Artificial Intelligence in Digital Marketing: Impacts on Consumer Decision-Making and Privacy Concerns

Abstract

This paper describes how consumer decision-making will be revolutionized by the use of artificial intelligence in the future, as reflected in product recommendation systems, chatbots, dynamic advertising, and voice assistants on digital marketing channels. In this paper, findings are presented from a survey carried out among a sample size of 327 respondents addressing the effectiveness of CO in the consumer journey, the stage at which AI is most used in the consumer journey, emotional involvement, and perceived privacy. The findings indicate that artificial intelligence is most effective for supporting decision-making in the evaluation stage of the buying cycle (i.e., between the decision stage and the purchase stage). Crucially, personalization and continuous engagement are crucial to generate satisfaction and loyalty - recommendation centers were the biggest impact driver, while chatbots were seen more for enabling additional support, brand information retrieval, and interaction. As far as post-purchase consumer satisfaction, the voice assistants were either far too verbose, very directive, but there were flashy red flags and privacy accuracy concerns. In determining the research model, this study uses the Technology Acceptance Model and the theory of algorithmic trust, and combines them in the explanation of the working mechanism of the generative trust and emotional synchronism on the adoption mechanism of artificial intelligence in marketing. The take-home message of the study was that while AI undoubtedly improves educational efficiency from an operating perspective, personalization, and consumer engagement, its long-term contribution to the overall bottom line with respect to adoption will be due to transparency and a responsible perspective towards the consumer.