Investigating the Impact of Algorithmic Ad Personalization on Unplanned Buying through Customer Engagement

Abstract

This study explores how ad personalization based on algorithms affects unplanned purchasing behavior, with special focus on the mediating role of customer engagement in the Stimulus-OrganismResponse (S-O-R) model. As the artificial intelligence within the digital marketing sphere advances at a rapid pace, social media markets, including Facebook and Instagram, are increasingly employing algorithms to present users with personalized advertisements based on their behavioral patterns, demographics, and preferences. Although the studies conducted in the past have covered impulse purchasing and consumer engagement in isolation, there is scarcely any study evidence on how algorithmic personalization promotes spontaneous purchasing by actively engaging consumers. The quantitative, cross-sectional survey design was adopted with data being gathered on 370 active social media users that had been subjected to personalized advertisements. The models were tested using PLS-SEM and CB-SEM in SmartPLS 4.0 in order to verify the hypothesized relationships. The results indicate that customer engagement is greatly affected by algorithmic ad personalization ( 0.326, p < 0.01), and unplanned buying behavior is greatly predicted by customer engagement ( 0.504, p < 0.001). Nevertheless, the correlation between personalization and unplanned buying did not find any direct relationship, which validates that engagement completely mediates this relationship (indirect effect = 0.164, p < 0.01). The research also spreads the S-O-R conceptualization to AI-driven marketing settings and presents useful implications to marketers aiming to reconcile persuasive marketing with corporate responsibility. Future studies need to be longitudinal, investigate more of the mediators including trust and emotions, and diversify into different cultural and digital environments.