ALGORITHMIC FOCUS: THE IMPACT OF AI-POWERED DIGITAL MARKETING ON CONSUMER INTERACTION AND BRAND LOYALTY

Abstract

Background: The explosion of the use of artificial intelligence (AI) in digital marketing has irrevocably altered how brands engage with customers. Personalization with the help of artificial intelligence and algorithmic attention might allow marketers to customize content or experiences for individuals, increasing consumer engagement and brand loyalty. However, few studies in this area have focused on the mechanisms of AI impacting such outcomes.

Objective: The goal of the research is to examine the impact of AI-based digital marketing on consumer engagement and brand loyalty - with a specific focus on algorithmic attention and personalized experiences. The studies aim to discover direct and mediated routes for enhancing the consumer-brand relationship in a digital domain.

Methodology A quantitative methodology was employed, employing a structured online survey with 500 consumers that had exposure to AI marketing tools in digital environments. Variables of interest were perceived personalization, algorithmic attention, consumer engagement, satisfaction and brand loyalty. Descriptive statistics, correlation analysis, multiple regression, and mediated moderation using structural equation model (SEM) were used to investigate the complex relationships among variables.

Results: Results show that algorithmic attention has a significant effect on brand loyalty, while perceived personalization and satisfaction have no direct effects. In addition, the mediation moderation effect test shows that satisfaction plays a partial mediating role between algorithm-attention and brand loyalty, and there is an interaction relationship between individual personalization perception and algorithm-attention for customers' loyalties. These findings demonstrate the many ways in which AI is driving and influencing consumer engagement and brand loyalty.

Conclusions: AI-led digital marketing in the forms of algorithmic attention has a momentous part to play on consumer engagement and loyalty. Marketers must weigh personalization against the ethics and privacy to ensure that brands can foster relationships over time.