The news: Australia is turning its attention to another contentious social media feature—personalized algorithms—months after imposing a youth ban.
- Australia now plans to make social media firms include an opt-out feature for personalized algorithms.
- The change would allow users over 16 to bypass personalized recommendations to only see posts from accounts they follow.
- Companies that fail to enforce the legislation risk penalties up to 109.2 million Australian dollars ($70.4 million USD).
Why it matters: if enacted, the legislation could significantly reduce the ability to deliver relevant ads—though it is important to note that it is an optional setting rather than a default, so its impact on advertisers will ultimately depend on how many users choose to turn off personalized recommendations.
- Social media algorithms play a major role in surfacing product recommendations to users most likely to convert into customers. Should users choose to opt out, marketers lose a key source of targeting precision.
- Over one-third of US social media users trust product recommendations surfaced by platform algorithms to some degree, while 12.4% trust these recommendations completely, per EMARKETER and Viral Nation data.