TikTok to remove personalised algorithm in EU: Could it sully the name of targeted ads?

Europe has been on a roll as it clamps down on online data that is being shared with companies and how that data is used. Most recently, the EU, under its Digital Services Act (DSA), mandated that social media platforms will have to explain to users and researchers how their algorithms work for recommending content or products to users as well as to implement new safeguards for the protection of minors and limits on the use of sensitive personal data for targeted advertising.

In order to comply with the new requirements, TikTok users in Europe will soon be able to switch off the personalised algorithm that makes TikTok so successful and alluring to many users.

This means a user's For You and Live feeds will instead show popular videos from both the places where they live and around the world, rather than recommending content to them based on their personal interests, according to TikTok in a statement. 

Similarly, when using non-personalised search, users will see results made up of popular content from their region and in their preferred language. Their Following and Friends feeds will continue to show creators they follow, but in chronological order rather than based on the viewer's profile.

Don't miss: TikTok to be penalised for breaching the privacy of children in EU

Additionally, users in Europe aged 13 to 17 will also no longer see personalised advertising based on their activities on or off TikTok. "People already have control over the ads they can see, and they can toggle personalised ads on or off in their settings," said TikTok.

This will be a significant change considering that TikTok's algorithm is a key selling point for the app and contributes largely to why users keep coming back. 

TikTok's algorithm is one of the most sophisticated because it personalises the consumer journey from beginning to the end, according to Justian Edwin, the co-founder and strategic lead of creative agency Katch. 

"It has a content-driven awareness mechanism, powers the consideration phase via interest-based retargeting, and enables the final purchase on its own e-commerce platform," explained Edwin. "Apps with such superpowers provides a win-win solution both for brands and consumers without focusing on too many platforms, which makes promoting and shopping so seamless," he said.

Adding on, Tulus Ciptadi, co-founder and managing director of digital agency BSKSBT said that especially in terms of narrative, TikTok's algorithm comes out on top. "TikTok's algorithm allows its users to follow and understand trending news, issues, and products just by scrolling a few times," he said. "Every gesture, from watching videos, likes, comments, searching in the search bar, and others are calculated to produce content that has been personalised, making it easier for users to consume content that is indeed interesting to them," he said. 

This kind of personalised content though goes beyond delivering the right social media content to users. Rather, personalisation, or the utalisation of targeted ads, is key when it comes to be delivered the right ads and not being swamped by information that is irrelevant. 

This is a value exchange that Asian users benefits a lot from noting that privacy laws are not as stringent as the EU.

Asia's privacy laws 

Asia does not enforce regional privacy laws, according to Edwin. "Privacy laws will be dependent on each country’s willingness to ratify related treaties made at the regional level," he said. However, that does not mean that Asia has been left behind when it comes to privacy laws or that it is not making progress. 

According to Morrison & Foerster, a multinational law firm, a privacy sea change is taking place in Asia. It said in a report:

By the end of 2023, the region’s privacy laws are likely to grow by as much as 25% since 2021.

It also explained that in the past year alone, several key jurisdictions, including China, Thailand, Indonesia, and Sri Lanka, have either adopted or are in the process of implementing comprehensive privacy laws for the very first time. 

"At the same time, jurisdictions with mature privacy regimes, such as Australia, Japan, Korea, New Zealand, and Singapore, continue to amend their laws to align them more closely with European privacy rules," it said. 

Saying that, according to the firm, it is important to note that while these laws share core data privacy principles and obligations, the specific rules, particularly with respect to the permissible legal bases for processing and transferring personal information cross-border as well as the timeframes for notifying authorities and individuals about data breaches or responding to individual rights requests, vary widely.

"This lack of uniformity makes it difficult to generalise about the laws in this region, particularly as compared to those in Europe. It is important, therefore, to take these differences into account when developing global or regional privacy compliance programs," it said. 

The reason why Asia is lagging behind the EU in its privacy laws may be largely due to the significance level of why these laws need to be enforced, according to Edwin. "In the EU, privacy laws are created as a preventive act to limit further cases of privacy breaches. In Asia, it is rather more reactive towards unique cases in each country. For the time being, it’s more likely focusing on governing the clarity of users’ data usage due to repetitive data breach cases,” he said. 

Adding on, he said that unlike the EU, Asia is more diverse with quite a large gap, ranging from separate governments to different socio-economic and demographic conditions.

"Certainly, there will be some Asian countries that are more likely to follow what the EU is doing. Developed countries that are known to support privacy such as Japan, might do so," said Edwin with regards to if TikTok's new algorithm option might come into play in Asia. "As for countries such as Indonesia, I feel the government will not prioritise the same thing, because there are still many other things that are a main focus, such as the uneven distribution of internet users in this country, low internet speed rankings compared to other countries, and other fundamental problems faced by developing countries," he said. 

The value exchange of personalised ads

For now, Asian users benefit from the region's lag when it comes to privacy laws even if it might not be very obvious at first glance. For one, personalised ads help with moving the economy, according to Ciptadi. "Personalised or targeted are not only used by big multinational brands. They are now also being used by SMEs which are one of the main drivers of the economy for developing countries. Personalised or targeted ads help SME products to be 'found' by consumers," he said, adding:

With limited ad costs, SMEs can utilise personalised or targeted ads, especially for a more niche market based on region, or specific consumer categories.

Consumers will in turn feel helped by the existing suggestions and buying and selling will occur, which will certainly help economic movement, he explained. 

Additionally, too many ads, particularly ads that are scattered in terms of content, will make consumers feel overwhelmed, something personalised ads help to guard against. 

"Therefore, a middle ground needs to be found between ads that are not too general, but that also do not exceed privacy limits. This is where advanced algorithm technology and regulation from each country's government are needed, to decide the right middle ground for the people in their respective countries," Ciptadi said. 

Agreeing with him, Will Lee, managing director of That Marketing Guy said that from a marketing standpoint, he would prefer to know if his content reaches my intended audience, hence the necessity of targeted content. 

"From a user standpoint, when irrelevant content is shown, the user's stickiness and daily average use of the app may dwindle. Brands would have to recalibrate their advertising strategy and community engagement efforts," he explained when asked why targeted ads are so important. 

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