Using AI in marketing carries risks related to data privacy, algorithmic bias, and compliance with Australian Consumer Law, particularly concerning misleading or deceptive conduct. These risks stem from how AI marketing platforms operate by analysing large datasets to predict consumer behaviour and automate content creation or targeting.
As of December 2025, many Australian SMEs utilise platforms like HubSpot, Salesforce Marketing Cloud, and increasingly, locally-developed tools such as Before You Go, which now includes AI-powered campaign suggestions. These platforms typically work by integrating with a business’s CRM and website data. AI algorithms then identify patterns – for example, predicting which customers are most likely to convert based on past purchase history and website activity. AI-driven content generation, a feature expanding rapidly in 2026, uses Large Language Models (LLMs) to create ad copy or social media posts. A key risk is that the data used to train these LLMs may contain biases, leading to discriminatory or unfair marketing outcomes. Furthermore, the Australian Competition and Consumer Commission (ACCC) is actively monitoring AI-generated content for potential breaches of truth in advertising regulations. Platforms are beginning to offer ‘explainability’ features, showing *why* an AI made a particular recommendation, but these are still developing. In 2027, updates to the Privacy Act are expected to further clarify data handling requirements for AI systems.
Ultimately, AI marketing systems function by automating decisions based on data analysis, and the risks arise from the potential for inaccuracies, biases, and non-compliance within that automated process.
