AI Algorithms and Their Influence on Consumer Trust in Social Media Advertising, Case Study of Pakistani Youth

Abstract

In recent years, algorithms have changed how businesses engage with customers through targeted advertising on social networks, particularly among the youth. This study examines the influence of personalized, targeted advertising aimed at consumers in regard to trust, a particularly relevant topic for young adults living in Pakistan. The study aims to discover if these data driven efforts are contributing to an increase or a decrease in trust in ads placed by or on social media. The researcher adopted a quantitative approach, with almost 400 respondents collected from major areas of Pakistan mainly universities students using stratified random sampling. Respondents are asked questions regarding their views on algorithm based, personalized advertising, their levels of trust, and their purchasing habits. The education levels ranged and included undergraduate and postgraduate students. Each level of education entailed some level of experience with social media advertising, although varied. The empty data is explored, using descriptive statistical tools pertaining to the overall implications of views on targeted advertising on social media and pie charts are used to display the results of analyzed data. The findings show that while 62% of respondents assessed personalized ads as more relevant to their personal interests, only 41% have total trust in content that is algorithmically driven. A significant proportion (37%) offered a neutral response, suggesting there was scrutiny of ethical dilemmas.  Likewise, 22% indicated little trust due to anxiety about privacy and data security. The study concludes that while algorithmic personalization helps make the ad relevant, it does not automatically elevate trust levels of a Pakistani youth consumer group. Transparency, ethical data management, and privacy protection, play an important role in trust. Marketers are encouraged to articulate clearly, explain, educate how data goes into the equation, and ethically promote product advertising, in order to earn long-term consumer trust.