness over long-term brand positioning, emotional
resonance, and authentic consumer relationships (McStay, 2018). Brands that rely excessively on AI-generated
content risk losing their distinct brand voice, as AI lacks the cultural awareness, empathy, and nuanced
storytelling that human marketers bring to advertising strategies (Van Esch & Stewart Black, 2021).

Moreover, hyper-personalisation, if not managed ethically, can blur the line between relevance and intrusion.
While AI ensures that ads are highly tailored, excessive tracking of consumer behaviour raises concerns about
data privacy and algorithmic bias (Su et al., 2023). The Facebook-Cambridge Analytica scandal highlighted
how AI-powered advertising can be exploited for manipulative targeting, undermining consumer trust
(Magennis, 2024). Similarly, AI-driven gambling advertisements in Australia have been criticised for targeting
vulnerable individuals, prompting regulatory scrutiny (ACMA, 2021). These concerns reinforce the necessity of
human oversight and responsible AI governance in digital marketing.

Thus, while AI optimises efficiency and enhances targeting capabilities, brands must balance automation and
authenticity. AI should be seen not as a replacement for human creativity but as a tool to enhance marketing
innovation while maintaining ethical and consumer-centric advertising practices.

The Limitations of AI in Creativity and Consumer Trust

Despite AI's ability to streamline advertising processes and improve efficiency, it remains fundamentally
limited in replicating human creativity, emotional intelligence, and cultural awareness, which is crucial for
impactful marketing. Unlike human marketers, AI lacks an intuitive understanding of emotions, societal trends,
and shifting cultural contexts, making it incapable of crafting original, emotionally resonant brand narratives
(Van Esch & Stewart Black, 2021). AI models rely on pattern recognition and historical data, which allows
them to replicate existing trends but prevents them from generating genuinely innovative or disruptive
campaigns. Coca-Cola's "Share a Coke" campaign is a clear example of marketing success driven by human
creativity rather than AI automation. The campaign connected with consumers on a deeply personal level by
leveraging identity and social interaction, an approach that AI, limited by its data-driven framework, would
struggle to conceptualise and execute. While AI can generate content through sentiment analysis and
engagement metrics, it lacks the human instinct needed to evoke nostalgia, humour, and emotional storytelling
in ways that genuinely connect with consumers (McStay, 2018). Brands that become overly reliant on AI-
generated content risk losing their distinct identity, resulting in marketing that feels generic, predictable, and
detached from the emotional depth that drives consumer loyalty.
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Beyond creativity limitations, AI-driven advertising raises significant ethical concerns, particularly in consumer
manipulation, data privacy, and algorithmic bias. The Facebook-Cambridge Analytica scandal is a stark
example of how AI-powered profiling can be exploited for manipulative targeting, ultimately eroding trust in
AI-driven marketing (Magennis, 2024). The scandal revealed how personal data from millions of users was
harvested without consent and used for political micro-targeting, exposing the risks of unchecked AI in
advertising. Similarly, AI's ability to hyper-personalise advertisements has raised concerns about predatory
marketing, particularly in industries where consumer vulnerabilities can be exploited. A 2021 report by the
Australian Communications and Media Authority (ACMA) found that AI-driven gambling advertisements
disproportionately targeted individuals with gambling addiction, directly contributing to higher problem
gambling rates (ACMA, 2021). AI algorithms, designed to maximise engagement and conversion rates, often
fail to consider the ethical implications of their targeting practices. This has led to proposed regulatory reforms
to restrict AI-driven gambling ad targeting and ensure greater accountability in digital marketing. Without
stricter oversight, AI-driven advertising risks prioritising engagement and profitability at the expense of
consumer well-being.

Another significant issue is AI's potential to reinforce bias in advertising. Since machine-learning algorithms are
trained on historical data, they inevitably reflect and amplify existing biases, which can result in discriminatory
marketing practices (Van Esch & Stewart Black, 2021). AI-driven recruitment advertising, for example, has
been found to disproportionately show high-paying executive job listings to men rather than women, reflecting
the gender biases embedded in past hiring patterns. Similarly, AI-powered financial services have been shown
to exclude certain demographic groups from receiving credit and loan offers, reinforcing existing
socioeconomic disparities. These examples demonstrate that AI could unintentionally deepen digital inequalities
without human oversight, making fairness and inclusivity secondary to algorithmic efficiency.

While AI is undoubtedly a powerful tool for improving advertising efficiency, it should not be seen as a
substitute for human creativity, ethical judgment, or strategic oversight. Brands that rely solely on AI-driven
automation risk losing authenticity, consumer trust, and the ethical integrity that underpins responsible
advertising. The challenge is not whether AI should be used in marketing, but rather how it can be integrated
responsibly to enhance innovation without compromising fairness, transparency, or consumer rights. Businesses
must ensure that AI implementation remains transparent, ethical, and consumer-centric, with clear regulatory
frameworks to protect against misuse. Human oversight is essential to preserving authenticity, preventing bias,
and ensuring AI is an enabler rather than replacing strategic, emotionally resonant marketing. By balancing
technological advancement with ethical responsibility, companies can harness AI's full potential while
maintaining the human-centric values that make advertising genuinely effective.

CONCLUSION
In conclusion, AI has transformed advertising by enhancing efficiency, personalisation, and cost-effectiveness,
yet its rapid adoption has introduced pressing ethical concerns. Privacy violations, consumer manipulation,
algorithmic bias, and threats to human creativity demand urgent attention. While AI optimises marketing
strategies and engagement, unchecked deployment risks eroding consumer trust and deepening digital
inequalities.

To ensure AI drives innovation rather than exploitation, businesses and policymakers must adopt ethical AI
governance, enforce transparency, and encourage AI-human collaboration. Upholding fairness, accountability,
and compliance with data protection laws is essential to protecting consumer rights and ensuring responsible AI
use.
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Future research should focus on bias detection, data privacy, and misinformation control to integrate AI
ethically into marketing. By balancing technological progress with ethical responsibility, the advertising
industry can maximise AI's benefits while securing long-term trust and sustainability.

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 References

ACMA. (2021). Australian Communications and Media Authority. Acma.gov.au.

https://www.acma.gov.au/publications/2023-10/report/gambling-advertising-australia-placement-and-
spending#case-study

Gonçalves, A. R., Pinto, D. C., Rita, P., & Pires, T. (2023). Artificial Intelligence and Its Ethical Implications
for Marketing. Emerging Science Journal, 7(2), 313–327. https://doi.org/10.28991/esj-2023-07-02-01

Haleem, A., Javaid, M., Qadri, M. A., Singh, R. P., & Suman, R. (2022). Artificial Intelligence (AI)
Applications for marketing: a literature-based Study. International Journal of Intelligent Networks, 3(3),
119–132. sciencedirect. https://doi.org/10.1016/j.ijin.2022.08.005

Magennis, M. (2024, December 17). Australian Facebook users score $50 million settlement with Meta over
Cambridge Analytica data harvesting scandal. 7NEWS. https://7news.com.au/news/australian-
facebook-users-score-50-million-settlement-with-meta-over-cambridge-analytica-data-harvesting-
scandal--c-17110162

McStay, A. (2018). Emotional AI: The Rise of Empathic Media. Emotional AI: The Rise of Empathic Media.
https://doi.org/10.4135/9781526451293

Patov, A. (2024, September 4). How Sephora Enhances Customer Experience (CX) Through Personalization
and Digital Innovation. Renascence.io. https://www.renascence.io/journal/how-sephora-enhances-
customer-experience-cx-through-personalization-and-digital-innovation

Pitt, C., Paschen, J., Kietzmann, J., Pitt, L. F., & Pala, E. (2021). Artificial Intelligence, Marketing, and the
History of Technology: Kranzberg’s Laws as a Conceptual Lens. Australasian Marketing Journal,
31(1), 183933492110441. https://doi.org/10.1177/18393349211044175

Power, B. (2018, July 24). How Harley-Davidson Used Artificial Intelligence to Increase New York Sales
Leads by 2,930%. Harvard Business Review. https://hbr.org/2017/05/how-harley-davidson-used-
predictive-analytics-to-increase-new-york-sales-leads-by-2930

Su, Y., Emma Junhong Wang, & Berthon, P. (2023). Ethical Marketing AI?A Structured Literature Review of
the Ethical Challenges Posed by Artificial Intelligence in the Domains of Marketing and Consumer
Behavior. Proceedings of the ... Annual Hawaii International Conference on System Sciences.
https://doi.org/10.24251/hicss.2023.603

Van Esch, P., & Stewart Black, J. (2021). Artificial Intelligence (AI): Revolutionizing Digital Marketing.
Australasian Marketing Journal, 29(3), 199–203. https://doi.org/10.1177/18393349211037684

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