AI-Driven Personalization and Its Effect on Consumer Trust and Perceived Privacy Risk

Abstract

This research explores the important and amazing intricate relationship between AI-driven personalization, consumer trust, belief and perceived privacy risk in today’s digital marketing landscape. As brands nowadays has increasingly utilize the artificial intelligence and to basically offer very high personalized recommendations, suggestions advertisements, and complete user experiences, it’s very crucial to understand how consumers usually perceive and respond to these strategies as it comes. To investigate these aspects, the study used a quantitative approach for this research, by gathering the primary survey data from 210 participants aged 18 to 45, who actively engage with AI-based marketing.

The findings in this study indicate that AI-driven personalization has significantly boosts consumers’ feelings of relevance, beliefs convenience, and very importantly the usefulness of messages, suggesting typically that personalized content can definitely enhance brand engagement and problem-solving attitude. However, the results also show that increased personalization usually raises perceived privacy risks, mainly due to worries about data tracking, transparency and understanding of algorithms, and the potential misuse of personal information. Notably, the study highlights consumer simply trust as a vital mediating factor: while personalization can definitely and positively impact purchase intention, this effect usually systems diminishes when privacy concerns which are supposed to be personal erode the trust. On the other hand, it has been seen that brands that successfully establish, developed themselves and maintain trust—through absolute clear communication, complete ethical data practices, and responsible AI use—are definitely more likely to turn the benefits of personalization into stronger consumer loyalty and purchasing behavior.