Personalized advertising in the era of digital transformation: Algorithmic approaches and the transformation of consumer behavior

• Irine Ordenidze

In the era of digital transformation, personalized advertising has evolved from a marketing trend into a strategic business instrument. By integrating Big Data analytics, artificial intelligence (AI), and algorithmic modeling, businesses deliver targeted advertising that enhances engagement and return on investment (ROI). This study explores how algorithmic personalization mechanisms—such as programmatic advertising, recommendation systems, and dynamic creative optimization (DCO)—affect consumer behavior, brand loyalty, and marketing efficiency. A mixed-method research approach was employed, combining a survey of 300 Georgian consumers, in-depth interviews, and case studies of Amazon, Facebook (Meta), and Spotify. Results show that personalization increases click-through rates (CTR) by up to 89%, conversions by 28%, and ROI by 46%. However, it also raises ethical challenges related to privacy and transparency, highlighting the need for a responsible balance between personalization and trust.

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