The Impact of Data Privacy Awareness on AI-Powered Personalized Marketing and Consumer Behavior

This study investigates the impact of AI-powered personalization on consumer behavior, focusing on engagement, satisfaction, and purchase intention, while considering the mediating role of trust and the moderating influence of data privacy awareness. Drawing on a positivist, deductive approach, a cross-sectional survey was conducted among 388 consumers with experience using AI-driven personalization on digital platforms. The data were analyzed using Structural Equation Modeling (SEM) with SmartPLS 4.0. The results reveal that AI-powered personalization significantly enhances consumer engagement, satisfaction, and purchase intention. Trust, engagement, and satisfaction act as mediating mechanisms that strengthen the relationship between personalization and purchase outcomes. However, data privacy awareness was found to moderate these effects: consumers with higher privacy awareness demonstrated weaker satisfaction and purchase intentions in response to personalization, whereas those less concerned about privacy responded more positively. Interestingly, privacy awareness did not significantly moderate the relationship between personalization and engagement, suggesting that engagement may still occur even when privacy concerns are elevated. The study contributes theoretically by integrating data privacy awareness as a boundary condition in personalization research and empirically validating the role of trust, engagement, and satisfaction as key mediators. Practically, the findings highlight the need for organizations to design personalization strategies that are transparent, trustworthy, and adaptable to varying levels of consumer privacy awareness. Policy implications emphasize the importance of clear regulatory frameworks and responsible AI standards to balance personalization benefits with consumer data rights.