Investigating the Ethical Implications and Consumer Behaviour in AI-Powered Digital Marketing

PhD Candidate: Suada Peci

PhD supervisor : Prof. Dr. Arben Asllani

Research Fields

Ethical AI in Digital Marketing: Explore data privacy, transparency, and biases in AI driven marketing practices.

Customer Behaviour Analysis: Examines the influence of Artificial Intelligence on the customer trust, engagement and overall bevaiour.

Provide Ethical Guidelines: Provide recommendations to ensure ethical AI usage in digital marketing and to be applied by business and policymakers.

Context and general objectives 

The new era of digitalization has fundamentally transformed business operations by reducing the human error. Artificial Intelligence has shaped the way businesses communicate with consumers. As a strategic bridge, marketing strengthens the business-customer relationship by driving sales and building long-term relationships. AI-driven marketing has brought benefits to businesses through targeting, predictive analytics, content personalization, and automation. Consumers are facing significant amount of information that influences their purchasing behavior overall. The advancement of digital platforms gives businesses the opportunity to collect and analyze a large amount of data through AI tools providing future prediction. In addition to the opportunity that AI offers, it has concurrently raised critical concerns related to ethics, privacy, and transparency. [1]

Since Artificial Intelligence is “leading” the market, its effect has yielded visible results in several sectors such as education, finance, manufacturing, etc. Regarding the banking sector, an increase of up to 15% in customer satisfaction was observed, as well as a 20% increase in customer engagement. In retail and hospitality, improving the experience through personalized recommendations has increased customer satisfaction by up to 30%. In addition to the benefits, technological transformation has shown concerns about privacy. [2][3] According to research to date, 81% of consumers believe that their data is misused by companies, while 63% are concerned about privacy compromise and unauthorized access. Regarding transparency research, 60% of consumers are concerned about how retailers use their data. A significant number, 45%, have expressed their willingness to switch brands if privacy practices are unclear. Data transparency practices have increased customer trust by prioritizing ethical AI deployment. [4]

Indicators of changes based on the successful implementation of artificial intelligence are platforms such as Amazon, Netflix, other companies such as Spotify, Starbucks, Nike. By integrating AI into the processes of analyzing purchase history, interactivity with Chabot, personalized offers have brought changes in expected results. Increased consumer satisfaction, improved ROI, enhanced shopping experience, boosted sales, increased user engagement, improved targeted advertising. [5]

The expected outcomes:

1. The development of appropriate ethical framework for the responsible use of AI in digital marketing.

2. Evidence-based policy recommendations to address data governance, transparency, and consumer protection.

3. Enhanced understanding of how AI influences consumer behavior and decision-making in the digital economy.

Keywords: AI Ethics, Digital Marketing, Transparency, Data Privacy, Consumer Trust

Selected References:

[1] Floridi, L., et al. (2018). AI4People – An Ethical Framework for a Good AI Society: Opportunities, Risks, Principles, and Recommendations. Minds and Machines, 28(4), 689–707.

[2] Kiran, R. A., & Srivastava, A. (2023). A study of customer satisfaction in using banking services through Artificial Intelligence (AI) in India. Public Administration and Policy, 26(2), 113–127.

[3] Odetayo, M. O., Adeyeye, M. O., & Abdulraheem, A. (2019). The role of artificial intelligence on enhancing customer experience. International Review of Management and Marketing, 9(3), 1–8.

[4] Madakam, S., & Bhatt, A. (2024). Ethical AI in retail: Consumer privacy and fairness. arXiv preprint arXiv:2410.15369.

[5] Potwora, M., Vdovichena, O., Semchuk, D., Lipych, L., & Saienko, V. (2024). The use of artificial intelligence in marketing strategies: Automation, personalization, and forecasting. Journal of Management World, 2, 41–9