Digital Insights - 23 June 2023

Managing reputation in the age of AI: key insights from expert panel

• FGS Global hosted a panel discussion in London on managing reputation in the age of AI, highlighting the potential paradigm shift that AI could bring to various industries.

• To learn more about what was discussed, read our Insights piece following the event.

 The EU AI Act: The race to prevent human extinction

• On Wednesday 14 June 2023, the European Union announced new regulations for a safer use of AI by both providers and users in order to mitigate the risks posed by AI systems.

• In May 2023, several researchers and CEOs of major tech companies, such as DeepMind’s chief executive Demis Hassabis, addressed an open letter to the public outlining the potential risks of artificial intelligence. The joint statement, urging to make risk mitigation a global priority, warned of the dire threats of AI to human rights, health, as well as, alarmingly, to the survival of humanity altogether.

• The EU AI Act classifies risks according to different risk levels, ranging from “limited” to “unacceptable”, imposing severe fines and bans accordingly. These penalties will greatly impact technologies such as facial recognition, deepfake videos, and AI chatbots.

• MEPs aspire to reach an agreement with the Council regarding the final form of the EU AI Act by the end of 2023.

 Google and OpenAI limit AI chatbots in Hong Kong

• US tech companies have limited some of their offerings in Hong Kong as fears over how China’s influence will impact its ability to maintain an open internet have grown, according to media reports.

• Google and OpenAI have limited access to their AI chatbots in Hong Kong amid fears that expansion in the city could expose the companies to liability under a Chinese national security law that criminalizes criticism of the government. Disney has also chosen not to stream two episodes of "The Simpsons" that include references to critiques of the Chinese government on its streaming service in Hong Kong.

• Meanwhile, Apple has updated its privacy policy to warn users in Hong Kong of malicious links using a tool from China-based Tencent, which has temporarily blocked access to Western sites such as Mastodon, Coinbase and GitLab.

The Ogilvy campaign: Advertising agencies should disclose the use of AI-generated content

• Last week, agency Ogilvy encouraged advertisers and social media platforms to enforce brands to disclose the use of AI in their campaigns. Global head of influence at Ogilvy – Rahul Titus – proposed the AI Accountability Act under which brands will be required label their AI-generated content using hashtag #PoweredbyAI or a dedicated watermark.

• Titus’ idea is powered by the increasing presence of AI in marketing campaigns. The agency fears that AI may have the potential to threaten content authenticity and cause consumers to lose trust in influencer marketing.

• Earlier this week, Ogilvy mandated that its clients inform users of content that been generated by AI. Titus stressed that this is an effort to work with, rather than against, AI to establish an ethical and transparent framework in the industry. 

Bluesky: Twitter’s alternative by former CEO Jack Dorsey

• Originally a spin-out from Twitter in 2019, Bluesky Social – the decentralised Twitter alternative – launched its iOS app in February this year and its Android version in April.

• Although operating on a similar microblogging system to Twitter, the two platforms differ significantly. In addition to its decentralised model, which enhances data portability and increases the protection of user privacy, Dorsey emphasises how the app is stepping further away from traditional social media. During an initial Q&A session in 2020, he stated that the project intends “to build a durable and open protocol for public conversation”.

• Appearing at a fortuitous time following the series of controversial changes to Twitter after Elon Musk’s acquisition, Bluesky has received considerable attention despite its current invite-only status.

• The platform currently boasts more than 360,000 downloads on Apple’s App Store and over a million users on its waitlist - a move that has only heightened user excitement surrounding the much-coveted Twitter alternative.

Purpose-driven marketing faces backlash at Cannes Lions

• Last year's Cannes Lions festival celebrated purpose-driven marketing, with campaigns like EA Sports and the Kiyan Prince Foundation's "Long Live the Prince" winning awards. However, this year's event saw a shift in focus as brands including Bud Light and Miller Lite, facing backlash for being "woke."

• Cannes participants have been invited to reconsider the role of authenticity in purpose-driven messaging, with only a few panels discussing the topic. Greg Wolny, Chief Activation Officer at Code3, noted that people have stepped away from the conversation due to perceived hypocrisy.

• AB InBev, winner of the Creative Marketer of the Year award, recently faced criticism over its partnership with transgender influencer and activist Dylan Mulvaney. Global CMO Marcel Marcondes addressed the issue, stating that marketing professionals need to be humble and understand their consumers.

• Some industry experts believe that the backlash is a result of brands having a shallow commitment to causes and a lack of authenticity in their purpose-driven marketing efforts. Milton Correa, US Head of Creative, Brand and Advertising at Deloitte Digital, emphasized the importance of conscious and responsible marketing. 

Alibaba sees major leadership shake-up

• Alibaba Group has announced a surprise reshuffle of its leadership team. Joseph Tsai will serve as chair and Eddie Wu as CEO – replacing Daniel Zhang, who today holds both roles. The reassignment will take effect on September 10.

• The move comes as China’s biggest tech conglomerate is undergoing a fundamental reorganisation. In March 2023, it unveiled its "1+6+N" organizational structure, effectively breaking down its ecosystem into six independently run ‘start-up’ units.

• Nearly 70% of Alibaba’s revenue comes from its Taobao and Tmall marketplaces, although its cloud computing business is the fastest-growing unit with revenue reaching 20.2 billion yuan in Q4 2022. Zhang will still head the Cloud Intelligence Group, in charge of cloud computing and big data.

Reddit is less than a month away from putting a price on its application programming interface (API)

• In April, Reddit CEO Steve Huffman, in a move that resembles that of Twitter under the leadership of Elon Musk, announced that the company will restrict access by third parties to the site’s application programming interface (API) by the second half of 2023. Now the day is approaching and a concerning number of Reddit forums or subreddits are still on full blackout.

• Reddit’s decision means that it will be earning revenue from large companies such as OpenAI and Microsoft that were up to now using its data to train their AI services for free. While this seems rational, there are concerns that the company underestimated the backlash it would get from its moderators. Last week over 8,000 of Reddit’s ‘volunteer’ moderators blocked access to their forums initiating a blackout while a concerning number of them remain dark today.

• Huffman’s position has not been rattled. Last week the CEO said that the impact on revenue and advertisement campaigns has been minimal. As the protest drags on however, it could pose a serious threat to the site’s data quality and security in the long run.

 “Project S”: TikTok joins the online shopping industry

• TikTok has recently launched a new online shopping feature called Trendy Beat which offers users a selection of products that are currently trending on the video app.

• Until now, TikTok’s existing marketplace – TikTok Shop – allows vendors to sell their products online, through which the app makes a small commission. With Trendy Beat, however TikTok parent-company ByteDance based in Beijing would assume the production and selling of items and collect all the proceeds.

• ByteDance is currently valuated at $300bn. Last year it took over the Chinese market making $85bn in sales through its sister app – Douyin. Its ecommerce chief, Bob Kang has taken charge of the start-up’s expansion in the UK in an effort that has been named “Project S”.

• Operating through TikTok, “Project S” will take advantage of the app’s ability to predict consumer trends. If successful, ByteDance is expected to become the new competition for companies like Shein and Amazon.

 Meta Introduces 'Meta Verified': A New Way to Establish Your Presence on Instagram and Facebook

• Meta has launched a new subscription bundle called 'Meta Verified' to help users establish their presence on Instagram and Facebook. The service is currently only available for people aged 18 years and older in selected regions, including the United States, Canada, United Kingdom, Australia, New Zealand, India, and Brazil.

• The verification process includes providing a government-issued photo ID and, where available, a selfie video to confirm the user's identity before being approved for a Meta Verified subscription.

• Once approved, there is a monthly payment for the Meta Verified subscription starting at £9.99 for the UK subscribers.

• Meta Verified offers subscribers a verified account badge, proactive account protection, access to direct account support, exclusive stickers on stories and reels across Facebook and Instagram, where available, 100 stars a month on Facebook to show support for other creators, and more. The features may vary by region.