The Impact of Artificial Intelligence and Machine Learning Algorithms on Personalized Digital Marketing Campaigns and Consumer Purchase Intentions

Abstract

The convergence of the artificial intelligence (AI) into digital marketing has revolutionized how consumers interact with businesses in terms of personalization which includes customized advertisement, recommendation system and personalized email. The present paper considered the connection between personalization and consumer trust, as well as purchase intentions, and quantitatively analyzed the proposed relationship with the support of regression, SEM. The results indicated that recommendations and personalized advertisements were the strongest proponents of intentions to purchase the products and that consumer trust would be a key mediator variable that would intensify the overall role of personalization strategies. The SEM findings proved the model to be fit with good indices as it was proved that personalization has both a direct and an indirect influence on purchase intentions, and trust has a critical role to play in building long-term consumer engagement. On top of that although personalization has improved convenience and relevance there were concerns relating to privacy indicating that there is a balance that should be achieved between personalization and ethical use of data. The paper has concluded that when personalization is implemented in digital marketing, the technology precision should be accompanied by strong processes that are transparent and consumer-friendly to ensure trust in the practices. Recommendations stressed on use of privacy-aware techniques, cross channel integration and responsible use of AI. The further research directions are to consider the cross-cultural differences in personalization perceptions; longitudinal investigation of trust building and assessment, and the possibility to cater to the privacy concerns utilizing blockchain. The research will help gain better insights into the effects of the AI-based personalization strategy implementation on consumer behavior in the ever-changing online markets.